Taking up his post with the rest of the new government of the Maldives in November 2018, Uz. Fayyaz Ismail explains his plans to make the country a transparent and investor-friendly destination, where the administration is ready to partner with new ventures and is developing legal safeguards to protect foreign direct investment (FDI). The minister is also targeting development of the Maldives’ port infrastructure to boost trade and facilitate new areas of business activity, as well as a diversification of the economy for the benefit of local people
What are the ministry’s key priorities for the rest of 2019 and during your current mandate?
We have come into government recently, and we are facing huge challenges in terms of the economic and social fabric of the country. My task is to try to revive the economy; not that it is in a terrible state, but we do need to provide more credibility and certainty to investors, something which has been lacking over the past five-to-seven years. One very important aspect is to create a more business-friendly environment. We are trying to bring back credibility in the tax system, which was also lost over recent years. Our main message to investors is that we are here to help them, and we want them to grow. Another important area we are concentrating on is the development of SMEs, which are the backbone of the country’s economy. We are creating a lot of initiatives in this area, such as a specific SME bank to provide finance and also to provide government funds, so that we can partner with SMEs and give them the necessary know-how and assistance. On the other hand, we are also looking for big investments, and the mainstay of our economy is the tourism sector. We will continue to concentrate on this sector as I believe we have a very long way to go before we reach our full potential. The completion of the new airport, which is scheduled for the end of 2021, will allow us to double capacity and create a more convincing environment for arriving guests. It is also important to diversify the industry so that everyone benefits. A lot of islands have been leased out but, due to a lack of finance and the problems of the past 10-12 years, with the international financial crisis and some political instability, the developers who have taken on the risk have faced difficulties. We want to offer a government partnership with these developers by bringing in foreign investors and funds, to ensure that they end up reaching the market. We have tripled the budget for tourism promotion, so we will need these extra beds to cater for increased demand.
What areas are you looking at in order to progress in diversifying the Maldivian economy to reduce the reliance on tourism?
A lot of diversification programmes are being worked on. Fishing is another mainstay; it does not have as huge an impact as it used to in terms of revenue, but it still has a huge impact on the lives of our people. So, we are looking at different ways to maximise revenues from the growth of the fisheries industry by investing in different products and methods, as well as seeking greater value addition. Agriculture is an area in which we believe we have huge potential, especially looking towards the Middle East. Some of our fresh produce, such as mangos and papayas, have a truly unique taste, so we believe that we can develop a niche market in the Middle East and some European countries as well. We are also trying to look at bigger investments, such as the possibility of transhipment hubs in the Maldives. A lot of the sea traffic between the Far East and the rest of the world commutes through this area, so there is potential for bunkering and providing services for vessels, as well as transferring cargo. Two main shipping channels pass through our islands at a 1.5-degree line of latitude and an eight-degree line of latitude, respectively – giving us a highly strategic location.
Could you outline the government’s new ‘Blue Economy’ vision?
We are known for our stance on the environment, and it is also common knowledge that any change in global climactic conditions will affect us directly due to rising sea levels. Our former president, Mohamed Nasheed, set our position out very clearly in talking about the impact of global warming on smaller nations. Now, one of the main priorities set out by President Ibrahim Mohamed Solih is that any method of production should take the environment into account. This does not mean that we are not going to take on new development projects, just that they must adhere to sound environmental principles. The vision is to grow sustainably, protect the ocean and utilise the resources we have in a respectful way.
Tourism accounts for 70 percent of the Maldivian economy. What current and planned tourism projects and investment opportunities would you like to highlight?
The president has set a target of increasing beds by 35,000 during his five-year term. This will be spread all across the Maldives, so that means more islands are to be developed as resorts, in addition to the development of more city hotels and guesthouses. The guesthouse has become a thriving business and directly benefits local people. These are all areas in which we will welcome foreign investment, and we have already seen involvement from the Middle East in general, and the UAE in particular. We have a project to bring the 100 or so islands that have been stalled for various reasons out onto the market, so there is a huge area for investors to come in and partner with the government or even in private ventures over the next two or three years.
The UAE is the largest source of Maldives’ imports. How can bilateral trade be increased and what benefits will this bring each country?
The second state visit made by our president was to the UAE, and we believe that we have a very special relationship with the Emirates and Saudi Arabia. Whilst the UAE is one of our main trading partners, we are currently facing difficulties in our port, and this is creating difficulties in terms of the scheduling of shipments, time taken to clear loads, and so on. Another mega-project we are starting this year is to relocate the operations of Malé Commercial Harbour to a nearby industrial island. Once we have achieved that, we will have a port that can easily turn around large ships, allowing us to increase trade with the UAE and other countries. Over time, we have built up a good relationship with traders in Dubai and the UAE in general, and we know that there are many synergies between us in terms of investments and the tourism sector. The UAE also has a very important project up and running in terms of its food security, which can help us develop our fisheries and agriculture sectors. These are both niche products that I think offer huge potential for us to diversify our trading relationship with the UAE.
A new Joint Cooperation Committee is to be formed between the UAE and the Maldives. Which economic sectors do you foresee being the potential beneficiaries of this?
Again, the key is to facilitate trade and investment between the two countries. This kind of high-level committee can iron out any issues that exist so that our businesspeople can get on with doing business.
What is your final message to readers of Gulf News?
We are beginning a totally new era in the Maldives. We welcome business, and I can promise that the way we work will be totally transparent, doing our utmost to ensure that foreign investors have secure investments. We are changing the law to protect such investment and prevent any arbitrary action from the government. We have huge opportunities; Middle East investors have the resources. We have the avenues through which to come and invest, which will be of benefit to our country and also to them. So, I say: welcome to the Maldives!