The Maldives consists of a cluster of about 1190 low lying coral islands covering a land area of about 298 square kilometers. Our population is roughly 300,000 people dispersed over 196 inhabited administrative islands and 90 resort islands.

Our main source of government revenue is from tourism (about 35.5% of central government revenue). Tourism and its related activities contributed to about 1/3rd of our GDP, making it the single most important industry in the country.

Although tourism is the major driving force behind our development, Maldivians who directly benefit from tourism are very limited. Majority of the profit generated through tourism goes to the affluent few, mostly resorts or tourism related businesses. For this reason, in April 2006, government of Maldives created a public limited corporation, the Maldives Tourism Development Corporation (MTDC) with the mission to “deliver more benefits (of the Tourism Industry) to its shareholders and enabling greater and direct ownership of tourism resources by the public”.

MTDC is the largest company in the country’s tourism industry with licenses to develop a number of new tourist resorts. The company’s 45 percent shares are owned by the state and 55 percent by the public. It is currently the biggest public holding company in the Maldives.

MTDC is expected to improve the lives of thousands, by providing a major opportunity for the poorer Maldivians to benefit from the profit generated by the company’s ventures. In spite of the foreseeable enormous benefits to the society, MTDC, since its very existence, has been a target of numerous criticisms by the public, its shareholders, experts in the field, members of parliament, political opposition and interest groups etc.

Such criticisms are broadly on two grounds:

  • As a huge mass of the population is uneducated regarding the process and implications of owning shares, the people who reap the benefit of the privatization are only a limited number of well informed business groups and the like.
  • Due to the lack of participation by the shareholders in the decision making processes and the influence of the government and powerful figures in the tourism field, lack of transparency and accountability, there is much room for manipulation and corruption within the company.

Looking at the former, it seems like the cat is now out of the bag. Yesterday, the Auditor General has sent a report to the Parliament, requesting immediate cessation of MTDC share trading as well as termination of the company itself. The report says that about 32% of the total shares of the company are controlled by 2 companies only. Out of which Villa (a Maldivian conglomerate which controls a huge section of the Maldivian private sector) owns 27% and Champa (another rich company with significant market share in the travel industry) owns 5%.

Now there was a rule from the very beginning that no one Maldivian can hold more than 100 shares (at face value of Mrf. 100.00). It is unfortunate that almost one third of a public company’s shares were bought and controlled by the same company, while authorities were clueless as to what was going on. Criticism and finger-pointing in the media was not enough to bring the culprits down, and I think it is time to take firm action to protect the interest of the very people this company was supposed to help in the first place. If not, Maldives will keep prospering from the outside and the rich will get even richer, while the country’s poor and gets shoved deeper into poverty.

Related posts:

  1. How tourism can help the poor in the Maldives
  2. Maldives, a paradise in trouble.
  3. Tax Reforms in the Maldives?
  4. Cheap Travel Packages to Maldives
  5. How Maldives can climb out of its fiscal dark hole