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India and China agree to cooperate in non-USD payment option for Maldives’ imports

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The governments of both India and China have agreed to cooperate in efforts to allow Maldives to pay for imports in the countries’ currencies, instead of US dollars, according to Maldives’ Economic Minister Mohamed Saeed.

The remark comes after Saeed told a gathering in April that Maldives will soon have the option to settle their import payments using the Chinese currency, the Renminbi (RMB), which is mainly used for domestic transactions within mainland China.

In an interview to PSM on Wednesday, Saeed said he received a letter from China’s Commerce Ministry, two days back, in which Beijing provided assurance it will cooperate in allowing the option to settle import payments in the local Chinese currency, as requested by President Dr. Mohamed Muizzu.

Saeed added that he met with the Indian High Commissioner Munu Mahawar two weeks back, and that he said the New Delhi would support and cooperate in arranging for the settlement of import payments in Indian Rupee.

According to Saeed, Maldives imports between USD 600-700 million in commodities from both India and China, each year.

“Therefore, we import around USD 1.4 billion to USD 1.5 billion in commodities annually, from both markets combined,” he said.

“We are negotiating with both sides to make arrangements for us so that, for example, for imports from China, the shipping company can bring the invoice and the payment can be settled by converting Maldivian Rufiyaa to their local currency through the banks, instead of US dollar.”

Saeed said it will save up to 50 percent from the annual USD 1.5 million in imports from the two countries.

“If we can arrange up to USD 300 million from each country, that means USD 700 million,” he said.

“This means we can eliminate the reliance on US dollars by that amount in the future. That will reduce the demand for dollars. And the future demand for dollars will continue to fall.”

Saeed said that challenges persist, with foreign countries still skeptical about Maldives, which he said was due to the poor state of finances the former administration left the country in.

But he said it was slowly improving.

Saeed had previously said the Maldivian Rufiyaa was expected to strengthen against US dollar by 30-40 percent within the coming months.

The new Maldivian administration has said that the country’s economic situation was “alarming”, but that the government was implementing strong fiscal reforms to rectify the issue, including stopping printing money.

President Muizzu has previously said that the reforms have begun to produce results, with the value of the Maldivian Rufiyaa holding strong, and the dollar exchange rate dropping.

Source(s): sun.mv

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Over 2,000 beds expected to be brought to market in 2024

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Minister of Tourism Ibrahim Faisal has revealed that an additional 2,700 tourist beds are expected to be added to the Maldives’ tourism sector this year. He made the statement during an exclusive interview with PSM News.

Speaking to PSM News, Minister Faisal highlighted the government’s efforts to attract investors to the islands of the Maldives. He said that investor forums are being planned in various countries, with the first forum anticipated to take place in July or August. He also said that the initiative will be spearheaded by the Ministry of Tourism, the Maldives Marketing and Public Relations Corporation (MMPRC), and the Maldives Integrated Tourism Development Corporation (MITDC).

Additionally, Minister Faisal revealed plans for another investor forum in Thailand, with additional forums in other countries being considered. He stressed the importance of creating special arrangements to expand tourism into new areas and attract investors by reducing acquisition costs and offering other incentives.

Furthermore, Minister Faisal highlighted that 15 to 12 new resorts are expected to open this year. Based on current statistics, he said that it is estimated that 2,700 new beds will be operational by the end of the year.

The government is making efforts to expand tourism across different parts of the country, particularly in areas where tourism is currently absent. As part of the initiative, 19 islands across nine atolls have been opened for tourism development. Currently, the Maldives boasts 62,300 tourism beds, which includes 42,955 beds from 174 resorts, 14,461 beds from 860 guesthouses, and 1,198 beds from various tourist facilities.

Source(s): PsmNews

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Trade deficit widens, fish exports drop 41 percent

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The merchandize trade deficit widened from USD 669.3 million in the first quarter of 2023 to USD 768.5 million in the first quarter in 2024; reflecting stronger import and decline in exports.

However, compared to the final quarter last year, merchandize trade deficit in Q1-2024 registered a decline of 6%.

According to the Maldives Monetary Authority (MMA)’s Quarterly Economic Bulletin released on Tuesday, total merchandize exports – comprising of domestic exports and re-exports – register an annual decline of 5 percent in the first quarter this year, reaching a total of USD 131.3 million.

MMA reports that the fall in total merchandize exports was caused due to the steep decline in domestic exports – which has been observing decreases over the last two consecutive quarters as well.

Domestic exports – mainly comrpise of fish and fish products – plunged 41% in Q1-2024, registering a total of USD 31.5 million.

Central bank adds this decline was due to the staggering decline in the export earnings from frozen skipjack tuna, which observed a 64 percent drop – by USD 19.9 million – following declines over the last two consecutive quarters.

Moreover, this decline also in export earnings reflected both the 57 percent decline in the volume of such exports, and the 21 percent drop in skipjack tuna prices in the Bangkok frozen market during Q1-2024.

During the review quarter, frozen skipjack tuna in Bangkok market was priced at an average of USD 1.4 per kilogram – a decline from USD 1.8 per kilogram recorded in the corresponding quarter last year.

Besides this, declines were observed in the export earnings from fresh or chilled yellowfin tuna for the third consecutive quarter.

In the review quarter, export earnings from this commodity dropped by 57 percent (by USD 3.3 million) with the volume of such exports dropping by 55 percent, indicating a decline in unit prices.

Canned and pouched tuna exports saw the opposite trajectory, increasing by 5 percent during the review quarter despite a decline in the volume of such exports.

In tandem with these developments, volume and earnings from frozen yellowfin tuna exports increased, registering an 18 percent growth, a surge by USD 0.6 million), in the review quarter.

The fall in domestic exports was partially offset by the significant rise in merchandize re-exports during the first quarter this year.

In Q1-2024, merchandize re-exports rose by 18 percent, registering a total of USD 99.8 million reflecting the significant growth in jet fuel re-export – which had registered a 17 percent increment.

On the other hand, total merchandize imports observed an annual growth of 12 percent in the review quarter, registering a total of USD 899.8 million.

Major import categories saw modest growths, but was partly offset by a considerable decline in import expenditure on construction-related items; which dropped 9 percent during the Q1-2024.

Among the major import categories thar recorded growths during Q1-2024, the largest increase was observed for import expenditure on petroleum products, which rose by 25 percent – a surge by USD 41.9 million – mainly mirroring the spike in diesel imports, which recorded a susbtantial 27 percent jump (USD 34.8 million) in the review quarter.

Food items saw a growth of 14 percent (USD 23.9 million), while mechinery and mechanical appliances imports saw a 40 percent (USD 23.0 million) growth.

Import expenditure on electrical and electronic machinery and equipment registered a 43 percent growth (USD 19.0 million) during the first quarter.

Despite significant fisheries activities – from the country’s second largest economic sector – the relatively lower revenue receipts from the sector is an industry-wide concern, especially among the fishers who stand to receive the most significant brunt from adverse impacts.

Fishers’ woes do not end here as many face plight of long overdue payments owed to them by processed-fish manufacturers and canneries operating in the Maldives.

Source(s): sun.mv

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GoAir ordered to pay USD 3.6 million to MIRA

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The Civil Court has ordered India’s GoAir to pay $3.6 million to the Maldives Inland Revenue Authority (MIRA) within a month.

The verdict was passed on June 03rd.

MIRA, in its lawsuit against GoAir, sought to claim USD 3,580,588 in outstanding airport service charge, departure tax, and airport development fee in accordance to the Air Taxes and Fees Act.

The Civil Court in its order, demanded the now bankrupt carrier to settle the amount within one month from the date of the verdict.

As per the Civil Court order, GoAir is liable to pay outstanding departure tax from October 28, 2018 up to its last operational date, and airport development fee from April 2022 to March 2023.

According to the Air Taxes and Fees Act, and its supporting regulations the following charges are levied as departure tax;

$30 per foreign passenger in economy class, $12 per local passenger

$60 per passenger in business class

$90 per passenger in first class

$120 per passenger in private jets

Airport development fee:

$25 per foreign passenger in economy class, $12 per local passenger

$60 per passenger in business class

$90 per passenger in first class

$120 per passenger in private jets

Besides failing to appear in court for trial despite chargesheet and multiple summoning issued to GoAir’s local address, the carrier did not file any defence motion as well. The Civil Court issued the order in absentia of the airline.

GoAir operated scheduled flights to Maldives before the Covid-19 pandemic in 2020, and resumed operations later the same year before it announced a cease of operations in March 2023.

Source(s): sun.mv

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