Named as minister of finance in the Maldives’ new government in November 2018, Ibrahim Ameer is a former US Fulbright Scholar and holds a Master’s degree in economics from the University of Nebraska Omaha. Ameer talks to Gulf News about his determination to create a more dynamic economy in the Maldives, focusing on measures such as decentralising investment and curating a new spirit of openness and transparency for investors, as well as opening up new sectors besides the key mainstay of tourism
What are the Finance Ministry’s key priorities for 2019?
One of our focus areas is to reform how state-owned enterprises are run to ensure that the corruption we observed in the past cannot continue. It is important that people have trust in our tendering process. Another area is transparency, and we have already started publishing all fiscal data as well as creating a stronger legal framework to give confidence to foreign investors, so they know that the Maldives is a safe place for them to invest. Our main priority this year is to reform the tax system in the Maldives and introduce personal income tax, which is a manifesto policy.
What is your analysis of the country’s current macroeconomic situation and what sectors do you think offer the most significant opportunities for growth?
In 2018, the Maldives economy grew by around 7.7%. In 2019, we project that growth will remain stable at 5.6%, which is high compared to other countries around the world at the moment. Tourism is the main driver of economic growth. We have 20 new resorts opening this year, and we have tripled our marketing budget from $3 million to $10 million, so we expect the number of arrivals to rise as we attract more tourists from markets we have not previously reached. Construction is expected to be the second biggest contributor to growth, with the development of new resorts and as our social housing investments begin. Going forward, I think the Maldives economy will grow beyond our forecasts. The number of tourists arriving at present, which stands at 1.3 million per year, is limited by the airport facility itself, and the new terminal that is currently being developed will allow for up to 3 million tourists per year. Also, economic growth has so far been centred around Malé, but we are proposing the expansion of another three or four urban centres around the country, which will ensure more inclusive growth.
What can you tell us about the new government’s strategy to improve the business environment and attract investors from the UAE?
We want to improve the business environment by making it more open and transparent. Over recent years, the past government carried out contracting processes in secret, and this has led to many allegations of corruption. We want to make this process more transparent, and make it easier for companies to come to the Maldives. We want FDI to increase and those investors to pay their taxes here. We have a zero-tolerance policy on corruption, and I think this is something that investors are looking for. When you look at the tourism sector, the payback period of a resort investment is no more than seven or eight years, so that is one of the most lucrative areas for investors. With regard to construction, we have 20,000 housing units we want to construct. We are going to invest in our hospitals and new urban centres, which will have their own education, health and commercial facilities. All of this provides opportunities for international investors to come in and do business. The potential is there; Maldives is open for business.
In 2016, the Maldives Center for Islamic Finance was launched as a fully government-owned company. What are your thoughts on the role of Islamic finance in the Maldives, and how Gulf nations could collaborate in this regard?
The Maldives can develop and become a regional hub for Islamic finance. We already have one Islamic bank, and the national bank has invested heavily in developing this area. I think it would be a positive step, and something that could bring in funds from Gulf countries, especially the UAE, to help with development. Some countries, such as Malaysia, are strong in this area, but others in the region are not focusing on Islamic finance development at all, so I think this is an opportunity for us. In fact, part of the plan for Hulhumalé island is to cater for an Islamic finance hub there. There is definitely potential, and we are already working with the Asian Development Bank and Maldives Islamic Bank to develop the sukuk market, because the use of Islamic securities and instruments is still very limited in the Maldives.
Looking ahead to the work of the new Joint Cooperation Committee to be formed between the UAE and the Maldives, why should Emirati investors choose the Maldives over other countries in the region?
Because of the great potential here. And because looking beyond the tourism sector, we need investment to develop our construction, health and education sectors. On top of that, we are introducing legal reforms to make it easier for business to come and set up here, as well as mechanisms to give inward investors tax breaks to help make sure that they can come and make a profit before they start paying taxes. We present a lot of untapped opportunities; there is raw potential here.
What is the current state of the bilateral trade relationship between the Maldives and UAE, and how do you see this relationship developing?
Between January and November 2018, the UAE accounted for 23.1% of our total imports, which is the highest share by any country. The total amount of imports from the UAE predicted for 2019 stands at $266 million, and that would be an increase of 27% on 2017. So, our close relationship is expected to continue, allowing us to explore ways to increase trade. We have shared proposals under which we would like to see more UAE investment in different areas. One key moment will be when we move Malé’s commercial port to Thilafushi. This will allow us to work on improving Malé’s connectivity as transport capacity will be freed up. Again, besides tourism, we also have many other sectors in which to invest. I know that UAE investment delegations have shown great interest in investing in our agricultural sector, so we are expecting to see progress on that front.
Do you have a final message for readers of Gulf News?
The Maldives has changed. The Maldivian people have achieved what seemed impossible because they have turned away from an autocratic government to make way for a democratic one, which is bringing in new and transparent ways of doing things that will give foreign investors more security. We are also bringing in new reforms so that investors can come here safe, with the knowledge that their investments will be secure – and not only in the tourism sector: we are also seeking investment from the UAE and other Gulf countries in construction and our agriculture and fisheries sectors. Gulf countries can be our partners in developing the Maldives. Until now, that development has always been centred on Malé, but this new government wants to see development spread throughout the country. Without a close partnership with countries from the Gulf, it will be so much more difficult for us because they are the best suited for the role. The Maldives has traditionally given very good returns on investments, and I am sure that we will continue to offer excellent returns in the future.