The Supreme Court has decided to fast-track the legal process for cases involving unpaid loans and resolve disputes within six months, President Abdulla Yameen revealed today.
Speaking at a groundbreaking ceremony this morning for a tertiary hospital to be built in Hulhumalé, President Yameen said numerous cases involving unpaid loans provided by “financial intermediaries” such as banks, insurance companies, and leasing companies remain stalled at court for long periods, resulting in a credit crunch or reduced lending to businesses.
“Money in the bank will be needed by investors and corporate leaders. If loans issued by banks are not repaid there will be difficulties in issuing further loans,” he said.
As a result of protracted legal processes, he added, banks will also find “corporate inter-bank lending” difficult due to non-performing loans or bad debt.
The appeals process takes years in most cases involving unpaid loans.
Yameen said the government took the initiative and held discussions with Chief Justice Abdulla Saeed, who agreed to expedite the judicial process for such cases so that a final judgement could be enforced in six months.
“This has not been done so far in any country in the world,” he said.
Completing the whole process in six months – from the initial trial at the civil court to the appeals process at the High Court and Supreme Court – would be unprecedented, Yameen said.
“But today the Supreme Court has decided, and the state has taken the initiative, God willing, to try and do this. It is the private sector that will really benefit from this,” he said.
“Business as usual”
President Yameen reiterated that the government’s goal of “transforming the economy” could not be achieved by continuing with “business as usual.”
In contrast, the current administration’s policies represent a “brave, daring, short-cut approach,” he said.
The government’s economic policy is business-friendly and geared towards spurring growth in the private sector, Yameen said, with initiatives such as offering sovereign guarantees for foreign loans obtained by private companies for investment in the tourism industry.
Constitutional amendments approved by parliament last month to allow foreign parties to own freeholds in the Maldives with an investment of US$1 billion was one such initiative and a departure from “business as usual,” Yameen said.
The amendments have proven to be “very controversial,” Yameen conceded, but Maldivians should move forward without hesitancy or fear to “shape the future.”
Addressing concerns over the amendments, Yameen suggested that the “most conservative” criticism involved fears over land shortages in the Maldives.
But a landmass 32 times the size of Hulhumalé could be created by reclaiming land in five lagoons across the country at a cost of US$500 million, Yameen said.
“We believe that Hulhumalé has the space to cater or house 70 percent of the country’s population, and it is being designed and planned so,” he said.
In January, President Yameen said 75 percent of the country’s population could be resettled in Hulhumalé and urged residents of islands with small populations to migrate to the new city. According to the 2014 census, the population of the Maldives stands at 341,256, of which 133,019 people resides in Malé.