Trade minister deflects blame from China FTA for plummeting customs revenue
A digest of yesterday's top story.
17 Feb, 9:00 AM
Maldives Independent
Good morning. The economic development minister's defence of a free trade agreement with China after a sharp drop in customs revenue made headlines yesterday. In other news, the Majlis speaker might be back in the PNC fold, the broadcasting regulator's vice president is accused of sexual harassment and the former police chief defended his role in the failure to check corruption at the police welfare company.
Economic Development Minister Mohamed Saeed was adamant that a controversial free trade agreement with China that came into force in January was not to blame for a sharp drop in customs duties.
As of February 6, revenue collected by customs was down from MVR 385 million (US$ 25 million) last year to MVR 138 million in the same period this year, according to the latest fiscal developments report from the finance ministry.
Asked about the steep fall during a forum with ministers on Saturday night, Saeed denied any link between the FTA and the 64 percent decline in import duties.
The Maldives imported goods worth MVR 1 billion this year with a cost, insurance and freight value of MVR 34 million, out of which “FTA relief amounted to MVR 2.3 million,” he explained. “That’s just one percent of total imports. So the revenue drop has nothing to do with the FTA,” he insisted.
The trade ministry’s team has been trying to explain the import duty fall to the public and “put it into a good perspective,” he said.. As an import-dependent country, both businesses and consumers will benefit from cheaper goods, Saeed argued.
The dramatic fall in government income came after India’s foreign ministry expressed concern over the FTA’s potential impact.
"Recent agreements that are likely to result in revenue loss for the Maldives government are obviously a matter of concern and do not bode well for the long-term fiscal stability of the country," External Affairs Ministry spokesman Randhir Jaiswal told the press on January 31.
"We would obviously need to take that into account while framing our own policies."