MATI meeting turns heated over 40% dollar conversion rule

A meeting of the Maldives Association of Tourism Industry (MATI) turned heated on Tuesday as members debated how the industry should respond to a legal requirement for resorts to convert 40 per cent of their dollar revenue through banks.

The exchange involved MATI Chairman Hussain Afeef, also known as Champa Afeef, and Mohamed Khaleel, a shareholder in a company that operates several resorts in the Maldives as well as Manta Air. Khaleel recently resigned as President Dr Mohamed Muizzu’s tourism adviser after expressing concerns over the foreign exchange changes.

During the meeting with tourism industry representatives, Khaleel urged MATI to take legal action over the amendments.

“MATI has to speak on behalf of its members instead of leaving individual members to defend their rights on their own. Otherwise, there is no purpose in having membership in MATI,” Khaleel said.

He said he believed the amendments were unlawful and should be challenged in court.

Afeef responded by questioning why Khaleel had not raised those concerns with the President while serving as his adviser.

“Shouldn’t you have shared these concerns with the President? You were serving as his adviser,” Afeef said.

Khaleel replied that this was the reason he had resigned.

“I resigned because of that. My concerns were not listened to,” he said.

Khaleel continued to call on MATI to act collectively on behalf of its members and said meetings with the government and ministers had not produced a solution to the industry’s concerns.

“As an association and as the lobbying body for the tourism industry, MATI has to take a legal route on this matter,” Khaleel said.

He said he did not believe further meetings alone would resolve the issue.

Khaleel also argued that the government had no right to require businesses to convert 40 per cent of their revenue if doing so harmed their operations.

“I personally believe the government has no right to order us to convert 40 per cent of the income earned by our businesses in a way that destroys those businesses,” he said.

He said participants at the meeting agreed that converting 40 per cent of dollar revenue would make it difficult for businesses to operate.

“It is the government’s responsibility to protect businesses. If it cannot do that, what is the purpose of having a government?” Khaleel said.

Khaleel acknowledged that a court challenge may not necessarily produce the outcome the industry wanted, but said MATI still had a responsibility to pursue the matter.

“I know this is a banana republic. The judiciary may not work in the way we would want. But our responsibility is to take the issue to court and see what happens,” he said.

Afeef rejected Khaleel's description of the Maldives as a “banana republic”.

“I love this country. This is not a banana republic,” Afeef said. “This is our country, and whenever it needs to be defended, I will defend it.”

Khaleel responded by asking whether defending the country should also mean watching its economy deteriorate.

The exchange continued when Afeef questioned why Khaleel had not opposed an earlier amendment requiring 20 per cent of foreign currency revenue to be converted while he was still serving as the President’s adviser.

“If that is the case, why did you not speak against it when the law was amended to require 20 per cent of revenue to be converted? Weren’t you the President’s adviser then?” Afeef asked.

“I did raise it,” Khaleel replied.

Afeef then said he did not want to continue arguing over the matter, adding that MATI had worked with successive governments and had generally sought solutions through consultation whenever concerns arose.

The 40 per cent conversion requirement has drawn criticism from some resort operators, who have argued that a large share of their dollar revenue is already used for loan repayments, imports, salaries and other operating expenses.

MATI has said it has been raising industry concerns with relevant authorities and has called for further discussions with the government over the implementation of the foreign exchange changes.