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Asian Development Bank in Maldives: Ignoring the Realities
Asian Development Bank (ADB) loans to Maldives have often been superficially successful, returning short-term profit and status to the bank and the Gayyoom dictatorship, but the crucial failure by the ADB to enforce proper governance procedures in Maldives, and account for the real cost of the Gayyoom administration, undermines the integrity of ADB reports and their evaluations of the bank's operations. The ADB reports also show a surprising ignorance of the powerful Maldives democratic movement. This damages the relevance of the bank's country strategy and program reports for any potential long-term investor in the country. Gayyoom already has an extensive propaganda apparatus, and has employed the international public relations firm Hill and Knowlton to promote his dictatorship. Hill and Knowlton were well paid for their efforts, but the Asian Development Bank are telling lies for Gayyoom and lending him money for the privilege. NSS minister is ADB governor in Maldives The Asian Development Bank Governor for Maldives is Ismail Shafeeu, according to the ADB web site. Shafeeu is also the Maldives Minister of Defence and directly responsible for the operations of the National Security Service (NSS), Gayyoom's unconstitutional private militia which keeps the dictator in power despite his widespread unpopularity.
The ADB and Maldives power company STELCO The Asian Development Bank has done only two thorough evaluations of their Maldives loans, both published five years ago in 2000. One of these loans financed an increased power supply for Male' during the 1990s, initially raising the government power company STELCO's operating revenues by over 20% a year. The STELCO evaluation report in 2000 identified serious problems in the Gayyoom administration, especially its lack of financial transparency. The evaluation said there were 'weaknesses in institutional-strengthening achievements relating to STELCO’s accounting and operational management systems, which are without a shared commitment from [Gayyoom's government] to ensure they are made effective; and failure to fully follow through on commitments relating to electricity tariff adjustments with variations in fuel costs'. Despite these important reservations, the ADB rated the project's sustainability as 'Likely'. Events in the Maldives parliament this month show that the Asian Development Bank should have heeded its own warnings. The STELCO company, which was given such a generous boost by the ADB loan for new generators in the 1990s, was crippled by the chairmanship of Yameen Abdulla, Gayyoom's younger brother. When Yameen Abdulla left the chairmanship, STELCO's money went with him. This month, October 2005, Gayyoom's finance minister has been asking the parliament to approve an emergency budget grant of US$7.82 million to make up the STELCO cash shortfall that followed Yameen's departure. Why and how this profitable company has been robbed by the Gayyoom clan and then re-cashed with state funds, is a question the ADB should be asking in its reports and adding to its evaluation of the long-term benefits and sustainability of its 'successful' projects. STELCO and other institutions like the Bank of Maldives now have publicly traded shares, but in practice the shares are only sold and traded within the narrow circle of Gayyoom's family and associates. This is a serious governance and corruption issue that many Maldivians complain about. The ADB is yet to recognise the problem. The ADB's STELCO project 2000 evaluation report did not mention important facts about the effects of the project in the outer atolls. The report acknowledged the failure of its target to 'develop a scheme to encourage private sector participation in development of outer island electrification'. However, the project had achieved one apparent success - the completion of a tariff study to adjust Male' and outer island tariffs in 1996. The increase in tariffs, prompted by the project study and an eager Gayyoom regime, caused an uprising in Fua Mulak and protests in Addu atoll that lead to occupation of these atolls by large numbers of the National Security Service officers and the staging of fully armed military exercises in the streets of populated islands in Addu in early 1996. This writer was an eye-witness to these events in Maradhoo island on Addu atoll. The NSS also used explosive devices in populated areas. Fua Mulak people were arrested and imprisoned for years without trial after the uprising, but the ADB's 2000 evaluation said nothing about any of these outcomes of the tariff increases in the southern atolls. Despite evidence that Gayyoom was deliberately restricting development in the outer atolls and profiteering from the bank's projects, the ADB reports for 2002-2004 praised Gayyoom, saying he 'had guided the modernisation of the country. A new constitution was promulgated in 1999, strengthening the democratic process. A well-functioning formal and informal set of checks and balances serves to ensure public integrity and effective governance.' The Asian Development Bank's deception continued in its 'Country Strategy and Program Update (2004-2006)' published in August 2003. Under the section 'Recent Political and Social Developments', the report said: 'There have been no significant developments in the political scene since the last country strategy and program update, except for a small cabinet reshuffling in October 2002. Presidential elections are scheduled for November 2003; they have been held in an orderly and peaceful manner in the past.' Asian Development Bank ignores abuses and political unrest in Maldives The ADB 'update' ignored important political events and increasing media exposure of the Gayyoom regime during 2001-2003, for example, the heated debates in the parliament about allowing ministers to be questioned, and demands for the establishment of political parties. The report was silent on the close Gayyoom circle of family and old friends who occupied all the powerful ministries. The bank failed to mention the role of the NSS as torturers for Gayyoom, and the bogus charges that led to the popular parliament member Mohamed Nasheed (now chairman of the Maldivian Democratic Party) being imprisoned, tried without legal representation and then exiled away from his family and stripped of his seat. The ADB was silent on the case of businessman and writer Ibrahim Luthfee, found guilty of treason after refusing to allow his home to become Gayyoom's personal editorial office for the president's newspaper Miadhu, suffering years of bogus court cases, imprisonment and torture, and then having the courage to write about it in an emailed newsletter. Luthfee escaped from Gayyoom's illegal custody in Sri Lanka in 2003 and was granted political refugee status by the UNHCR. Luthfee had written in detail about his grievances in 1999 and sent letters to Gayyoom, his ministers and all the members of the Majlis. In a cowardly display, almost every man and woman in the legislature, from Gayyoom down, ignored those letters. So did the Asian Development Bank. And it ignored the mounting complaints from human rights and international media organisations about the jailing of Luthfee's fellow writers. It took murders and mass shootings at Maafushi jail in September 2003 and riots in the capital against Gayyoom and the NSS, to force the Asian Development Bank to acknowledge in August 2004 that 'political and social stability' in Maldives had become 'relative' after 'civil protests in the capital.' However, the bank was relieved to report that Gayyoom promised his administration would change the judiciary, the executive, and the powers of the parliament over the next 5 years to improve public-sector efficiency and good governance.' There was now a Human Rights Commission, and the bank was pleased that Gayyoom had 'invited wide public participation in the process of the proposed constitution reform' and 'a special majlis had been established to process the proposed reforms.' Why should the bank believe Gayyoom's promises? He has been saying the same thing for 27 years while he controlled the country with torture and arbitrary decrees, and plundered the treasury for himself and his family. Why believe him now when he promises reform? Gayyoom refuses to strengthen public accounting system For over three years, Gayyoom has obstructed the ADB's project to 'Strengthen the Public Accounting System'. This project, initiated in 2001, is described as 'a major component of ADB's assistance in the financial sector development program' in Maldives. The ADB claims the project 'will be the foundation for ADB’s other expenditure and revenue-related support to the Maldives to develop a social security system, diversify revenue sources, and manage domestic and foreign public debt.' Gayyoom's refusal to allow the required legislation through the parliament means the project was delayed indefinitely and evaluated at 100% risk of failure. Curiously, the ADB did not class Gayyoom's refusal as a 'Problem', using the excuse that the technical criteria for inclusion in the 'Problem' category had not been met. The ADB has not costed the losses incurred by Maldives by non-compliance with its project to strengthen the public accounting system. Losses such as the resulting high financial administration costs of projects for the people of Maldives, and the lost business from international investors. Due to the delays caused by Gayyoom and the incompetence he has deliberately cultivated among his senior officials, the real losses to Maldives from his neglect of this ADB project alone are at least hundreds of millions of dollars, probably billions. ADB ignores the democratic movement in Maldives The most glaring omission from the ADB's Country Strategy and Program Maldives reports is the failure to describe the formation of the Maldivian Democratic party (MDP) in 2003 and the party's intensive lobbying of foreign governments to help end the Gayyoom dictatorship. The MDP is now the biggest party in Maldives, it has active members throughout the atolls and its meetings in the capital regularly attract crowds of between 5-10,000 people. In a fair election, the MDP would easily win government. Already, MDP members of the parliament are making a vocal and effective contribution to decisions and debates, and the leader of the MDP is more than likely to be the next president of Maldives. The ADB seems to consider this information of no interest to the readers of its reports. The Asian Development Bank has not attempted costings of the effect of a democratic and non-corrupt Maldives government in its country strategy and project programs The ADB claims its projects are about progress and change and the alleviation of poverty, but in partnership with Gayyoom this can never be achieved in a sustainable way. The dictator's vision is too narrow and he has personal limitations that have crippled his administration. Apart from his brutal violence, Gayyoom has a major weakness as a leader - he cannot take advice and will not accept ideas unless he pronounces them himself. Gayyoom is most comfortable when surrounded by pedantic and greedy fools. The chief justice, Mohamed Rasheed Ibrahim, Gayyoom's presidential staff, and new foreign minister are disturbing examples of the calibre of Gayyoom's closest administrative associates. His officials know that to keep their jobs, they must wait for Gayyoom to tell them what to do. Thinking and offering advice or plans is a dangerous and foolhardy exercise that can leave an official unemployed and in jail. Praising the dictator and following his orders without question, is the way to promotion and wealth. In such an environment, the ADB loans and efforts have no meaning apart from promoting the dictator and enriching his family and favoured followers. Maldives weakened by bank's partnership with Gayyoom The result of the ADB partnership with Gayyoom is a weak, depressed country with a tiny overcrowded hub of business and bureaucracy in the capital Male'. A country where the native population is malnourished, while only kilometres away, rich foreign tourists stuff themselves with the best of food. A country that can repair US$100 million dollars of damage to its palatial tourist resorts within three months of a devastating tsunami, but where over 11,000 islanders are still homeless and begging for help while Gayyoom and his entourage tour the world in first class comfort pleading poverty to his foreign bankers and donors. The Asian Development Bank has no costing of Gayyoom's personal resorts, luxury goods, foreign property and investment holdings, his family's travel and other personal expenditures, all taken from state funds and bribes associated with government contracts and permits. The ADB does not evaluate the real cost of the vast expenditures on Gayyoom's private NSS militia and on the President's Office. The ADB is ignoring the financial effect of the absolute control that the NSS and the President's Office exerts over the rest of the administration, the people and economy of Maldives. |
Maldives Culture is an independent internet magazine of Maldive cultural issues.
Editors and translators: Michael O'Shea and Fareesha Abdulla, Australia
We invite contributions from Maldivians and others interested in Maldives.
Contributions and comments - mc_editors@hotmail.com
