2023 Budget, Plastic Tax, Urban Tourism

Friday, December 2

The first ‘SmartCom Fair’ organised by the Housing Development Corporation kicked off at the Central Park in Hulhumalé, featuring stalls by banking, internet and telecom service providers as well as presentations on digital technology and business.

Friday, December 2

Thursday, December 1

A ban on the import of shampoo, conditioner and shower gel in plastic bottles smaller than 200ml came into force.

The government plans to phase out the production and sale of single-use plastics by 2023. 

Last month, customs incinerated 80 cartons of plastic cutleries that were confiscated at the Kulhudhuffushi port.

Thursday, December 1

GDP grew by 31.2% in the second quarter of 2022 compared to the corresponding quarter of 2021, exceeding the pre-pandemic performance in Q2-2019 by 11.5%.

The growth was “mainly driven by the robust performance of the tourism sector and spill-over effects on related sectors” such as trade, transportation, communication, health and social work, the central bank observed in its latest monthly economic update.

“However, a negative contribution was observed for the public administration sector during the quarter,” it added.

Reflecting elevated oil and global commodity prices, expenditure on imports is expected to increase from US$2.4 billion in 2021 to US$3.2 billion in 2022. 

Despite “negative global headwinds” such as higher interest rates to curb inflation, continuing supply chain disruptions, and the impact of the war in Ukraine, the Maldivian economy is “estimated to grow by 12.3% in 2022 and reach pre-pandemic levels of output by the end of 2022, according to the central bank’s third quarter review.

Wednesday, November 30

The annual rate of inflation stood at 2.94% in October, down from 3.1% in September. In monthly terms, the Consumer Price Index fell by -0.7% in October after a rise of 0.16% in September.

Significant declines were recorded for rent, meat, fruits and vegetables. But the annual inflation rate for food and beverages remained high at 5.94%.

“The most significant price increase in this month were from security equipment and materials for the maintenance and repair of the dwelling (+0.39%), hairdressing salons and personal grooming establishments (+6.99%), milk, other dairy products and eggs (+0.33%), shoes and other footwear (+2.22%) and fish (+2.01%),” according to the statistics bureau.  

Citing “sustained inflationary pressures originating from higher global commodity prices” as well as a goods and service tax hike due to take effect in January coupled with “the transition to a more targeted fuel and electricity subsidy policy,” the central bank predicted that the domestic inflation rate will “accelerate significantly to 5.4% in 2023.”

Wednesday, November 30

The Housing Development Corporation unveiled an integrated tourism island project dubbed ‘Urban Isle,’ inviting investors to build luxury villas, serviced apartments and midscale hotels in Hulhumalé.

“The island welcomes every type of traveler, from international and domestic visitors, to budget travelers and those seeking an extravagant stay,” the HDC explained. “The properties are positioned to offer short-term stays for transit purposes, as well as long-term stays for residents and digital nomads.”

The fisheries ministry relaxed rules on employing foreign workers on fishing vessels. Regulations that restricted expatriates to cooking, cleaning and security jobs on boats were amended to allow foreign employees to work as fishers. Based on size, fishing boats can employ between four to eight foreign workers.

An estimated 17,000 people work in about 750 licensed fishing vessels.

Tuesday, November 29

Companies that made the ‘Gold List’ of top businesses in the country – an annual ranking published by Corporate Maldives – were honoured at the “Gold 100 Gala” ceremony at the Crossroads resort, “an invitation-only networking event that brings top executives from the business sector together and supports individuals looking for new business initiatives.”

Tuesday, November 29

Monday, November 28

An MVR2 (US$0.1) levy on plastic shopping bags will be introduced by the new waste management bill passed by parliament. Four months after the bill is signed into law, businesses must charge customers for plastic bags sold or provided at the point of sale. The levy must be included in the receipt and submitted to the tax authority. Fines of up to MVR50,000 (US$3,240) could be imposed for violations. 

Duty-free shops, wholesalers and waste management service providers will be exempt. Bin-liners and plastic bags used to sell fresh fish as well as unpacked rice, flour and sugar can also be provided without the extra charge. 

The new environmental tax is part of the government’s policy to phase-out the production, import and sale of single-use plastics. 

Monday, November 28

Parliament approvedbudget of MVR42.8 billion (US$2.7 billion) for 2023. A supplementary budget for spending an additional MVR5.8 billion this year was also passed.

The budget review committee increased the 2023 budget proposed by the finance ministry by MVR160 million. The additional funds were earmarked for the public sector investment programme.

With the presidential election due to take place in late 2023, MVR8.4 billion was allocated for infrastructure projects, including 1,211 ongoing projects, 790 projects in the tendering and pre-tender stages, and more than 200 new projects. Notable projects include the Thilamalé overwater bridge, Malé port relocation, regional airports, and land reclamation in Gulhifalhu and Addu. 

Recurrent expenditure – subsidies, wages and administrative costs – account for 70% of the budget. Some MVR493 million was earmarked to increase the salary and allowances of workers in the health sector.

Total government spending of MVR40.6 billion was projected to exceed estimated revenue and grants of MVR32.1 billion. The government plans to plug the fiscal deficit with the sale of treasury bills in the domestic market and “blue” or “green” bonds in the international capital market.

Sunday, November 27

The Housing Development Corporation published a list of applicants for the Vinares flats built in Hulhumalé. 

Of 1,413 applications, 690 failed to meet the eligibility criteria, the HDC’s managing director told the press. The main criterion is being either a native resident of Malé or a resident who has lived in the capital for 15 years.

After a means-testing process, the final list will be published in February. Successful applicants are expected to be able to move into their apartments by April.

Some 1,344 flats were built in ten 13-storey towers under the US$163 million project. The price of the three-bedroom Vinares apartments reportedly range from MVR2.5 million (US$162,100) to MVR2.7 million. 

Sunday, November 27