President Mohamed Nasheed delivered his 76th address on Friday last, which was also the day after the completion of 2 years and 22 days of his first term as President of Maldives.
In this week’s radio address the President said that he no longer wished to speak about cutting down on the size of the Civil Service, but he wished to speak about creation of job opportunities. The President said that this will be done through mechanisms within the proposed budget for next year, which would facilitate the creation of 20,000 jobs. He said that these jobs would be created within the private sector and also said that this would be the main focus of the 2011 budget submitted to parliament.
The biggest challenge for the proposed development initiative of the president would be the institutionalized robbing and legalized theft from SMEs that is so common place in the Maldives.
Several small businesses in the country are hard hit by payment defaults for goods and services that they give to customers. In the absence of sufficient legal mechanisms that enable collection of receivables, some resort to the practice of taking post dated checks.
In the event of a post dated check getting returned by the bank, the onus is on the person who gives the goods or services to find the person who defaulted on payment. And this has also to be done within one month, during which time it is usually impossible to find the person to hand deliver the notice of default to the issuer of the check. And when it is not possible the person who offered the service or gave the goods have to suffer. He is penalized and the person who took the goods and services goes squat free.
In addition, the banks take no responsibility for the bank instruments that they distribute in the form of bank checks. Persons and Companies who use checks “to be returned by the bank” have a way of getting assistance from the banks to continue to expand their fraud facilitated by the banks. They open new accounts in various names and continue to kill the small timers.
Maldives is a country where terms for payment agreed in contracts have no value. It doesn’t mean a thing. Small businesses don’t have the means to invest in credit collection from those who refuse to pay. They cannot afford the legal fees and the length of time that it takes to have a case closed. They are also at the mercy of these “investors” who rely on robbing the small businesses for their investments, to get additional work in order to get their employees engaged. A number of the government agencies also cannot be trusted to pay, and are managed by people who don’t have any idea of the suffering of the people who have to run after them to get what is theirs.
I can imagine the plight of the SMEs that will come up, who cannot survive unless the President sets up yet another commission to protect their very existence.
The Maldivian economy fosters institutionalized theft and robbing of vulnerable small businesses by daring investors. Unless this situation is reversed, the small businesses that would be put up through development loan financing will go bankrupt and the jobs that they create will add to the growing number of the unpaid and employed in this country.
It is unlikely that much will happen unless the President himself personally puts this right, as most of the others institutions are manned by people who have a conflict of interest issue when it comes to putting these things right.