IMF’s executive directors asked for co-ordinated actions to with fiscal authorities to facilitate necessary monetary policy actions to safeguard the exchange rate peg.

“To this end, they commended the authorities’ decisive action to discontinue the exceptional use of the Maldives Monetary Authority advances, and underscored that this should be complemented by more active liquidity management over time,” an IMF statement said.

“Directors also encouraged an acceleration of foreign exchange market reforms to enhance the credibility of the peg.”

In 2023, Maldives’ current account deficit had widened amid foreign borrowings to finance capital spending also due to a run down of reserves after printing money for temporary advances.

The advances have since been converted to long term bonds but, official reserves fell from 832 million dollars in 2022 to 589 million dollars in 2024.

The Maldives is the richest country in South Asia due to maintaining its soft-dollar peg with some success despite hiccups from money printing from time to time.

The rufiyaa’s peg to the US dollar has only broken a few times and is now at 15.4 to the US dollar.

In 2022 inflation was only 1.9 percent. Without breaking the dollar peg a monetary authority cannot create very high levels of inflation above that of the USA.

In supporting the Maldives peg, the IMF is sticking to its founding principles of maintaining stable currencies and allowing free trade to take place.

From 1978, after its the Second Amendment external anchors were discouraged and countries like Maldive’s neighbor Sri Lanka started to have high levels of depreciation, inflation and social unrest as well as failed free market reforms.

In the Covid crisis the peg held despite a 30 percent contraction in the economy as tourism collapsed.

All South Asian currencies are derived from the Indian rupee at 4.70 to the US dollar.

Its budget deficit suddenly started to rise due to infrastructure projects – some financed by China – and also higher public sector salaries.

The debt to GDP ratio was 118 percent.

“The successful implementation of goods and services tax (GST) rate hikes has borne fruit, bringing sizable revenue windfalls in 2023,” the IMF notice said.

“Nevertheless, the overall fiscal deficit is estimated to reach13.4 percent of GDP in 2023, with public debt to rise further to 118.7 percent of GDP in 2023.”

A World Bank – IMF debt sustainability analysis has found that its was unsustainable without significant policy changes, the Maldives remains at high risk of external and overall debt distress.”

There were protracted breaches in several debt indicators over the medium term making the assessment of debt unsustainable.
“Gross external financing needs are expected to rise in the coming years, reflecting persistently large fiscal deficits and repayments and rollovers of nonconcessional debt, mainly global sukuk,” a staff report said.

“External refinancing pressures are expected to peak in 2026.

“Increasingly higher amortizations and large interest payments would trigger protracted breaches in
several debt indicators by 2026, similar to the previous DSA.

“The debt dynamics will remain vulnerable to adverse shocks in growth, interest rates, and fiscal position in the near term.” (Colombo/May15/2024)

But that would require changes in policies and regulations to boost investor confidence and protection of digital content, they note.

Bhutan’s economy is currently driven by the hydropower and tourism industries. But, as Dr Uwe Drager of the German Bhutan Himalaya Society, keynote speaker at the webinar on “Entrepreneurship and Innovation for Economic Growth in Bhutan” pointed out, for the country to maximise the output of their industries, especially in the agriculture sector, better planning, coordination and the introduction of standard technology and procedures must be in place.

Another area where approval procedures pose problems is solar power.

It’s an economy that struggles without a convertible currency he says. Less than twenty per cent of the GDP falls under the primary sector which also employs more than fifty per cent of the population, he explains, adding that the secondary sector which holds 34.2 per cent employs just ten per cent, while 46.6 per cent which is the tertiary sector accounts for 35 per cent of employment.

The webinar on November 17, was organised by the Friedrich Naumann Foundation for Freedom, South Asia and moderated by Sangye Choiphel, a researcher at the Centre for Bhutan and GNH studies. Panelists for the webinar included Ujjwal Deep Dahal, CEO, Druk Holding and Investment, Tshering Denkar of Denkars Getaway, a travel Blogger and Vlogger and Nyema Zam, Founder and CEO of Samuh Mediatech.

The webinar also featured a Guest Speaker, Rikesh Gurung the President of the Bhutan Association of Entrepreneurs (BAEyul) who said he would like to see policymakers move away from the hydropower and tourism model, to a more resilient and diversified economy.  Innovation, he said leads to empowerment and creativity helps adapt to change.  Bhutanese, he says must be like international personalities Bill Gates and Richard Branson, and think outside the box.  “The youth of the country must be innovative and creative in their ideas for business.”

Combining technology with the arts, Nyema Zam’s Samuh Mediatech, though catering to a small segment of the population within and outside the country, is providing direct and indirect job opportunities for Bhutanese; still a fledgling operation, her business has opened up over a 1000 positions for screenwriters, sub-title writers and translators, and she is confident of creating more than 2000 jobs within Bhutan, and 5000 more across the Himalayan nations. 

There’s huge potential, Zam explains, pointing out that despite being small population-wise, Bhutan’s use of social media is high.  Through effective marketing, that could easily be exploited to improve the economy, as almost all Bhutanese are Facebook users. Samuh Mediatech grew organically, first promoting content and subscriptions through Facebook and later via Instagram, Tik Tok and YouTube. “We promoted ourselves with the lowest costs possible, with high returns,” Zam notes, adding that Bhutan can create content for a fraction of what it costs elsewhere in the world.

While Bhutan’s film industry has been struggling for more than two decades, Samuh Mediatech, the first OTT platform in the country has produced more than a hundred pieces of original content in less than a year. Among them “Why is the Sky Dark at Night”, a short -film, produced on a shoestring budget was picked for the 26th Busan International Film Festival in South Korea.

Travel Blogger and Vlogger Tshering Denkar agrees that social media helps break boundaries. Her passion for showcasing Bhutanese life and local communities soon attracted foreign interest.  And in 2022, she was picked to co-star with Will Smith in the National Geographic ‘Pole to Pole” series. The advantage of being a small country, says Denkar, is the ease of getting exposure for the work one does; in her case, the content she put out crossed boundaries. Her opportunity to work on the ‘Pole to Pole’ series did not come through government entities tasked with promoting tourism, she points out.  It was the content she put out and the exposure it received that got her that opportunity.

Speaking of several initiatives involving local and international partnerships, Dahal says Bhutan must look at the global challenges and find solutions. “It is not about technology leading entrepreneurship, but creative minds coming together to meet the fundamental needs.” When a solution is found for an issue that concerns a large number of people, it is good for business, he says, pointing out that challenges must be turned into opportunities.

Bhutan, which recently launched a digital identity system, has several local and international collaborations for a digitally driven economy, says Dahal, adding that whatever model is chosen, it must be suitable for the country.

Despite the successes, there are many challenges say the panellists. In the case of the media sector, classification for small enterprises is almost non-existent, and investors continue to look for buildings and properties as collateral rather than the content the business has to offer. Anything that is valued at less than 10 million Ngultrum does not even fall into the category of CSI, says Zam. If the digital economy is to flourish, then there must be a value placed on intellectual property.

The lack of local expertise to build a world-class OTT platform means seeking that service from overseas providers; in the case of Samuh Mediatech, that comes from Singapore and Lebanon.

Current regulations allow only content produced in Dzongkha, the official language of Bhutan or English. That must change says Zam, to include pan-Himalayan languages, allowing content from Bhutan and countries from the region to reach a larger viewership. Her target is to reach 6 to 8 million consumers.

Cyber security is all-important says Denkar who had her content stolen, but had no recourse through local stakeholders to retrieve it.  It was through an agent based in the Philippines that she was able to contact the parent company of Facebook and Instagram to gain access to her material. Denkar also wants to see more awareness amongst Bhutanese on digital literacy and copyright.

She had also been fined for using a drone for her work, and questions why, if other industries are allowed to do so, it is not open to the creative sector.

Dahal meanwhile advocates a different approach to regulation; create first, push the boundaries, then regulation will follow. He points to Google and Facebook as examples, which came under global scrutiny, years after those platforms were launched.

Maldives’ Sun online reported that Muizza had called for national unity.

“Each Maldivian citizen is equal before me,” he was quoted as saying in a statement. “No matter their political affiliation, they are a Maldivian citizen in front of me. They are entitled to the same rights. They are entitled to equality in everything,”

The Maldives Progressive Party was formed by longtime Maldives leader Maumoon Abdul Gayoom.

The breakaway People’s National Congress was formed by Abdulla Yameen Abdul Gayoom, who is currently in prison for on corruption charges. His rule saw borrowings from China for infrastructure.

Muizzu has vowed to free Yameen, currently serving an 11-year sentence for corruption on the same prison island where he had jailed many of his political opponents during his tenure.

Muizzu has promised to free Yameen and on Saturday urged outgoing president outgoing president Ibrahim Mohamed Solih to use his executive power and transfer Yameen to house arrest, AFP, a news agency reported. (Colombo/Oct01/2023)

As in many Asian countries, CSOs or Non-Governmental Organisations (NGOs) as they are also known, are viewed with suspicion, often accused of being agents of foreign powers and dollar hungry. In Bhutan, CSOs are also viewed as family businesses and self-serving.

But in Bhutan now, things seem to be changing. As Executive Director of Bhutan Transparency Initiative (BTI), Dr Rinzin Rinzin told a webinar recently, not only is the media looking at CSOs in a better light, they even promote them now. CSOs play an oversight role he adds, and have gained the trust of the judiciary, which opened itself up for assessment.

The findings, he said were shared at a live Talk Show.

Dr Rinzin, along with Dr Chencho Lhamu, Executive Director, Bhutan Centre for Media and Democracy, and Sangay Tshering, President of the Loden Foundation, was speaking at a webinar ‘Empowering Bhutan’s Civil Society: Overcoming Challenges and Finding Solutions’ organised by the Friedrich Nauman Foundation for Freedom, South Asia, on May 26th. The discussion was moderated by Multimedia Journalist Namgay Zam.

The attitudinal change comes following initiatives by BTI and the Bhutan Media Foundation which conducted awareness programmes on the functions of CSOs to Editors and Reporters to dispel misconceptions.

As Dr Rinzin points out, media is the main conduit for information sharing between various sectors and the public, and having the media better understand the workings and role of CSOs helps.
There is, also now, clarity on registered CSOs versus volunteer groups, he adds. In the coming months, similar initiatives are planned to educate leaders and elected government members of local government.

Bhutan currently has 54 Registered CSOs, working in the areas of poverty alleviation, youth, good governance, caring and rehabilitation, environment, animal welfare, arts and culture to name some. There are also registered community-based groups working with farmers, for instance, while some non-formal groups are involved in supporting youth and women.

With a view to strengthening the role of civil society in improving Bhutan’s social welfare services, Parliament passed the CSO Act in 2007, and in 2016 the King of Bhutan bestowed the National Order of Merit (Gold) on civil society as a whole, in recognition of its contribution to nation building.

CSOs have also collaborated in developing important documents such as the 21st Century Economic Roadmap, revisions and amendments of the Information, Communication and Media (ICM) Act 2018, LGBTQI issues, National Policy for Persons with Disabilities 2019, National Policy for Persons with Disabilities 2019, National Sanitation & Hygiene Policy 2017, Rules & Regulations for Entrepreneurs, etc., a briefing note from FNF states.

More recently, in May this year in fact, the Parliament of Bhutan and Civil Society Organisations, released a Strategy Document, which seeks to increase CSO involvement in the parliamentary and decision-making processes, thereby improving democratic governance. Yet another joint effort is the Government, CSO Collaboration Guidelines (Draft).

CSOs have contributed to the welfare of more than 50,000 households, about 30 per cent of that nation’s population, the webinar heard. CSOs also generate employment opportunities and revenue.

To ensure inclusiveness and better representation, CSOs formed the Bhutan Civil Society Network which is governed by a ten-member Executive Committee. To counter criticisms, CSOs examined their internal mechanisms and came up with the Bhutan Civil Society Organisations Accountability Standards 2023.

Dr Rinzin added that for the third time, they were chosen to carry out a national study on the environment. The information gathered sheds light on the types and levels of corruption, a database useful for the government.

Social accountability training at the grassroots level, raising awareness on their rights, and providing assessment techniques are paying off says Dr Rinzin, who stated that following an assessment of a village road by the local residents, the contractor had been forced to redo it.
Yet, CSOs continue to face many challenges, the webinar heard.

The role of CSOs remains unclear in the minds of the people, says Dr Chencho Lhamu, often identifying them as being government or private sector entities. There still needs to be more clarity on the work carried out by CSOs, she says, adding that in mature democracies, unlike in Bhutan, CSOs are more than entities that simply complement and supplement government services.

While CSO are ‘clear about their own mandate’ and are faithful in meeting those goals, they can do more in influencing government, and be part of the policy dialogue, she adds.

Following the introduction of the CSO Act, registration is granted following a rigorous vetting process, which, though good, also deters other smaller groups, Dr Lhamu explains.

A main issue of concern is funding, both external and from within the country. Though Bhutanese give generously to religious and affiliated organisations, they are not as forthcoming in providing financial support to CSOs states Dr Lhamu. This could be because the public does not see tangible evidence of the services provided by CSOs, she adds. With the economy as it is, points out Sangay Tshering, the Private sector, even if willing, is unable to commit to providing financial help.

Dr Rinzin would like to see more regional and international supports to address the issue, and also the establishment of an endowment fund with the assistance of development partners. Nordic governments even set aside funds in their budgets for CSOs says Dr Rinzin. Moderator Namgay Zam explains that to ensure integrity, CSOs pick funding partners only if they are ‘aligned’ with their own principles and if the project is beneficial to the people. On the flip side, Sangay Tshering argues that funding partners too must be satisfied that Bhutanese organisations are committed to carrying out the work.

There is also the issue of foreign funding being seen as interference with the nation’s internal affairs. However, Dr Rinzin is of the opinion that with the collaborations entered into between the government and CSOs, and parliamentarians displaying an eagerness for inputs from CSOs, such suspicions may die a natural death. CSOs, he says must be tactful in their actions.

Dr Chencho also says it is important for CSOs to keep in mind that their work is in line with national plans and that message must be made clear to all.

CSOs are also affected whenever Bhutan calls an election. Laws prohibit grassroots-based work in the months running up to an election. This means a year-long project undertaken by a CSO, must be completed within a shorter duration, severely impacting programmes.

Responding to a question on the role of women and CSO initiatives, Dr Chencho explains that to an extent, women and women-related issues are addressed. Some CSOs work to promote women in politics, while others deal with the rights of the LGBTQ community. However, she acknowledges that CSOs aren’t advocating enough for women.

Like many other South Asian nations, Bhutan too is dealing with a heavy migration pattern, with many younger folk leaving for greener pastures. Says Sangay Tshering, since Bhutan opened up to the world, more Bhutanese feel they need to strike out in ‘fear of missing out.’ The Loden Foundation provides seed money to entrepreneurs, and several of those who were recipients and who have migrated, are now able to make monthly repayments. They also continue to keep their enterprises running in Bhutan. Had they remained, he asks, with the economy in its current state, could they have returned the loans? As it stands, they have now become better contributors to the economy.

Chencho points out that migration is inevitable when there are better opportunities beyond Bhutan’s borders. Her contention is that with real transformation and enabling policies that would allow for all sectors to flourish, migration could be mitigated.

The Maldives Monetary Authority uses the exchange rate as external anchor but monetary stability is threatened when it prints money for the government or engages in aggressive open market operations.

“Directors advised that the Maldives Monetary Authority (MMA) advances to the government should be gradually phased out to lower pressures on international reserves and prices,” the IMF said in a statement after annual Article IV consultations.

“MMA should stand ready to further tighten monetary policy should inflationary pressures increase and/or the elevated parallel market premium widen further.”

Though Sri Lanka is advised by the IMF to depreciated the currency to make up for mis-targeting of interest rates,

While the Maldives is allowed to maintain its peg and policy consistent with maintaining the exchange is advised.

“Under the current monetary policy framework, the exchange rate peg with the US dollar is used as the intermediate target to achieve price stability and the liquidity position of the banking system serves as the operational target, in order to maintain the domestic money supply consistent with economic activities,” according to the MMA.

Most of the best performing East Asian export powerhouses operate similar regimes, though any attempt to enforce a policy rate through aggressive open market operations, when the economy recovers is likely to lead to a fall in reserves and pressure on the exchange rate.

Maldives GDP contracted 33.5 percent in 2020 as the Coronavirus pandemic evaporated tourism revenues, but the 15.4 rufiyaa to US dollar peg held.

In 2022 real GDP is expected to grow 37 percent.

As the economy recovered in 2021, Maldives foreign reserves had fallen from 985 million US dollars to 806 million US dollars. In 2022 forex reserves are expected to fall to 695 million dollars.

Attempts to keep interest rates down after selling reserve to maintain the peg by printing money, makes the monetary authority effectively shift to a reserve money targeting framework instead of the exchange rate, further boosting domestic credit and loss of reserves.

Domestic credit growth was 20.8 percent in 2022 according to IMF data, up from 8.8 percent in 2021.

For Sri Lanka when the rupee comes under pressure from domestic credit, the rupee is urged to be depreciated with the exchange rate as the ‘first line of defence’ panicking importers and exporters.

Such ‘first line of defence’ currency collapses in 2018 and 2020 earned Sri Lanka two downgrades on the road to eventual default.

A large section of Sri Lanka’s population is now struggling to feed itself and rice is going abegging as the real value do the rupee and their salaries have fallen.

The Maldives government revenues and grants are expected to improve to 28.9 percent of GDP in 2022 from 26.6- percent in 2021 and to 29.6 percent in 2023.

As expenditure went up the deficit remained at 14.3 percent of GDP. The deficit is expected to fall to 9.9 percent in 2023. Without grants the revenue is expected to fall to 11.4 percent of GDP from 15.4 percent.

Amid the strong economic recovery and the peg, debt to GDP had fallen to 127 percent of GDP from 154 percent.

In sharp contrast, Sri Lanka which has a fully fledged central bank with aggressive open market operations to maintain its policy rate saw its rupee collapse from 200 to 360 to the US dollar.

As other countries recovered from the Coronavirus crises, Sri Lanka’s economy is to contract almost 8.7 percent.

Both the rupee and rufiyaa are derived from the Indian silver (later gold) rupee at 4.70 to the US dollar and 13.6 to the Sterling.

But the IMF warned that the Maldives was still at debt distress.

Since 2009 the MMA had learned how to do open market operation and it also raised civil service salaries amid a popular vote. It also started borrowing from China for infrastructure. (Colombo/Dec21/2022)

The upgrade is due in 2023 and as the nation prepares for the change of status, it also needs a boost from the private sector to sustain the momentum.

However, the nation which prides itself on a high rating in the Gross National Happiness Index may have to revisit some of its trade and sustainable development policies if it is to be more attractive to youth, entice more tourists and attract international investment.

These challenges and opportunities were discussed at a web talk titled “Revival of the Bhutanese Private
Sector” organised by the Friedrich Naumann Foundation South Asia, on November 23 .

Moderated by Sunil Raisally, Private Sector Analyst and Advisor to the BCCI and Managing Partner of Metho Dawa Consultancy Services, the panel included Chencho Tshering, Managing Director, Wangchuck Group of Companies Pvt. Ltd., Sonam Chophel, CEO, CSI Markets and Consultant, and Singye Namgyal, President, SAARC Youth Entrepreneurs Forum and Joint MD, RSA Pvt. Ltd.
Of Bhutan’s 779,000 population around 55 per cent are in the 22-60 years productive age group, says

Raisally, adding that 70 thousand youth are expected to join the work force within the next five years.

This means that Bhutan must create around 13,500 jobs yearly, a figure that the government and
affiliated entities cannot meet alone. As he points out, the state sector creates between 500 to 1000
jobs yearly, and the onus falls on the private sector to pick up the rest.

According to the panelists, Bhutanese youth are looking for greener pastures in developed countries. If
Bhutan is to buck this trend says Tshering, skilled workers must be paid more and though the private
sector will not be happy, it is the “only way to manage the situation.”

The cost of the wage increase should be transferred to the customer, and she says it is time the private
sector moved away from traditional marketing practices and adopts innovative methods for pricing and
marketing. Furthermore, the new policies make it a level playing ground, where the role of the travel
agent or middle man is no longer necessary, making it possible for the hospitality industry to go direct to
the customer.

Bhutan is just opening up to tourists after a two-year lock down caused by the 2019 Covid pandemic
which severely impacted tourism, a major income source. According to the Annual Report of the

Tourism Council of Bhutan (TCB), arrivals had “dropped by 91 percent from 315,599 visitors in 2019 to
29,812 visitors in 2020.”

When Bhutan first allowed tourists into the country in 1974 it was with safeguards that discouraged
mass tourism to keep its environment and ecology is safe.

In September this year, the industry came out with a new motto ‘Believe’ and also increased the Sustainable Development Fee (SDF) from US$ 65 per night per person to US $ 200 per night per person. It’s a rate that must be revisited says Tshering who points out that October arrivals, usually a peak time, was just 12 per cent of the volume seen for
the corresponding month of 2019. Based on that, the projected arrivals for the coming year would be
about 37,000. Not good news when there is an over-supply of hotel rooms, which Tshering says is at 1.2
million, not counting those under construction and those uncertified. Tshering would like to see some
controls, similar to Singapore, introduced to rationalise the industry and measures that would draw
more tourists to Bhutan.
While Bhutan’s King had implemented many relief measures during the pandemic, the hotel industry is
heavily in debt and the two-year deferment granted by banks isn’t enough time to recover, she explains.
Nor are the lending rates pertaining to the hotel industry good enough, given the SDF tourists must pay
to enter Bhutan.
Though training courses are available through both the government and the private sector, Tshering
believes there is a mismatch between what is available and what youth want. Pointing out that those in
the trade need to improve their skills, she says that providing free training is not the best way to go.
“There must be buy-in from the youth.”
The manufacturing sector plays an integral role in generating employment opportunities in a short time,
says Namgyal. However, in Bhutan this sector which has remained stagnant for 25 years, accounts for
less than 7 per cent of the GDP. India, Bhutan’s main trading partner, now requires less hydro-electricity
as it has improved its own generating capacity. While it negatively impacts Bhutan’s foreign earnings,
Namgyal explains that domestic businesses should use the situation to their advantage as the power
generated by Bhutan is cheap.
There must be a quantum leap in the manufacturing sector if it hopes to contribute more to the GDP.
As it stands, of around the 463 units in the manufacturing sector, only 23 are considered large scale, he
adds. Close to 80 per cent are considered cottage industries.
The lack of skilled workers and access to a convertible currency to import raw materials and less than
satisfactory infrastructure resulting in high logistical costs are some of the challenges faced by the
manufacturing sector.
But those can be overcome, he points out if the sector leverages more on the available resources such
as the abundance of water, and ‘cheap and clean renewable energy. Bhutan also enjoys preferential or
free access to regional markets, with India and Bangladesh being the top exporters.

Namgyal emphasises that the ‘overarching regulatory framework or what is called the eco system’ must
be reformed to support competitiveness and diversification of the sector, and a change in mindset
against blue collar work. Further, he suggests a tax holiday for industries exporting to India, long-term
projections of electricity tariffs ensuring a definite price for manufacturers, cash flow-based financing for
projects, relaxing value-added requirements on imported raw materials, inviting Foreign Direct
Investments, developing the dry ports so containers entering Bhutan do not return empty, and
establishing special industrial zones, to boost the manufacturing sector. Currently Bhutan does not
permit the export of timber, even those rotting in forests he says. However, with a forest cover that
exceeds the constitutionally mandated 60 per cent, Bhutan should consider harvesting the forests in a
climate friendly manner and one that follows Buddhistic precepts of the “middle path.”
Though the backbone of Bhutan’s economy, the cottage and small industry (CSI) sector is disorganised
says Chophel, who adds that while between 40 to 60 percent of the businesses are women led, most are
operated on a sole ownership basis or has just two or three employees.
CSI is mostly limited to contract and service work, he says, adding that the sector is plagued by supply
chain challenges, difficulty accessing financing, Bhutan’s preference for imported goods and the low use
of technology. Though the pandemic impacted CSIs, Druksell, an e-commerce platform launched in
2012 and available in over 30 countries provided marketing opportunities to start-ups and small
businesses.
Druksell, scheduled to be available on-line in Australia, India, and the United States soon, already has a
retail outlet in Thimphu, and will be opening a second in another Bhutanese city, Chophel added.
Private enterprises are critical for the growth of CSIs says Chophel, adding that a start- up requires an
investment of less than 10million Ngultrum (about 120 US $). Though the government has provided
many opportunities for CSIs, Chophel states that constant and consistent upskilling and reskilling will
prepare Bhutan for the “21 st Century workforce”, while more investment in infrastructure will improve
rural connectivity. As well, it is important, he says, to look at reducing non-tariff barriers, and better use
of resources to scale up operations.
To attract a younger workforce, and international interest, he suggests the public and private sector
should work together, and consider strategic regulatory reforms. The private sector, he adds, has the
capacity to open up to the international market.
The keynote address was delivered by Reinhard Wolf, President of the German Bhutan Himalayas
Society.

A webinar on the Role of Women in Maldivian Society, organised by the Friedrich Naumann Foundation for Freedom, South Asia on November 7th, heard that although laws have been passed supporting increased roles for women, implementation of these regulations has been poor.

Panellist Dr Marium Jabyn, co-Founder and Chairperson of Equal Rights Initiative, points out that there are more women law graduates than males and more female batch toppers, yet those numbers are not reflected in public service or in the corporate world. Even where women are appointed to the Bench, she states, they are rarely assigned even a minor criminal case. That’s indicative of society’s perception of a woman’s role, she points out.

The webinar which included MP Jeehan Mahmood, who chairs the Parliamentary Committee on Human Rights, Child Protection and Gender, and Yumna Rasheed, entrepreneur, and Founder of ‘The Gift Basket Maldives’, was moderated by Journalist and Media Consultant Raaia Munavvar. The keynote address was by Lakshmi Sampath Goyal, CEO of Centre for Civil Society, India.

Despite the enactment of several laws, Domestic Violence Prevention Act (2012), Sexual Offences Act (2014), and Gender Equality Act (2016), the application of these legislations leaves much to be desired Jabyn notes, stating that there are some atolls which have no women police officers. Victims of abuse are often advised by the first point of contact, to accept the situation and return home.

Even when women apply for leadership positions in the legal system, they are often advised by clerics that such posts are not for them. Society’s perception of women too must change she says, adding that often there is a preference for male clerics or religious scholars to deliver a religious discourse. Women themselves, she says, do not accept that they are good enough for these roles.

“Family courts in the Maldives is a women’s court,” she says pointing out that one would hardly find any women flocking to the other Courts, as they do the Family Courts. That, she adds, is owing to the gaps in the support systems available to women.

The amendment to the Decentralisation Act in 2019 allocating 33 per cent of seats to women in local government paves the way for the election of 370 women. However, the story is quite different at the People’s Majlis (Parliament) level in this once matriarchal society, where of the 87 MPs only 4 are women.

MP Mahmood, whose parents did not adhere to the strict stereotyping of gender roles, says her entry to Parliament was an eye-opener. Having previously worked in women-led enterprises, she had ‘the shock of my life’ on entering parliament, where there is a ‘very gendered view on how to do politics; where the louder one is and name calling is the name of the game. She had asked her father for guidance on how to adapt to this new situation and was advised to be herself and more assertive to break the model.

Jabyn concurs, stating that in the legal field too, those who are louder, usually the male, are perceived as being the better lawyers. The younger generations grow up with certain expectations, only to face a harsher reality when they enter the real world, Jabyn says.

Getting pregnant while a Member of Parliament was quite another experience Mahmood says. Standing Orders do not address the issue of pregnancy, and she was determined to attend every session and be present during the voting period even if it meant not taking a toilet break, to prove that women do not have to compromise on their womanhood to be in leadership roles.

They are worn thin, she says, with just four women in parliament, and the need to be in as many committees as possible. She has proved her ability to read and understand budgets and points out that the absence of appropriate policies makes it difficult to question inadequate financial allocations for areas such as food and health. It is, she says important for parliamentarians to be cognizant of the fact that “We are legislating not for one gender, but for both the genders.”

The trick is also to continue asking questions without giving up, Mahmood says, adding that after more than two years of prodding, the Maldives is set to open a separate rehabilitation centre for females on November 13th.

Yumna Rasheed, who has handled World Bank and UN projects for the Maldivian government, says on returning to the workforce after maternity leave, she was told she would not be able to cope with the work, despite her education and experience.

But she chose to turn a deaf ear to criticisms and carry on.

Rasheed turned to business to cope with insomnia and says the opportunity to introduce locally produced crafts to the market has given her much satisfaction. She put the long sleepless nights to good use, designing and crafting local products to break into an imports-dominated market.

She says she had concerns about discussing her insomnia publicly, but when she did, she received a positive response. The Covid-19 pandemic provided women more opportunities to become entrepreneurs and break out of the stereotypical role of homemaker and caregiver; “many women came up with business ideas,” a change from what it used to be three to four years earlier.

The panellists stress that though gender parity has been achieved in the field of education, and though more women are in civil service, they continue to be in lower-paying, clerical positions. MP Mahmood states that maternity leave and other family needs result in women taking that much longer to reach leadership positions. A recent study reveals that women are treated far worse in the private sector and small business enterprises, where there is little or no adherence to Employment Law, Mahmood points out. Forty-four per cent of the informal workforce is women, she says, and they have little or no social protection.

The situation is worse for disabled or otherwise vulnerable women such as widows, senior citizens, the girl child, and migrant workers the webinar heard.

And as Jabyn points out, there is a disparity between the needs of women who live in the North and South atolls, too.

If these issues are to be adequately addressed, says MP Mahmood, then they must be all represented at decision-making bodies.

She also says that males who promote gender equality must be given more space both in the Maldives and across the world. Rasheed adds that while women bring more value and awareness to the table, ‘true change comes when women do not have to be better but are accepted as just as good.”

While previous generations had the support of extended families, freeing up women to concentrate on careers, in today’s nuclear families both partners must share family responsibilities, says MP Mahmood, who adds that younger generations must be brought up to be aware of gender biases but away from such practices.

It is heartening she says that women colleagues include girls on their campaign teams and make a point of supporting women in whatever their needs are. In her case, she constantly reminds herself that she not only ‘represents the rural, but also the rural women.’ Jabyn points out that though Maldives is on the right path, more needs to be done in terms of gender sensitization.

Clearly, one would expect that gender parity in education would result in women’s emancipation, especially when the Maldives was formally a matriarchal society.

Jabyn’s doctoral research centered on women in public life, and she says it is time to ask where these perceptions of a support role for women and leadership for men come from; “is it Islam or have we created it ourselves?”

Kathmandu’s new Mayor, Balendra Shah, is a 32-year-old structural engineer and popular rapper who contested as an Independent. His Deputy, is 29-year-old Sunita Dangol, a Social activist, Broadcaster and Communications Manager.

The nationwide Local Government election maybe a harbinger of things to come; 41 percent of the elected candidates are youth, and a majority contested as Independents.  The choice for these youth to contest as Independents points toward a breakdown in trust levels between youth and the country’s established political parties.

In the country’s main decision-making bodies, at both federal and regional level however, the usual trend prevails; thirty six of the 275 Members of Parliament are youth, while in the Upper Chamber only 7 of the 59 Member assembly are youth. It is the same in the Provincial Assemblies, where only 130 of the 550 members fall into the 25-40 age group.

The Local Government win was a cause for celebration during a webinar hosted by the Friedrich Naumann Foundation for Freedom (FNF) South Asia on May 25^th, where panelists discussed “Youth Participation in Nepal Politics.”  Bisesh Sangat, a Communications Practitioner was the Moderator, with Sunita Baral, President of the All Nepal National Free Students Union, Kanchan Jha, a Youth Leader with the Nepali Congress and Pradip Pariyar, Executive Chairperson of Samata Foundation making up the panel.

The aim of the discussion was to identify the interconnected role of young people “in improving the Nepalese political landscape and ways to address limits to participation.”

The webinar heard that the percentage of youth, women, and marginalised communities at the centres of power was low, and that the main cause is the hesitation on the part of major political parties to nominate representatives of these groups to decision making bodies.

The panellists agreed that youth are a quintessential aspect of modern democracy. “Engaging young people in formal political processes certainly help shape politics in a way that contributes to building stable and peaceful societies that promptly responds to the needs of general citizens, especially the younger generation, fostered through a unique and innovative way of thinking, full of energy as well as a passion for contributing to the betterment of their respective countries,” they said.

“The world today has experienced an upsurge in youth involvement in political processes whereby they are engaged in fighting for sustainable change that would address the pressing challenges of society – authoritarian regimes, accountability, corruption, and inequalities” Bisesh Sangat pointed out.

As Kanchan Jha pointed out, Nepal’s population is very diverse, and youth belong to different social and economic groups.

“In politics, youth mean the power to innovate and to change. They can be a driving force of change. They have zeal and they understand the dynamics of change and aim for a better future” Jha said.

Jha also pointed out that Nepalese below the age of 30 “have never known the monarchy or the absolute barriers of traditional Nepal. Those who were young children during the Maoist insurrection are now young adults in a restructured, decentralized, democratic republic. This group has an empirical reality and in my opinion are the youth of this country.”

The Nepalese Civil war which began in 1996 pitted the then ruling Monarchy against Maoist rebels for ten years. In 2006 a comprehensive peace deal was reached which saw the birth of the current Federation. Two years later the Monarchy was abolished.

Nepal’s youth, pointed out Sunita Baral, have always been involved in politics, mostly engaged in organising and participating in mass protests.

“However now it has changed, and they are playing an important role in the democratic process in Nepal. They want to be leaders in social and political organisations in the country,” she said.

Pradip Pariyar, whose has worked in Nepal and on international assignments, added that the conflicts the country faced negatively impacted the youth.

“They lost their lives as well as their education,” he pointed out, adding that the Shah and Dangol victories are a cause for celebration.

He pointed out that senior political leaders must be congratulated for their role in changing an autocracy to a democracy. However, they are failing to train young leaders he said, adding that.  “This is one of the most important challenges we are facing right now.”

Jha agrees with Baral that the youth of yesteryear lent their muscle power to political parties.  “The patrimonial party leaders demand blind loyalty to themselves,” he said.

The main challenge faced by youth in moving up in the ranks of established political parties is the lack of training in decision-making roles, the panellists noted. In fact, Baral had spent 20 years in her Union, before becoming its leader.

Moving into a role that she can contest for a Parliamentary seat still seems distant. “But we are fighting for it,” she said.

Admitting that part of the problem is his party, the Nepali Congress Jha added. “But recently the party has taken a decision to include a minimum of 15 percent of members between 16 and 30 into all the Committees at the Convention.”

According to the panel constraints imposed on young by established political parties has resulted in a majority of candidates contesting as Independents.

Youth and older politicians accuse each other; while the youth claim that political leaders do not address the aspirations of the youth, the more mature politicians argue that the youth are not prepared for political leadership.

Pariyar says he would like to see more ethnic and religious diversity the youth groups. “I don’t see that as much as it should be,” he said. Though Hindus make up a majority of the population, there are Buddhists, Christians and Muslims too in Nepal.  The country was officially Hindu during the time of the Monarchy, but since the creation of the Federal Republic, Nepal has been officially secular. There are also many caste and linguistic groups.

Jha claimed his Party has had a long record of inclusivity with a place for all the groups. However, Pariyar noted that not many minority religious or ethnic groups are represented in leadership roles.

The election of two young individuals to head Nepal’s most important municipality is indeed a progressive step, however, the challenge the country now faces is to work out strategies that would create the space for more youth to be elected to higher decision-making assemblies.

However, the then Soviet Union sent in a flotilla inclusive of a cruiser and several submarines. This caused the US Navy to withdraw allowing the Indian forces to liberate East Pakistan.

That is part of South Asia’s complex history why the countries of the region have refrained from the outright condemnation of Russia’s invasion of Ukraine, although they agree Russia’s actions goes against the accepted world order a webinar hosted by the Friedrich Naumann Foundation for Freedom (FNF) was toldon March 31.

The webinar entitled “The War in Ukraine and its implications in South Asia” drew speakers from India, Bangladesh and Sri Lanka as well as representatives from the German Bundestag (Federal Parliament.)

At the webinar Member of the Bundestag Dr Markus Faber called on the South Asian countries to support the stance taken by Germany and NATO against the Russian aggression. Faber, who is a member of the Defense Committee of the Bundestag asked the countries of South Asia to support the sanctions imposed on Russia and the security architecture that exists in the Indo-Pacific region.

“Democracies must support each other,” he said adding that democratic countries make more reliable allies as they are dependent on the support of the people.

Faber said that his country as well as the NATO alliance were phasing out dependence on Russian oil and gas and beefing up its defense spending.

For India, the biggest and most influential country in the region, the main concern was that the Western powers, the United States and the European Union taking a hostile position against Russia would change the world order.

“We are concerned that this war would weaken Russia, make it a Pygmy and drive it into the arms of the Chinese Dragon,” India’s former Ambassador to the Netherlands Bhaswati Mukherjee told the webinar.

India, the veteran diplomat said, considers China its biggest concern and this conflict may make the country’s contentious neighbor stronger. She pointed out that India is “anchored to the West” and isstrategically allied with the United States.

She says India “views with alarm at the possibility of Russia becoming weaker and weaker” due to the conflict and sanctionsand drawing closer to China.

“This will change the world order and it will leave India having to confront China alone.” She said after the Russian invasion of Ukraine India is concerned that China would attack Taiwan and also make incursions into the disputed Himalayan regions on the Indo-Chinese border.

She also pointed out that India remains dependent on Russia for armaments and spare parts for military hardware. Much of India’s fighter aircraft are Russian. It also needs Russian petroleum to come out of the Covid pandemic caused recession.

She also quoted from the writings of former US Secretary of State Henry Kissinger who had written in 2014 that “far too often the Ukrainian issue is posed as a showdown: whether Ukraine joins the East or the West. But if Ukraine is to survive and thrive, it must not be either side’s outpost against the other — it should function as a bridge between them.” She said she agrees with Kissinger although she has no admiration for him.

Moderator Saikat Dutta, Founding Partner of the think tank Deep Strat India,acknowledged the request made by Dr Faber for the South Asian democracies to support the West in isolating Russia, but he said that may be more complicated because of historical events.

Those events are specifically related to the 1971 conflict between India and Pakistan that eventually saw the birth of Bangladesh. Mukherjee said that in the case of India, it had found the former Soviet Union a reliably ally during that conflict with the then US backed Pakistan.

She recalled that when the Bangladeshi armed liberation movement, the Mukti Bahini were fighting the Pakistan Army with Indian military support to create Bangladesh in December 1971 the US sent the Seventh Fleet to the Bay of Bengal. It was a threatening move. However, a Soviet Naval Task Force comprising Cruisers and two submarines reached there first and after a tense standoff in December of that year the Americans withdrew.

At that time, Mukherjee said, Moscow gave the Indians a deadline to complete the mission. The primary issue was the fight for airspace and Indian Pilots flying Soviet-made MIG 21s fighter-bombers cratered the airfields in what was East Pakistan and declared air superiority in four days.

For the Bangladeshis also, the Russian connection is still strong ever since. Prof Lailufar Yasmin of Bangladesh’s Dhaka University said the incident is etched into the Bangladeshi psyche. In more recent times Bangladesh has also enteredinto technology partnerships with Russia, including the building of a Nuclear-powered electricity generating plant.

Yasmin agreed that that the world is not in a post-Second World War era, andcountries like Bangladesh have moved on and charted their own course. However, she pointed out that neutrality does not mean the country has no policy. She pointed out that Bangladesh does strongly believe that the sovereignty of a country is “sacrosanct”, and that aggression in the manner of Russia’s cannot be condoned.

Bangladesh has also improved economically and with a relatively large population of 170 million people is attracting investment from around the world, particularly Japan. The economic ties with China have also grown, she said.

In the case of Sri Lanka, which also along with India and Bangladesh did not vote against Russia at the UN Resolution condemning the invasion of Ukraine, a neutral stance has been a continuation of its foreign policy.

At the same time the US and the EU are the biggest markets for Sri Lanka’s exports, particularly apparel, but at the same time Russia continues to support Sri Lanka at international fora where resolutions have been proposed to punish Colombo’s record on Human Rights and alleged War Crimes.

Imran Furkan who was the Sri Lankan representative at the Webinar said that however Sri Lanka always stresses the importance of the Rule of Law as it is a very small country and keeping its independence and territorial integrity is of paramount importance.

Furkan, a management accountant who advises businesses in the Asia Pacific region, also said that Sri Lanka’s ties to the Soviet Union and thereafter Russia go back many decades with many Sri Lankans studying in Russian Universities on scholarships, particularly administrators and Civil Servants.

Mukherjee went on to say that while India is “firmly anchored” to the US and the West, it also has a relationship with Russia which cannot be broken. She said the West understands India’s position. She also said that in history the Russians have shown a lot of resilience in war, taking massive casualties in the battle of Leningrad for instance in WW2.

She also agreed with some Western commentators who have been critical of the “demonization” of Russian President Vladimir Putin saying that it was counterproductive.

Datta pointed out that in the case of the West it treats India differently when it comes to engagement with Pakistan and Afghanistan, while maintaining the closeness with India. “This is a duality that we need to understand and negotiate,” he added.

The webinar also discussed why the former Soviet Union and now Russia has engaged with South Asia. In response Prof Yasmin said “international relations are not conducted due to altruism. In international relations there is anarchy because each country is acting on its own interests.”

In the case of the Ukrainian refugee crisis, she said that Bangladesh has voted to support their plight, as it is battling the Rohingya refugee issue.

The Rohingya are a Muslim minority in Buddhist majority Myanmar who have fled their country in their millions to Bangladesh due to persecution by Myanmar’s military. “The reaction from South Asia to the current conflict is therefore very complex as it is very inter-connected,” she added.

China’s relations with the rest of South Asia have shown that it has been mostly a development partner. Prof Yasmin said that China had lent her country cash for infrastructural development, but Bangladesh has also receivedassistance from other countries such as Japan, the EU and the US.

In the case of Sri Lanka, Furkan said that Sri Lanka has a good record of balancing the powers around it but during the past ten years or so came closer to China. “China came with development aid after the (Civil) war ended in 2009,” he pointed out. Many new post-war infrastructure projects were completed with Chinese loans.

Furkan also said that the older generation of Sri Lankan leaders have a good impression of Russia. However, as this current war has broken out in the age of Social Media, the younger Sri Lankans would possibly not have such a favorable view of Russia as it is portrayed as aggression against a sovereign state, he said.

Yasmin and Furkan both concluded that in the case of Bangladesh and Sri Lanka as their exports go to the EU, the US and Japan it s vital that they keep good relations with the West, while retaining “strategic continuity and autonomy” in its dealings with Russia.

Moscow has been a long-standing partner to South Asian countries before and after the fall of the iron curtain on key defense, economic and energy-related issues; partnering with India, Bangladesh, Nepal, and Sri Lanka amongst others.
The ongoing invasion of Ukraine by Russia has wide-reaching geo-economic, geopolitical, and strategic implications for South Asia. The complicated balance of priorities for countries in South Asia has led to vastly muted reactions on the international diplomatic stage.
The session would cover these implications for countries in South Asia and the broader implications of the war in the wider Indo-Pacific region.

As a panel of experts opined recently, it is not that the region is lacking in natural and human resources, both skilled and unskilled, in the case of the latter category.

However, a common platform in terms of policy as well as change of attitude amongst the peoples is critical if South Asia is to attract manufacturers to set up shop in the region.

It’s time,observed the panel, that intra-regional capacities areleveraged to benefit South Asia as a whole.

Wansapriya Gunaseela, the Managing Director of Buildtek Consultants (pvt) Ltd., Sri Lanka,pointed out that even though the region’s labour force is primarily made up of youth, only about half of these young people are actively engaged in industry, therefore, it is important to motivate the other half.

The panel discussion on ‘Unlocking the Region’s Potential: Labour Mobility in South Asia’, held on September 20, was moderated by Waqar Rizvi, a Canadian-Pakistani TV Host and socio-political analyst.

Joining Gunaseela on the panel were Ms. Bhawani Rana, Chairperson of the Fortuna Group, Nepal and Mr. Asim Jamal, CEO of SANOFI, Pakistan. The webinar is part of the ‘Restart Asian Economies’ series organised by the Friedrich Naumann Foundation for Freedom (FNF), South Asia.

Gunaseela said that if South Asia is to effectively compete with other markets, it must increase productivity.

But first, the region must look at the different strengths and resources of neighbouring countries and build a common framework.

COVID 19, he said has increased dependence on digitalisation and automation, and South Asia must seize that opportunity to redesign training modules and upgrade skills, so that a five hundred member workforce would be able to do the work that is now carried out by a thousand workers.

Such improvements he said would result in increased productivity and higher wages for workers.

COVID 19, says Bhawani Rana, has brought many migrant workers back to their home countries. They are mostly skilled workers who have already been exposed to a work culture overseas. South Asia must act now to attract these and other members of the labour force to find employment within the region.

As she points out, though wages may not be equivalent to what workers may earn in foreign countries, awareness must be raised on the advantage of working closer to their homes and on the shared cultural practices and safety aspects of staying within the region. However, she stresses, if labour migration within the region is to be attractive, governments must introduce better and easier cross-border travel.

Says Jamal, the SAARC region is home to more than 20percent of the world’s population; they are mostly young, with good skills.They are comfortable moving between countries.

For decades, he says, there have been Pakistanis working in Bangladesh’s garment sector. It is the same with Sri Lankans.

Moreover, he cited examples from his own organisation where staff was sent from Pakistan to Bangladesh and India on a temporary basis to resolve various situations.

However, staff face issues around ease of movement, and they are also required to report to a police station throughout their stay, which, unfortunately takes up a good part of the day.

While SAARC has expressed the need for a common agenda, it is now up to the administrations of each country to begin a dialogue at all levels, he points out. Joint initiatives, he says, should open up opportunities for research and development in the field of pharmaceuticals, for instances; to make the region a centre of excellence.

Jamal also stated that the pandemic provided the perfect opportunity for South Asia to share their knowledge on vaccine production. Such an endeavour would have produced cost effective vaccines for the people of the region.

Retaining the workers, particularly the women in the region is key, says Rana.

“We need to develop a strategy by which the women workers do not go to the Middle East or West Asia. We need to emphasize the advantages of living and working closer to home. Connectivity among South Asian countries has improved there are many roads, highways, railway lines even sea lines.”

These are the advantages that should be showcased.

While making it attractive for South Asians to remain within the region, Jamal points out that the right of individuals to determine whether they should seek employment outside the region, such as in the Gulf nations must be recognised.

Echoing his co-panelists, Gunaseela says administrations must identify individualneedsand strengths, and irrespective of political differences introduce policies that will promote South Asia as the industrial ‘one stop shop.’

Cricket, he says is the common denominator that binds South Asians. Why, he asks, is that not reflected in building a common industrial agenda, opening doors for companies to hire the best in the trade from across the region.

Such a strategy would improve quality and standards, and pose a challenge to European businesses; in fact the sharing of resources and ease of movement should be the same as in the European Union.
Workers may however, consider employment overseas as opportunities to earn better wages in foreign currencies.

Says Rana, if the labour force is to remain within regional boarders they need to understand the value in that;in Nepal for instance the social security fund should be another attraction, apart from the safety factor.

Gunaseela adds, that especially the skilled and unskilled labour force see an opportunity of working long hours to remit money home, though they themselves would actually be left with only a small portion of their wages to survive on in a foreign land. That should be compared against the opportunity to live and work closer home.

To achieve all that policies on education too need a change, where vocational training or business studies are also given importance.

Most importantly, a change of attitude amongst South Asians is necessary; it is time to value products manufactured within the region, instead of believing that ‘foreign made’ goods are of higher standards.

As Gunaseela pointed out, garments and other goods sold in European and Western markets are produced in South Asia and meet those standards. Yet, South Asians continue to subscribe to the myth that goods produced in the region and available in the local market are sub-standard.

Private sector stakeholders obviously see the benefits of promoting regional cooperation in building a strong industrial hub in South Asia. They are ready to tap into the natural resources and the fairly substantial labour force to make this a reality.

However, for workers in South Asia to seek opportunities in neighboring countries would require the mutual lowering of barriers by the countries in the region to that type of migration. For millennia the peoples of these countries have traded their goods and interacted with each other.

Yet barriers, a throwback from Colonia rule, which mostly revolve around security concerns, competing political ideologies and historical reasons, continue to hamper strengthening of ties and building a common industrial agenda.

Other regional groups such as the European Union and the Association of South East Asian Nations are countries which warred against each other for centuries. Although there is still the occasional spat, and statements critical of neighbouring countries are made, on the practical matters of trade and mutual profit and advancement they show solidarity.

It is time that South Asia followed those examples.

Even as technological advancements were gradually introduced in schools, it had mostly been limited to better serviced cities, and to students of the financially better off schools. Certainly, using internet based learning for school goers was hardly on the cards.

The pandemic forced governments in South Asia to rely heavily on technology to deliver lessons to students, though the manner in which it was imparted has been less than satisfactory as a large number of children, especially from low- and middle-income families, and those living in underserved locations have been short-changed.

Now, even as educationists seriously look at hybrid-learning for the future, there is a rich discussion on what that should be.

As well, text book dependency may well be a thing of the past, where information can be accessed via the internet. In this context, Parit Wacharasindhu, CEO of Startdee, Thailand questions why students need to attend school at all.

Speaking at a webinar on “Hybrid Learning; The Future of Education” Wacharasindhu’s provocative question is indeed appropriate in these times. As he explains, it is not about doing away with schools, but that it is time society looks at the role a school plays, critically.

It is his contention that schools be transformed into places where students find out about themselves, their likes and dislikes and what they want to do with their lives.

Schools must become institutions that provide children job ready skills. They must be taught to be innovate, and not be in jobs, where technology could easily replace.

Wacharasindhu sees schools as the place where students will develop a social consciousness, be the
voices against corruption, not just commit to memory what text books say on corruption and regurgitate that to pass an exam, but be trained to be active citizens.

The webinar, organised by the Friedrich Nauman Foundation for Freedom(FNF) was held on September 17, as part of its Restart Education in South Asia, series.

Moderated by the CEO of the City Montessori Schools in India, Roshan Gandhi, the panel included Ms. Baela Raza Jamil, CEO ofIdara-e-Taleem-o-Aagah, Pakistan and Dr. Parth J Shah, Founder President, Centre for Civil Society, India.

The pandemic has thrown up some positives in terms of education, says Jamil, who described how many teachers in Pakistan, have, sometimes of their own accord and through private sector involvement upgraded their technological skills to better serve their students.

Governments must recognise such teachers she says, even as there must be more attention paid to those who struggle to master technological advancements.

Another plus, say both Jamil and Shah is the level of parental involvement in the education of their children. With long periods of lockdowns, and learning taking place largely at home, even the dads got involved says Shah.

It’s a paradigm shift, he says, to see even the extended family getting involved in the education of their children.

Despite all that, the panelists’ state more needs to be done, and governments especially must invest more in ensuring a level playing field for all school going children.

A survey carried out in March, Jamil states, revealed the inequalities of the system. While the financially better off students have full access to internet based education, the survey showed that was not the case in 16 rural districts.

Even if students have access to the internet, it’s about whether they are using their smart phones or laptops.

That is determined by household incomes and now, it is a digital divide between students.

Jamil says that though nearly 40per cent of the population live below the poverty line, there has been quite an increase in the hybrid learning curve, and some form of investment by parents to support this form of learning.

In both India and Pakistan, the most affected are children studying in budget private schools, which cater to the low and mid income levels groups.

These are parents who prefer not to enrol their children in State run schools, but, in a bid to provide their offspring a head start in life, admit them to more affordable private schools.

In some instances, parents have opted to remove children from school, hoping to re-enroll them when the situation improves.

Thailand is dogged by teacher shortages, with one teacher often having to teach several grades. Would hybrid learning then, open the way for teachers of general subjects to teach across several schools?

Having a structured 9 a.m. to 3 p.m. classroom setting may not be the way to go says

Wacharasindhu,pointing out that the method would require a lot of data usage. Governments should consider, through public private partnerships to subsidise the internet for this purpose he suggests.

However governments charge high taxes from mobile telephony and telecom companies pay astronomical fees to South Asian governments which push up the up front cost of infrastructure, as well as operating costs, analysts say.

In a March 2021 spectrum auction Indian telecom operators paid 778.4 billion rupees for 856 MHz frequencies, amid warnings that Indian mobile charges are likely to go up.

RELATED LINK: Why your mobile bills could go up by 25-pct in 2021

Hybrid learning opens up the possibility to do away with outmoded teaching methods and
beliefs, Wacharasindhu adds, saying that one option is to introduce educational videos which students could watch prior to ‘attending’class.

That would allow teachers to introduce more action based education in keeping with modern trends.

There is also the issue of ethics and trust where teachers would have to be satisfied that students have not uploaded answers obtained from other tech savvy tutors.

Edtech companies, Wacharasindhu points out will have to be more socially responsible in ensuring better learning outcomes and in providing access to technology. Jamil agrees, ‘teaching must go beyond text books, and the voices of students, parents and teachers must be accommodated.’

Shah who explains that teachers have undergone a revolution of sorts owing to the pandemic, and adapting themselves to new teaching methods, adds that they will also need to be more innovative in ‘disciplining’ students.

It should be more about motivating students, he opines.

Just as webinars have replaced physical meetings in other sectors, teachers too now have the opportunity of consulting with colleagues not just across the country, but globally to keep abreast of trends, Shah points out.

Edtech companies must, says Jamil be sensitive to income needs of families and design models accessible to everyone. This pandemic has shown, that even in rural households there has been some investment in technology to help children with their studies.

In turn, schools too must take into account the realities of their student populations she adds, while Shah explains that the ‘one size fits all’ is not the way to design hybrid education.

Though countries such as Pakistan had introduced a dedicated TV channel for students, and a distance learning web, Jamil would like to see better financial commitment from governments. The government is working with Edtechs and talks of innovation funds, yet, she says there is not real financial commitment to support these plans.

Despite the disastrous setbacks brought upon by the pandemic, in the educational sector, it has opened up the space for change. Panelists agree that the ‘COVID Dividend’ must be exploited, to change mindsets, to close the gap between public and private schools, especially the less financially viable ones so students of all income levels have the same access to education.

As Jamil explains, it is time for governments to adopt a rolling policy on education which will be open to growth and changes and include all the voices of all stakeholders.

The rating agency said tax revenues had fallen further than initially expected and debt had increased during the Coronavirus pandemic, and deficits are likely to be high in the near term with more commercial borrowings.

“The rating also reflects Moody’s expectations that, even with a robust rebound in tourism arrivals in the coming quarters, the debt burden will only gradually decline on expectations that the government will maintain an expansionary, investment-driven fiscal policy that will repeatedly test the government’s access to a diverse set of funding sources,” the rating agency said.

Maldives had got into trouble partly with Chinese debt funded infrastructure and market borrowings which were more accessible in the last decade as the US engaged in ‘quantity easing’.

“The change in the outlook to stable indicates that risks to the Caa1 rating are balanced between these ongoing fiscal pressures with recent positive developments, namely the strengthening prospects of the tourism sector, which will support recoveries in growth and employment.”

Maldives had a successful tax system based on a tourism bed tax which was abolished under Western pressure and replaced with income tax, based on Western socialist ideas such as ‘tax-the-rich’ and ‘income equality’, but can devastate state revenues in a downturn and also makes compliance difficult critic say.

The full statement is reproduced below

Moody’s downgrades Maldives’ rating to Caa1, changes outlook to stable

Singapore, August 17, 2021 — Moody’s Investors Service (“Moody’s”) has today downgraded the Government of Maldives long-term local and foreign currency issuer and long-term foreign currency senior unsecured ratings to Caa1 from B3, while changing the outlook to stable from negative.

Moody’s has concurrently downgraded the backed senior unsecured rating for Maldives Sukuk Issuance Limited to Caa1 from B3.

The entity is a special purpose vehicle that is wholly-owned by the Ministry of Finance on behalf of the Government of Maldives and whose debt and trust certificate issuances are, in Moody’s view, ultimately the obligation of the Government of Maldives.

The downgrade to Caa1 reflects the deterioration of fiscal strength beyond Moody’s initial expectations, stemming from the significant increase in the debt burden during the coronavirus pandemic, the prospect for large fiscal deficits in the coming years, and over time, the risk of higher interest costs associated with the debt burden and greater commercial borrowing.

The rating also reflects Moody’s expectations that, even with a robust rebound in tourism arrivals in the coming quarters, the debt burden will only gradually decline on expectations that the government will maintain an expansionary, investment-driven fiscal policy that will repeatedly test the government’s access to a diverse set of funding sources.

The change in the outlook to stable indicates that risks to the Caa1 rating are balanced between these ongoing fiscal pressures with recent positive developments, namely the strengthening prospects of the tourism sector, which will support recoveries in growth and employment.

The recent refinancing of the Eurobond maturing in 2022 by a sukuk issuance maturing in 2026 and improved foreign exchange liquidity due to the tourism recovery and bilateral support from China, India and others have also mitigated external liquidity risks.

Concurrent to today’s action, Maldives’ local-currency ceiling is lowered to B1 from Ba3 and reflects the government’s relatively small footprint in key sectors of the economy, including tourism, balanced against weak institutions, an unpredictable policy framework, and large external deficits driven by the archipelago’s dependence on goods imports. The foreign currency ceiling is lowered to B3 from B2, underscoring the risks of convertibility restrictions during times of external liquidity stress, particularly to preserve reserve adequacy backing the country’s fixed exchange rate.

RATINGS RATIONALE

RATIONALE FOR THE DOWNGRADE TO Caa1

AFTER SURGING FROM IMPACT OF PANDEMIC, HIGHER DEBT LEVELS WILL ONLY DECLINE GRADUALLY

Maldives’ fiscal metrics have deteriorated sharply over the course of the coronavirus pandemic, which resulted in a 32% contraction in real economic output in 2020 following the closure of borders to tourism from March to July 2020. Although government revenues were resilient, remaining stable at around 27% of GDP in 2020, expenditures expanded to 50% of GDP from 33% in 2019, driven by coronavirus-related relief and continued investment. As a result, Maldives’ debt level rose to double the median of B3- and Caa1-rated peers at 121% of GDP in 2020 from 63% in 2019.

Despite a forecasted rebound in GDP growth to 19% in 2021 and 14% in 2022 as the tourism sector recovers, Moody’s expects the debt burden to moderate only gradually from 117% of GDP in 2021 to 107% of GDP by 2024, under the expectation of continued large, investment-driven fiscal deficits over the medium term.

The fiscal deficit is likely to remain near or above 10% of GDP through 2023, driven in large part by externally funded capital investment projects such as the upgrade to Velana International Airport, road and bridge construction, and other improvements to water infrastructure, health and public housing. The government is also likely to continue investing in infrastructure to improve resilience to the effects of climate change, including rising sea levels. These projects, while additive to the country’s productive capacity, are likely to drive sustained levels of external borrowing.

Fiscal consolidation will be highly contingent on further recovery of the tourism sector, which accounts for approximately 60% of GDP including indirect activities and 30% of government revenue. Although revenues have remained stable as a percent of GDP, debt to revenue surged to 444% in 2020 from 234% in 2019. Moody’s expects this ratio to remain above 400% through 2023, despite baseline expectations of a steady return to pre-pandemic tourism volume within that timeframe. Reopening of the sector is progressing well in Maldives in comparison to many tourism-dependent sovereigns where borders remain closed to leisure travelers, but the sector’s continued recovery will also be conditional upon public health conditions in major source markets including India, Russia, China and Western Europe.

DEBT AFFORDABILITY TO WEAKEN, WITH GREATER EXPOSURE TO MARKET CONDITIONS

While the bulk of external public debt (36% of GDP in 2020) is financed through concessional sources, Moody’s expects a growing portion of future financing needs to come from commercial sources at higher cost. Moody’s assesses that the Maldives will sustain market access, bolstered by the issuance earlier in 2021 of a $200 million sukuk followed by a $100 million tap issuance on the same instrument. However, the higher cost of this borrowing is likely to increase debt service costs, particularly those in foreign currency.

Moody’s forecasts the share of foreign currency denominated debt in Maldives’ larger debt stock to stabilize around 44% over the medium term, higher than 41% before the pandemic, helping to drive the rise in interest payments as a share of revenue to more than 14% in 2022 and to nearly 15% by 2025, compared with nearly 7% in 2019. Foreign currency-denominated interest payments are forecast to increase to 5.4% of total revenue by 2024 from 2.2% prior to the pandemic.

Control on debt affordability will hinge on Maldives’ continued access to low-cost sources of borrowing, including from bilateral and multilateral lenders as well as local sources including the banking system. Moody’s expects ongoing engagement with multilateral development banks to facilitate disbursements for project finance and budget support, including through the forthcoming World Bank Country Partnership Framework for the next four years, although remaining institutional constraints may limit the capacity of such lenders to fully support Maldives’ forecasted financing needs.

RATIONALE FOR THE STABLE OUTLOOK

ON-GOING TOURISM RECOVERY WILL SUPPORT GROWTH AND FOREIGN EXCHANGE LIQUIDITY

Following the closure of borders in 2020, Maldives opened borders to a gradual recovery in tourism, driven by advantageous factors including its unique “one island, one resort” geographic profile and its broad vaccination coverage of the domestic population, with more than 60% at least partially vaccinated as of mid-August 2021. The authorities have also implemented a testing and quarantine requirement for all visitors to guard against imported infection cases. Through July 2021, visitor arrivals to Maldives have already surpassed the level achieved in 2020 and are likely to reach 1.1 million visitors by year’s end, or approximately 65% of pre-pandemic levels.

Moreover, the average number of nights per stay in 2021, as of early August, has increased nearly 40% from 2019 levels, suggesting a faster recovery in resort revenue than visitor arrivals alone suggest. Other metrics including bed capacity and the number of operating resorts indicate limited scarring of the tourism sector.

Moody’s expects broad vaccination in the country to support the ongoing increase in tourism arrivals, reducing downside risks to growth and government revenue in the coming months.

Furthermore, in contrast to other tourism-dependent sovereigns in the Asia Pacific region, the Maldivian authorities are unlikely to impose another full-scale lockdown or border closure, assuming currently available vaccines protect against the prevalent variants of the coronavirus.

Moody’s forecasts annual visitor arrivals to recover to pre-pandemic levels by 2023, helping to drive average real GDP growth of 12% over 2021-2024.

Downside risks to these forecasts stem from uncertain public health conditions in Europe, Russia, India and China, which have been Maldives’ largest source markets for tourism.

For example, the surge in infections in India in the April and May 2021 period led to a decline in tourist arrivals during those months after several months of accelerating arrivals. Moody’s expects Maldives to address these spikes in infections in specific jurisdictions by restricting arrivals or requiring more stringent testing or quarantine requirements on a case-by-case basis.

RECENT REFINANCING AND IMPROVING TOURISM FLOWS WILL MITIGATE LIQUIDITY PRESSURES

The government’s issuance of a $200 million five-year sukuk in March 2021 and subsequent $100 million tap issuance in April alleviated immediate refinancing pressures with the proceeds used to buy back the bulk of its $250 million Eurobond maturing in June 2022 through a tender offer, mitigating a significant source of credit pressure in the near term. Approximately 77%, or $192 million, of the outstanding Eurobond was effectively refinanced to 2026, leaving just $58 million to be repaid in June 2022.

The sukuk helped to diversify Maldives’ investor base and successfully reduced potentially disruptive rollover risk in 2022. The refinancing also reduced the balance that the government plans to draw from the Sovereign Development Fund (SDF) to $58 million from $250 million. The SDF was established specifically to earmark foreign exchange earnings received from tourism-related taxes and fees to amortize the Eurobond at maturity. Moody’s now expects the SDF to comfortably service the remaining Eurobond principal in full, reducing the risk to available foreign exchange reserves.

Moreover, an improvement in tourist arrival volume will help replenish the SDF balance over time and provide liquidity for external debt service through 2026. An active foreign currency swap line with the Reserve Bank of India has also provided a foreign exchange buffer; this access is due to expire at the end of 2021 but may be renewed.

 
Even with immediate liquidity risks easing, they remain high and contingent upon Maldives’ ability to tap international markets and attract loans and grants from bilateral and multilateral creditors, as Moody’s expects external commercial borrowing to remain a core component of the government’s borrowing strategy.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

Maldives’ ESG Credit Impact Score is highly negative (CIS-4) and reflects very high exposure to environmental and social risks. While governance generally remains weak, particularly with regards to fiscal management, recent improvements have been made in the areas of control of corruption and institutional reforms.

Maldives’ exposure to environmental risks is very highly negative (E-5). Environmental considerations continue to threaten lives and livelihoods. With its average ground level elevation being only less than five feet above sea level, Maldives is acutely vulnerable to climate change. Maldives also faces the threat of increasing temperatures, including more frequent extreme weather events, changes in monsoon patterns and coral bleaching.

The government’s approach to improving the archipelago’s resilience to climate change has been to retain and enhance islands’ existing natural flood protection features, strengthen emergency responsiveness, carry out conservation efforts and invest in research capacity. The government is also investing in large land reclamation projects such as the construction of Hulhumalé island to relocate populations most vulnerable to sea level rise. Carbon transition risks are negligible, while Maldives’ natural capital of the archipelago, despite a source of economic concentration, continues to drive its globally competitive tourism industry.

Maldives’ exposure to social risks is highly negative (S-4). Given the small and dispersed population, demographic challenges are also a prevalent concern, manifested in a dearth of skilled labor and technical capacity. According to UNICEF, large wealth gaps also exist between Malé and the atolls. Compounded with inclusion issues, this contributes to relatively elevated levels of youth unemployment and low rates of female labor force participation.

The government continues to invest in building housing developments, as well as improving educational opportunities and outcomes. Access to basic services remains limited outside of the capital city, while health & safety considerations, including mortality rates and levels of undernourishment, are relatively elevated.

Maldives’ institutions and governance profile constrains its rating, as captured by a highly negative governance issuer profile score (G-4). Our assessment considers challenges with respect to fiscal management, although improvements have been made with respect to improving fiscal transparency and increasing budget accountability. Moreover, some progress has been made in addressing other governance issues, including corruption. Tackling financial crimes and money laundering remains a concern.

GDP per capita (PPP basis, US$): 19,609 (2020 Actual) (also known as Per Capita Income)
Real GDP growth (% change): -32.0% (2020 Actual) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): -1.3% (2020 Actual)
Gen. Gov. Financial Balance/GDP: -22.8% (2020 Actual) (also known as Fiscal Balance)
Current Account Balance/GDP: -30.0% (2020 Estimates) (also known as External Balance)
External debt/GDP: 97.7% (2020 Estimates)

Economic resiliency: b1

Default history: No default events (on bonds or loans) have been recorded since 1983.
On 11 August 2021, a rating committee was called to discuss the rating of the Maldives, Government of. The main points raised during the discussion were: The issuer’s economic fundamentals, including its economic strength, have not materially changed. The issuer’s institutions and governance strength, have not materially changed. The issuer’s fiscal or financial strength, including its debt profile, has materially decreased. The issuer’s susceptibility to event risks has not materially changed.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT COULD LEAD TO AN UPGRADE

Moody’s would likely upgrade the rating in the event of a sustained improvement in the fiscal trajectory that leads to a significant consolidation of debt and deficit levels, thereby reducing government borrowing requirements and easing liquidity risks and improving the cost of borrowing.

Greater certainty over multilateral financing flows from a variety of lenders at affordable rates that cover the sovereign’s funding needs durably would also support the credit profile. Such an outcome, combined with steps towards improving public financial management, would improve visibility and planning around the government’s borrowing requirements.

Progress toward economic diversification that reduces the sovereign’s reliance on tourism inflows and establishes new drivers of growth that support the development of human capital would also be credit positive.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Moody’s would likely downgrade the rating in the event of a more pronounced deterioration in fiscal and/or external metrics beyond our baseline assumption, including evidence of the government’s weakened ability to secure external financing.

Moreover, a more protracted and prolonged period of weaker tourism activity, leading to more severe impacts on government revenue and foreign exchange earnings, would further threaten macroeconomic stability and likely lead to a downgrade of the rating.

While not Moody’s current expectation, indications that the government is likely to participate in debt relief initiatives which we conclude is likely to entail losses for private sector creditors would be negative for the rating.

The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1158631. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

The outlook on the sovereign rating is negative.

US dollar-denominated trust certificates (sukuk) issuance by the Government of Maldives (“Maldives”) will be made through Maldives Sukuk Issuance Limited, a special purpose vehicle, which is wholly-owned by the Ministry of Finance.

“Proceeds from the sukuk issuance will be utilized in part to fund a tender offer, which has been announced concurrently with the new issue and is conditional on the offering, on the Government’s outstanding bonds maturing in June 2022,” Moody’s said.

“The remainder of the proceeds from the sukuk issuance would fund development projects in Maldives.

“The assigned rating to the sukuk mirrors the Government of Maldives’ current issuer rating. According to the terms and conditions available to Moody’s, the trust certificates will constitute direct, unconditional and unsubordinated obligations of the Government of Maldives.”

Moody’s said the Coronavirus pandemic had slowed the tourism dependent economy, but it had healthy growth prospects.

Foreign borrowings had also created a current account deficit. China had becoming a top creditor of Maldives, rapidly driving up its foreign debt.

The Maldives Monetary Authority is also less activist which has given the island superior monetary stability compared to other South Asian nations helping the country achieve strong and stable growth and higher living standards.

The Rufiyaa had only fallen to 15 since independence compared to 200 to the dollar in Sri Lanka. Currencies of South Asia including in Nepal, Sri Lanka, and Pakistan are based on the British era rupee which around 4.77 when the Bretton Woods system was set up. (Colombo/Mar27/2021)

For one, it was a year (2020) that produced better tea than previous years explained Rudra Chatterjee, Managing Director of Luxmi Teas of India. That was certainly a challenge, given that approval for the products actually took place, not by being at the location and tasting the teas, but by viewing photos, he added.

Chatterjee was speaking at the Restart Asian Economies series organized by the Friedrich Naumann Foundation for Freedom (FNF) South Asia, which discussed ‘Ideas and Actions for the Tea Industry.’ The on-line discussion held on March 15th included the CEO of Dilmah Tea from Sri Lanka, Dilhan C Fernando, and was moderated by Subodh K Agarawal, Consultant, Friedrich Naumann Foundation for Freedom, South Asia (FNF).

Faced with lockdowns introduced to contain the spread of the coronavirus, said Chatterjee, gave them the opportunity to reach out to their customers and loyal friends and to recognise that tea is a large industry in terms of people, on whom the growers are dependent. The lockdown meant that in the first few months there was no production, and by the time restrictions were eased, most of the second pluck too had been flushed out.

He said that in terms of production there had been about a 15 per cent drop, yet morale was kept up with management which remained on the plantations having regular meetings with workers and the excellent programme put in by the government. Since India had already introduced payment of wages through technology that had not been an issue.

Like in India, production had not been affected in Sri Lanka according to Dilhan Fernando. With excellent collaboration with the government, health services, public health inspectors and technology ‘we rode the wave’ he said. However, the challenge was to get the product to the factories and keeping those operational.

Both Dilmah and Luxmi are committed to upholding the quality of their brands, and both Fernando and Chatterjee claimed that the larger issue is fighting the mediocre varieties of tea available on the market. Dilmah, says Fernando is committed to the purity of the product and environment and social sustainability, yet when consumers are unable to tell the difference between high and low-quality teas and are enticed by the various deals offered, they end up purchasing teas that are of the lower quality. That means pricing he points out, adding that price will also determine whether they could be in the frontline to battle climate change and social inequalities.

Tea, he explained has all the anti-oxidants to ensure wellness, but must compete with the many products that are marketed as being good for the health “Consumers move to teas that are not teas,’ Fernando states, adding that it is only through education that the industry could make sure that consumers know what they are buying. Here, the Dilmah School of Tea plays an important role in ensuring tea drinkers are discerning consumers. To date, says Fernando, around 10,000 have been educated on the finer points of tea, though irresponsible marketing of lesser quality teas remains a challenge. It’s not only about learning to brew a good cup of tea but being aware of its properties which act against cancer, dementia, stroke etc.

With more online shopping says Chatterjee, consumers are getting better at learning about the product, the varieties available and how the taste and aroma vary from region to region. Indeed, as they explained the taste could differ from teas that come from the same plantation, but different sections. When consumers acquire a better knowledge of the beverage, it would be that much more difficult to market a brand that comes for instance with a free spoon as against ‘I enjoy second flush tea,’ statement. It is, he says competition between the commodification of the product and the romance and nuance of tea.

Tea, says Fernando, demands that one knows its characteristics and varieties. Responding to a question on tea versus coffee, he states that the competition is not between the two beverages but a contest against all the beverages out there. Dilmah sells tea in Italy, he says, where following the morning cup of coffee, consumers look for tea and infusions as the day progresses. Adds Chatterjee, variants of the brew such as black, white, tea with spice or milk tea have been in the market for years before the advent of lattes and cappuccinos. What’s more, as Chatterjee describes the preferences of how tea is prepared and consumed too differs from region to region.

Growers are also dealing with the immediate issue of getting their product to the global market. A shortage of containers and congested ports across the world has made keeping track of their shipments difficult. In some instances explains Fernando, containers are kept in yards outside the ports.

There is also the issue of increased supply and more lands being put under tea cultivation, which, says Chatterjee contributes to climate change. Illegal deforestation in Assam for instance has increased land under tea cultivation, but with no respect for the environment resulting in flooding etc.

For the first time in the history of the tea industry in Sri Lanka, tea auctions were held on-line, during the lockdown. Fernando states that experience helped the sector stay afloat and also provided an avenue for smallholders to sell their product. However, there is a long way to go, he cautions. “It’s a work in progress requiring a more holistic approach and ensuring traceability etc.”

Specific challenges on the ground in Sri Lanka are the demand for better wages and making the industry more attractive for younger persons. Acknowledging the right of plantation workers to better wages, Fernando explains the challenge is in securing the right market price, which would then ensure not only better wages but also allow for other improvements in the sector. In terms of retaining younger workers, it involves bringing a human touch into the industry by addressing specific issues such as feminine hygiene, nutrition and alcoholism. Space must be created for the youth too to become entrepreneurs. These are challenging issues, he states, but those that must be addressed.

When customers begin to seek better products instead of succumbing to blanket marketing and choose teas that are produced ethically, through fair trade etc. better sustainability of the industry could be ensured, says Chatterjee.

Though consumed around the world, there seems to be low penetration of regional products within the South Asian market, and that could be overcome says Chatterjee through promoting ‘our own traditions, just like Early Gray and the English Breakfast, and going global with it.’ Promoting the very different ways tea is taken, just within India for instance where it changes from region to region; one region prefers more milk in the tea, another takes masala tea or the roadside cup of tea with lemon enjoyed in Kolkata.

Both agree that regional collaboration, where South Asia could be the hub has the potential of developing standards and promoting sustainability, health and safety and protecting the worker and the environment.

And perhaps Tea could be the panacea needed to build South Asian relations! Like cricket and similar food preferences, they point out, tea also is a common factor that binds South Asians.

What better way than to resolve any issues over a cup of tea!
(Colombo, March 23, 2021)

The Sri Lankan Prime Minister’s office in a statement said that both countries agreed that there was a need for them to look for markets within the region without having to look outside South Asia.

The two countries proposed that cooperation in the tourism sector would help both nations and that more direct flights should be initiated in order to facilitate these links.

Mutual assistance in combatting drug smuggling and human trafficking was also proposed as well as closer business links.

The Bangladeshi PM also invited more Sri Lankan students to enter Bangladeshi universities and offered to share their experience in agriculture and freshwater fishery.

The Bangladeshi Prime Minister also accepted Sri Lanka’s invitation to visit Colombo in 2022 to celebrate the 50th anniversary of formal diplomatic relations between the two countries, the statement said. (Colombo, March 20, 2021)

Reported by Arjuna Ranawana

An athlete and entrepreneur, Goli has called the swim an “Indo-Lanka friendship event,” and this is the second time she has completed a 30 km open water swim.

Goli was quoted by Indian media as saying that she strongly believes that her crossing the Palk Strait “will be an achievement for the whole of womanhood and hopes that this would inspire women to aim higher and believe that nothing is impossible.”

Goli represented Telangana in the 2020 FINA World Masters Championship in Gwanju, South Korea. In Nov 2020, she swam a 30 km stretch in the Great Ganges River in Patna and secured 6th position with a timing of 110 minutes.

She is also an animation film producer, director and writer and started swimming only four years ago. She has been preparing for the Palk Strait Swimming Expedition under the guidance of her coach Ayush Yadav at SATS swimming pool in Gachibowli (Hyderabad), a statement from the Indian High Commission said.

India’s Mihir Sen in 1966 was the first in the world to successfully swim across the Palk Strait. Sri Lankan multiple Guinness record holder Kumar Anandan swam the Palk Strait both ways in 51 hours in 1971. Anandan died of hypothermia attempting to swim across the English Channel in 1984. India’s National Swimmer Bula Chaudhary in 2004 was the first woman to swim across successfully. (Colombo, March 20, 2021)

Reported by Arjuna Ranawana

Prime Minister Rajapaksa was speaking last night at a formal dinner after events celebrating the birth centenary of Bangladesh’s founder Sheikh Mujibur Rahman in Dhaka. The dinner was hosted by Bangladesh PM Sheikh Hasina Wazed, the daughter of the founder.

The Sri Lankan leader also said his country will stand “side by side with Bangladesh to achieve greater freedom and prosperity said that objectives of economic transformation, poverty eradication and achieving the Sustainable Development Goals remain key priorities in the middle of great challenges for the two nations.”

“As a neighbour and a close friend, Sri Lanka stands side by side with Bangladesh to achieve greater freedom and prosperity”, he said.

In reply, Sheikh Hasina said, “Bangladesh and Sri Lanka share similar positions on various regional and international issues, while both the countries used to cooperate and support each other’s causes.”

She called the Sri Lankan Prime Minister “a true friend of Bangladesh, and he has always stood by our side. I also try my level best to reciprocate with that friendly gesture.”

The Sri Lankan Prime Minister had several bilateral meetings yesterday including one with the Foreign Minister of the host country. He is also due to meet the head of the Central Bank. (Colombo, March 20, 2021)

Reported by Arjuna Ranawana

Premier Rajapaksa who arrived in the Bangladeshi capital Dhaka this morning was welcomed at the Dhaka airport by Bangladeshi Prime Minister Sheikh Hasina, the daughter of Mujibur Rahman.

After the airport reception, the Sri Lankan Prime Minister travelled to the National Martyr’s memorial erected in 1982 to remember the Bangladeshis who died in the war of independence.

Rajapaksa paid his respects at the monument and also planted a sapling of “Brownea coccinea” at the venue to mark his visit.

The PM delivered the following message at the memorial. “This indeed is a moving experience to pay my respects at the National Martyr’s Memorial to the memory of those who sacrificed their valued lives during the Bangladesh War of Independence. All those who cherished Independence sacrificed their today for a tomorrow to all Bangali people which is a powerful testament to Bangabandhu’s dream for a free, independent, and proud Bangladesh.”

In the afternoon, Prime Minister Rajapaksa’s official engagements include meetings with the Foreign Minister of Bangladesh and the Governor of Bangladesh Bank.

In the evening, the Prime Minister will be the guest of honour at an event to celebrate the birth centenary of the founder of Bangladesh, Bangabandhu Sheikh Mujibur Rahman, and the golden jubilee of Bangladesh’s independence. (Colombo, March 18, 2021)

Reported by Arjuna Ranawana

Rajapaksa left the country early this morning and is due to hold bilateral meetings with the Bangladeshi Prime Minister Sheikh Hasina as well as several Ministers, the Chairman of the Bangladeshi Central Bank and other officials, a press release issued by the PM’s office said.

Sri Lanka and Bangladesh are due to sign several bilateral agreements during the two-day visit, the release added.

(Colombo March 19, 2021)

Reported by Arjuna Ranawana

The current Sri Lankan government is targeting a 70percent contribution from renewable energy to the National Grid by 2030, says Lakmal Fernando, Director/CEO of Regen Renewables Pvt. Ltd. Right now that contribution is less than 40%.

Fernando was speaking at a webinar organised by the Friedrich Naumann Foundation (FNF) South Asia, on ‘Ideas and Actions for the Renewable Energy Sector’ in its Restart Asian Economies series, on January 28th. He was joined by Nawa Raj Dhakal, the Deputy Executive Director of Alternative Energy Promotion (AEPC), Nepal. The session was moderated by FNF’s Country Representative in Bangladesh, Dr Najmul Hossain.

It has not been very long since Sri Lanka has taken note of its unlimited access to sun, wind, water as well as biomass, as potential energy providers, which could reduce if not completely replace dependency on costly fossil fuels in the production of electricity. However, research indicates that tea plantation companies had invested in mini-hydro plants as long ago as the early 20th century.

Meanwhile, over a period of ten years or so, says Fernando, Sri Lanka has had a slight shift towards complementing the country’s energy production through ground-mounted and rooftop solar panel installations.

The bulk of the 325MW production of solar energy, however, has been achieved only since the latter part of 2016, facilitated by government initiatives such as net accounting and net plus metering systems. Such schemes encourage consumers, now referred to as ‘prosumers’, to use solar to generate electricity on their own premises while either being paid for extra energy generated or for all of the energy provided to the grid, depending on the scheme selected.

The Battle for Energy (Soorya Bala Sangramaya) for instance, introduced about 4 years ago hoped to add 200MW to the national grid by 2020, and a 1000MW by 2025, through the installation of small-scale rooftop solar panels on hotels, commercial establishments, households and religious places.

Reaching the government’s 70% target would require the production of around 4.6 MW, in the next ten years, and that is an ‘uphill task,’ explains Fernando. He is optimistic, however, that if a million of the 6.5 million houses could be harnessed to produce 2 to 3 kw of solar energy each, 3GW could be connected to the national grid.

He points out that the rest of the shortfall could be met through ground-mounted solar power generators as well as wind power. While the Asian Development Bank provided a USD50 million loan in 2017 to fund rooftop solar energy production, Fernando states that the sector has also received a boost from local banks which have reduced their interest rates on loans to a single-digit.

Furthermore, the government is committed to re-commissioning 7000 rural transformers.

Meanwhile in Nepal, the introduction of a new constitution in 2015 and the resultant three tiers of government, Federal, Provincial and Local is paving the way for the generation of renewable energy locally, says Dhakal.

A country that generates a bulk of its energy through hydro projects, Nepal’s installed capacity is currently at 1430 MW, but experiences a 40% drop in production during dry seasons, explains Dhakal. Electrification of homes is mostly in urban areas and through the grid. The Nepali government has, in recent years been promoting the use of natural energy to further expand electrification of the country. While solar is not a widely used medium, min hydro projects are gaining ground according to Dhakal. Of course, Nepal, he points out, is blessed with ample hydro resources, making it possible for the production of run-of-the-river hydroelectricity. The current focus, he explains, is to popularise off-grid production of electricity for use in rural and suburban areas.

The Nepali government is targeting an expansion in the installed capacity to 5000MW by 2023 and 15,000 MW by 2030.

According to Dhakal, Nepal hopes to see an increase in annual electricity consumption from the current 260kw per capita to 750kw by 2023 and 1500 kW by 2030.

While the Nepali government is committed to giving up to 60per cent in subsidies for the initial investment of schemes designed for off-grid production of energy, it is providing the technical know-how and evolving policies around ‘take and pay’ plans etc. for companies involved in energy production for the grid. These supports also include getting environmental and other clearances from multiple government ministries to make things more realistic and time-bound.

The mini energy production schemes promoted in local government areas says Dhakal are geared towards socio-economic development of local areas. Schemes designed along with co-operative models or through IPP’s involve the setting up of local business and economic centres as well as academic and health-related institutions, which while creating a demand for more energy would also bring about more employment opportunities.

In Sri Lanka, the unit cost for coal-based electricity is LKR. 9.35, while a unit of Liquified Natural Gas(LNG) is LKR14.50 and a diesel powered unit is anything between LKR25 to 50. Solar and wind production, says Fernando is available at LKR8 to 10. Nepal meanwhile, says Dhakal, where production is heavily dependent on its rainfall patterns charges Nepali Rs. 8.40 per unit for hydroelectricity during the dry months and Rs. 4.80 in the wet months of the year. Solar and wind-powered energy costs Nepali Rs. 7.30 per unit.

While a stable grid is essential to absorb the renewable energy that is connected, Fernando points to delays in obtaining approvals and the depreciation of the rupee against the dollar as the greatest challenges private companies must deal with. Tariffs agreed with the utility provider, are usually tagged to the dollar, and will apply for at least ten years, he says. However, by the time the approvals are obtained and raw materials, of which nearly 75percent for both solar and wind are imported, the costings for both supplier and consumer changes. It is necessary, therefore, he says that both suppliers and consumers lobby government to streamline the approval process. The Central Electricity Board (CEB) controls the production and distribution of electricity, and regulations for renewable energy production are applied differently from area to area. When approvals take years, and costs then increase by 15 to 20percent, the project becomes untenable, and, if the current government is committed to ensuring its 70percent target is met, then it must be pro-active in streamlining the necessary processes, says Fernando.

While Foreign Direct Investment (FDI) has not caught on very much in the energy sector in Nepal, dollar PPA’s are allowed, says Dhakal who explains that the Nepali government is very keen to expand both domestic energy usage while also pursuing bi-lateral and multi-lateral agreements with neighbouring countries.

Nepal, which until three years ago experienced severe power shortages, now has the potential of producing 83,000MW of hydro energy. . Domestic consumption, says Dhakal is projected to be around 10,000MW by 2030 with about 5000 MW available for export. Being a signatory to both the South Asian Association of Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) initiatives towards trading in electricity amongst member countries, Nepal is actively pursuing such trade agreements with India, Bangladesh, Bhutan etc., says Dhakal.

He points out, however, that for such agreements to be viable the production quality must be satisfactory and partnerships should go beyond government to government co-operation to include the private sector. India for instance is moving fast in developing solar and wind power, which could be enhanced with hydro energy contributions from Nepal.

There have also been talks on setting up a South Asian regional grid to further enhance energy sharing between member States. Says Fernando, while such initiatives are welcome, agreements must ensure equity and transparency, without which, smaller countries such as Sri Lanka could get ‘sandwiched between giants and not enjoy the benefits of such a setup.’ Discussions between India and Sri Lanka have been ongoing for quite some time in this regard, he says, adding that FNF could play a role in educating the people on the advantages of inter-regional energy connectivity and also ensuring grid stability.

Despite there being 6.5 million households, Fernando says only 28,000 have opted to move to solar energy usage. More awareness amongst the people on the benefits of renewable energy is needed, he notes, where unlike Nepal, the subject has been included, albeit as only a chapter, even in a school textbook. Sri Lanka offers university-level courses, and in Nepal too, renewable energy is studied by students in the Humanities and Engineering fields. Nepal has also included it in its technical and vocational education training programme.

While promoting renewable energy would open up more employment opportunities, Fernando is hopeful that there will be a push towards educating the young in Sri Lanka on the importance and benefits of moving towards renewable energy options. Children, he says can be the influencers if introduced to the subject early in life, and, if like some other countries subsidies are provided to persuade the public to switch to alternate forms of energy and clear regulatory frameworks are implemented, with time, Sri Lanka too could reduce its dependence on costly fossil-based fuels. (Colombo, February 4, 2021)

Reported by Kshama Ranawana