thoughts on the Maldivian Economy, post 2023 presidential election
This article was originally published on 8th September 2023 at ft.lk
Maldivians are voting to select the next President tomorrow, Saturday, 9th September. With the election tightly contested- much tighter than in recent past, what do the tea leaves foretell?
The landscape
While the campaign has definitely been boisterous and indeed high spirited to say it modestly, the voices of the different campaigns are all monotonous- all about who dare to offer the biggest bag of freebies to the populace. It is a race to occupy the extreme far-left of a spectrum, where the center is only a theoretical construct, much like the famed neutrino- it’s been proven to exist, but damn difficult to detect.
Bridges, hospitals, international airports and ready-to-occupy housing units on land yet to be reclaimed, are all being materialized out of thin air. Long-term leases on all social housing units, traffic violations stretching 5 years and more are all disappearing from existence with such ease, that David Copperfield himself would writhe with envy.
While readers’ here in Sri Lanka are fully cognizant of the torturous process of debt restructuring, even after the country had literally run out of options, Maldivian candidates and their acolytes make the term ‘restructure’ sound casual- an evening stroll after crumpet and tea. The option of re-finance, which will only kick the proverbial rock further down the road and result in only increased debt, is another term that is being nonchalantly flung around.
The experience of my brethren in Sri Lanka have clearly demonstrated that re-structure or re-finance of national debt, does not come easy or quickly. As a pre-requisite, that it will surely require creditors to believe that the state is finally serious about fiscal discipline. However, to the regret of all, our politicians are acting like sailors on shore leave.
The momentous existing debt was clearly known and was already a matter of urgent concern. However, more worrying is the additional debt and loss of revenue that will surely arise out of the campaign pledges, yet to be quantified, whoever wins the election.
Whither the Maldivian Economy?
Therefore, on the eve of the election, what does the chicken entrails presage?
After stubborn persistence as a commentator and student of the Maldivian economy for 2 decades, I opt to believe that the future is not all doom and gloom.
Let me try and rationalize what I hasten to admit, is a rather instinctive thought.
- Firstly, I refuse to believe that our local politicians are that irresponsible or indeed naive. All the major parties, contain within their ranks, educated and experienced professionals who can not only decipher the augury, but are also capable to decisively act to change course.
The repeated and stern cautions of World Bank, IMF and others are known and, I believe, have been heard. The road chart for prudent action is drawn, and readily available.
After the sound and fury- I believe, without much evidence I agree, that the elected government will come down to earth, face reality and act responsibly.
2. Secondly our tourism industry; the primary mover of our economy, have emerged stronger and more robust than before.
The Maldivian model of, largely private family holidays, instead of crowded beaches, are globally more preferred today, as a result of the scare of the Covid 19 lockdowns.
The guest house industry, now thriving in all atolls, is allowing middle income travelers to enjoy a Maldivian holiday with a more modest budget. This has widened the doors and made our tourism product more accessible to a larger spectrum of the global travel industry.
3. Our citizens today are more aware of the realities of ‘No Free Lunch’. The young, the mature and the elderly have been active on social media, cafes and coffee houses, questioning the irresponsibility of the campaign pledges. Journalists and editors too, are presently being vocal on the issue.
Confirmation bias notwithstanding, I believe that the candidates too are indeed aware of the economic reality. But that, they are, presently forced to play a game of one-upmanship with the populace.
4. The trials and tribulations of our neighbors; our close friends here in Sri Lanka, are not too far, in time or in geographical distance. The pain and the injury are still evident and not fully abated, yet.
The 600 plus miles that separate our 2 nations, does not separate our people. Many of us, live, learn and enjoy life here in Sri Lanka. Your companies and professionals serve and thrive in our economy. Our lives are entwined.
Your leaders will caution and indeed admonish us, as you have in the past. And we shall indeed have no choice but to listen and learn
It will not be all sheltered waters. Squalls and sudden gusts will inevitably shake our keel but not our fortitude. When the furor dies down, when voices mute and calm prevail, we shall sail into calmer seas and seek safe anchorage.
This opinion is borne of personal disposition, the result of rose-colored glasses I opt to wear. I believe I will be proven right.