Govt policies have set economy back 15–20 years, Fayyaz says

Former Economic Minister Fayyaz Ismail has accused the government of setting the Maldivian economy back by 15 to 20 years through its economic policies, arguing that businesses built over generations have been damaged.

Speaking at a Maldivian Democratic Party (MDP) National Council meeting on Monday night, Fayyaz criticised the economic policies pursued by President Mohamed Muizzu’s administration and said rebuilding affected businesses would take years.

Fayyaz, who served as Economic Minister during the administration of former President Ibrahim Mohamed Solih, said damage to businesses would have consequences for the economy.

“The tourism industry was the only avenue left through which we could barely catch our breath. And now, they have destroyed that too,” Fayyaz said.

His remarks came after Muizzu ratified amendments to the Foreign Exchange Act requiring resorts to convert 40 per cent of their monthly foreign currency revenue through local banks.

Fayyaz argued that the requirement would affect resorts’ ability to continue paying employees in US dollars.

He also alleged that foreign currency obtained from businesses through the conversion requirement was being directed towards businesses and individuals favoured by the government.

“Previously, dollars went towards employees’ personal needs and partly into the private sector. What this administration is doing — whether taking 20 per cent earlier or 40 per cent now — is funnelling these funds directly to their preferred individuals and businesses,” Fayyaz alleged.

He did not provide evidence at the meeting to support the allegation.

Fayyaz also questioned access to foreign currency through bank cards, saying previous assurances that debit and credit cards could be used for foreign currency transactions had not materialised.

“They claimed debit cards would work. They claimed credit cards would work. Where? It was a complete lie; they don’t work,” he said.

Fayyaz accused the government of creating uncertainty for tourism businesses by changing laws and regulations. He also criticised statements by government officials about resort owners and tourism investors, saying they were being portrayed as responsible for the country’s economic problems.

The amendments to the Foreign Exchange Act, ratified on Monday, increase the revenue-based foreign currency conversion requirement for resorts from 20 per cent to 40 per cent.

The government says the measure will increase the amount of foreign currency entering the banking system and improve access to dollars for businesses and the public.

Speaking after ratifying the amendments, Muizzu rejected concerns that resorts would be unable to meet their financial obligations under the 40 per cent requirement.

The President said resorts could continue to pay loans, employee salaries and operating expenses while complying with the law.

Muizzu also warned against attempts to underreport resort revenue to reduce conversion obligations, saying the government was introducing systems to identify such practices.