Constitutional amendment on foreign land ownership up for debate tonight

A constitutional amendment to allow foreigners to own land in the Maldives will be up for debate at an extraordinary parliament sitting tonight, only hours after it was submitted to parliament.

The amendment allows foreign parties to own land for projects worth US$1 billion. Ownership is dependent on the parties reclaiming more than 70 percent of the plot.

The constitution at present prohibits foreigners from owning land under any circumstances, but allows the government to lease land to foreign parties for up to 99 years.

The amendment is the second amendment proposed to the constitution since it was ratified in 2008. It was proposed by Ahmed Nihan, MP of the ruling Progressive Party of the Maldives (PPM) and the majority leader.

Nihan said he has proposed the amendment to increase economic growth and to facilitate sustainable investment. It will allow foreigners free holds in the Maldives, and to transfer ownership or lease their plots.

The amendment comes amidst negotiations between the government and the main opposition Maldivian Democratic Party (MDP). The opposition has so far backed several unprecedented measures proposed by the government in hope of freedom for jailed opposition leader Mohamed Nasheed and other politicians.

MPs in June passed the first amendment to the constitution to set new age limits of 30-65 years for the presidency. Subsequently, vice president Dr Mohamed Jameel Ahmed was impeached today. He is expected to be replaced by tourism minister Ahmed Adeeb.

The amendment may be put to a vote as early as tomorrow. Tonight’s sitting was scheduled after the parliament today approved changes to the standing orders to fast-track the process of passing a bill into law.

The legislative process includes three main stages: a preliminary debate on the floor, an extensive review by a committee involving consultations with stakeholders and experts, and a final debate on the committee’s report followed by a vote. However, under the new rules, all three legislative stages can be carried out consecutively and a final vote could be held on the same day as a bill is submitted.

The changes were approved with 56 votes in favour and 24 against.

The PPM in 2014 enacted a law on special economic zones with tax breaks and little regulation to incentivize foreign investment. The government previously said one SEZ project could transform the economy, but has so far failed to attract investment.

The amendment on foreign ownership comes amidst increased attempts by the government to woo Chinese and Middle-eastern investors.

The proposed change includes amending Article 251 of the constitution and adding a new chapter to the constitution. Below are some important provisions.

Article 302: If a project meets the set criteria, he Maldivian government may grant any party a freehold in the area designated for the project

Article 304: A project can only be approved if it meets the following criteria
(a) A project approved under a law passed by the People’s Majlis
(b) An investment of US$1billion in the territory of the Maldives
(c) When the project reaches completion, at least 70 percent of the land must have been reclaimed from the ocean and visible at medium tide

Article 305: The parliament can increase the threshold for investment by a law. However, such a change will not apply to projects approved before its enactment.

Article 251: No foreign party shall own land in the Maldives, except under the circumstances specified in Article 302. Allowing foreigners to own land under Article 302 does not undermine the Maldivian state’s sovereignty over its territory and does not amount to loss of territory.

Reporting by Hassan Mohamed, Ahmed Naish and Zaheena Rasheed.