HIGHLIGHTS OF THE REPORT ON MTDC & ITS IMPLICATIONS

Everyone may not find it interesting or useful to read the whole report on MTDC published by the Auditor General’s office. So I thought it’s good to try to highlight the important points of the report and discuss its implications.

• MTDC’s capital structure was designed in a way that government would contribute 45% of the share capital while the remaining 55% was for the general public. However government currently controls 57% of the company’s share capital. Like in the case of other public limited companies in Maldives, government is not yet ready to surrender their majority stake in MTDC. It seems that government doesn’t really appreciate the importance of fully privatised public limited companies for the development and smooth running of a stock market in our country.

• Without the usual procedure of bidding, government has awarded 10 islands to the company at a very low rate of rent and additional islands are expected to be offered. This can be a kind of indirect subsidy which gives an unfair benefit to the shareholders of the company. This is against the spirit of a free and competitive market. However this is justified as long as the company is owned by a diverse base of shareholders from the general public and the benefits and the profitability of the company flows to a large proportion of the population. As the report revealed this is not what’s happening in the company. The company is largely controlled by a bunch of business tycoons like Villa Group and Champa who has already made huge investments in tourism sector and exploits millions of dollars as profit every year. Instead of ordinary people these rich people are exploiting the benefits of the tax cuts and other concessions to the company at the expense of the income flows for the government budget. So it’s the poor who loose eventually and the rich gets richer.

• Shareholders from the general public had to pay the full amount of the share price but the government deferred a part of the payment under a special arrangement. This discrimination is a clear violation of the regulations and common principles of running a public limited company. This shows the government’s disregard for the common law principles.

• As observed by the auditor there is no full time managing director or CEO in this company which is completely unacceptable for a public limited company of that size. Without a full time managing director such a company can’t be properly managed and we can see mismanagement in various areas of the company. The board of directors and the government who controls the majority stake in the company should be responsible for this.

• The company has decided to distribute a surprisingly large amount as the first year’s dividend while the net profit and reserves were too low to support for such a lavish distribution. From a business point of view, a company in its early stages of development and growth should reinvest a relatively large proportion of their profit. So making such a lavish distribution, especially when the profit was so low and deplete its reserves is completely against sound business policies and ethics. Perhaps the government and few business tycoons who control the company were badly in the need of urgent liquidity for which MTDC was the perfect source. This can be further argued as the report suggests that government demanded some extra payments in advance from the company which were not obligatory under any agreement.

• Report has identified some unrealistic forecasts in the initial share prospectus issued by the company, which should never have been allowed to happen or the regulator should take proper actions against those who are responsible for this.

• Management has violated the rights of the shareholders by failing to act responsibly and by failing to observe the principles of good governance. For example; materials were purchased and contracts were awarded without a competitive bidding process. Some large payments or transactions made by the company were not supported by proper documents or evidence. Managers of a public company are acting as the agents of shareholders so their primary concern should be to maximize the wealth of shareholders and to protect the interests of the shareholders. It’s very clear that the management of the company has failed in this task so far.

Based on these factors, I think it is right to say that the company has failed to fulfill the very objectives for which it was created. The company is no longer run to provide the opportunity to the general public for investing in tourism sector and to share in the profits. With their many resorts those rich resort owners are not yet satisfied to leave the ordinary folks to share even a loa laari in the profits generated from the tourism sector. Otherwise they would not have sabotaged the attempts to create a public company which could open the opportunity for ordinary households to involve in the tourism sector investments. May be they enjoy keeping us in the need to go to them, basically for everything in our life. People, it’s up to us to decide whether they really mean it when they say they are committed to bring the “change we need” if elected as the president. What I know is, it’s not the change I need when they deprive us of every opportunity to become self sufficient.

SIGNS OF REAL CHANGE AT LAST

I was delighted when I saw the news about the Auditor General’s report on MTDC. It’s not because I enjoyed the alleged fraud and corruption in the company, but because I saw an important institution carrying out its responsibilities independently and courageously published the report on their website showing transparency in their work. I thought, at last the calls and chaos for change and reform during the last 4 or 5 years are starting to be paid off. We have seen an institution using its newly gained independent powers to fulfill its very purpose.

At the same time, it’s with great regret that I condemn the role of government and some business tycoons in ruining the hope of many ordinary people to share in the benefits and the flow of profits from the tourism business. MTDC was the government’s promise for ordinary Maldivians that we would get a fair chance to pool our small individual funds in a tourism sector investment. In fact the initial share prospectus issued by the company stated this aim very clearly. However the company has ceased to fulfill this very purpose as revealed by the Auditor General’s report.

Independent institutions and commissions created under the constitution have an important responsibility of making government institutions accountable and ensuring that they act in the best interests of the citizens of the country. So it’s happy to see an institution carrying out this task, but still there is a lot to change and we have a lot learn. We are entering a new era where we have powers and rights which most of us never knew about its existence before. It’s up to us, for each individual to understand these rights and use it for good.

The choice of running mates and it's impact

Despite the earlier predictions, Maumoon got first in choosing a running mate. He managed to appoint Thasmeen as his running mate without creating further divisions in his party. This can be seen as a political success for the incumbent president and the presidential candidate of the DRP, Mr. Maumoon Abdul Gayoom.

One of the major objectives of having a running mate is to overcome the weaknesses in the candidate and attract additional support which would not be gained if the candidate runs alone. Even though we don’t have reliable statistics or polls to suggest that Maumoon gained more popularity by choosing Thasmeen as the running mate, one thing is certain. That is he managed to avoid further divisions in DRP and hence kept his support base strong. The matter of Thasmeen overcoming any weakness on the part of Maumoon can be a question of debate. In my view Thasmeen brings a much more clean political history (no strong allegations of corruption) than many of the Maumoon’s old guards into the presidential bid.

The decision of choosing a running mate was not easy for other candidates. We had seen many delays in announcing the running mate from Qasim and Anni. However Qasim, Hassan and Anni managed to make the announcement during this week.

I think Qasim’s choice was rather surprising for many of us. His running mate Dr. Ahmed Ali Sawad is completely new for the Maldivian political sphere. It seems that one of the major weaknesses of Qasim that Republicans wanted to overcome was Qasim’s lack of formal tertiary education. So they were desperate to find a person with a PhD for Qasim’s running mate, and indeed Dr. Sawad’s PhD will be an added strength to Qasim’s presidential bid. Another objective of the Republican Party was seemed to be choosing a running mate who belongs to Addu thereby to gain more votes from the southern atolls, but I really doubt how much support a man who lived in overseas for more than 16 years will be able to gain even in the atoll he belongs to, let alone the whole country. Moreover in today’s political environment of Maldives, an active political history or involvement either in the government or in the reform process is vital for a person seeking to compete in the upcoming elections. Without this active political history, I think it’s right to say that Dr. Sawad does not bring any additional political credibility to the presidential bid of Qasim. In my opinion just having a PhD is not enough to make one the perfect running mate and a PhD doesn’t have to be a requirement for the post either.

Then came the announcement of Dr. Hassan’s running mate. His choices might have been very limited to find a person who shares the same views and ideologies with him and is ready to be a running mate. Dr. Hassan might not have wanted to take any chance by choosing someone who can’t be completely trusted upon. This could be a major reason why he ended up in choosing Dr. Shaheed, his colleague and faithful friend as his running mate. However it doesn’t stop me wondering how much this decision helps him to expand his voter base.

The media has long before tagged Hassan, Shaheed and Jameel as the “New Maldives” trio. They share similar political views. So it doesn’t make a difference for me whether it’s Shaheed who is the presidential candidate and Hassan is his running mate or vice a versa. For me any combination within those 3 will produce the same result. It’s not Hassan’s presidential bid, but it’s the trio’s presidential bid. Anyone who supports Shaheed would support Hassan too in my opinion. So my point is Hassan should choose some one out of the trio if he wants to attract more support and to strengthen his presidential bid.

Finally Anni has made a decision too, after postponing the announcement many times. His choice of Dr. Waheed may make them a good combination for some of us. Anni being a popular MDP activist can really use some help from Dr. Waheed’s political wisdom. However Dr. Waheed does not enjoy anymore the kind of support he used to get from the public before. It seems that voters will demand an explanation about his departure from the reform process twice and about his future plans before putting faith in him again. If Dr. Waheed succeeds in this task, the combination of Anni and Waheed will surely be a tough one to beat.

CHANGE DOES NOT COME BY ITSELF

The term “change” is perhaps one of the most familiar terms for Maldivians these days. We hear about changing the political system in our country, changing the president, changing economic and social policies etc. These calls for change from all over the country have put our country in the middle of a political chaos. It’s for this reason I wanted to question myself, what these changes mean to me? What does it mean to anybody?

I yearn for change because I want a better life, a better future. I don’t want to stand to live the same life lived by my parents. I don’t want to live a life where I have to depend on others, basically for everything in life. Unfortunately this is the reality of our day-to-day lives. So this has to be changed. We can’t just sit there and blame the fate. Someone needs to do something about this.

This is the point where we have to accept the inevitable truth. Change does not come by itself. Our conditions will not change unless we change it ourselves. We can’t just leave it to somebody or just to a presidential candidate. The process of change should start with us. It’s us, who needs to change first. We need to change the way we think, the way we approach things and the way we react to things. We should learn to be independent. We should learn to open our minds. We should learn to respect others views. We should reconsider our priorities.

As youths, do we have any goals in our lives? It’s not only Americans who can have a dream. We can have our Maldivian Dream too, a dream of a nation where life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. We should believe that anybody can grow up to be who they want. Higher posts and designations are not for only those who has money or for those who has royal blood in their veins.

It’s not politicians who should have dreams for us. It’s not them who should decide our priorities. We ordinary Maldivians should have our own dream. It’s the dream which we have that matters. Politicians and presidential candidates are supposed to have plans to fulfill our dreams, not plans to fulfill their own dreams. We need a president to lead us. It’s our responsibility to back him up. It’s our responsibility to continuously strive for change, and hence for a better future.