Defamation was decriminalised in the Maldives in 2009, and now carries a maximum penalty of Rf 5000 (US$325). That same year the Maldives jumped 53 places in Reporters Without Borders’ press freedom index and was upgraded by Freedom House from ‘not free’ to ‘partially free’.

Cabinet’s move comes on the back of growing concern that some such allegations are being made for political purposes, and that fear of their share prices being damaged by the Maldives’ byzantine local political agendas may be a factor discouraging potential foreign investors.

Minister for Economic Development Mahmoud Razee told Minivan News that Cabinet’s intention was to review allegations of corruption against the government, and refer them to police for investigation where justified.

He said the intention was not to take on the duties of the Anti-Corruption Commission (ACC), as “in many cases these are allegations that never reach the ACC.”

The primary objective was to show that the government was taking corruption allegations seriously in the wake of Transparency’s 2011 Corruption Perception Index (CPI), Razee said.

The Maldives rose slightly to rank 134 this year, scoring 2.5 on a scale of 0 (highly corrupt) to 10 (very clean), placing it alongside Lebanon, Pakistan and Sierra Leone.
Transparency Maldives’ Project Director Aiman Rasheed observed at the time that there was a “systemic failure to address corruption” in the country.

“Corruption in the Maldives is grand corruption, unlike neighbouring countries where much of it is petty corruption,” Rasheed said. “In the Maldives there is corruption across the judiciary, parliament and members of the executive, all of it interlinked, and a systemic failure of the systems in place to address this. That why we score so low.”

Razee acknowledged the need for the government to address the corruption index, but emphasised that it did not reflect the actual level of corruption but only its perception – “reflected in our transparency, the availability of information, and right to information.”

Monitoring accusations and investigating or filing defamation cases where justified should show that the government was taking the problem seriously, he suggested, “and show we stick to our principles.”

Allegations of corruption and fractious local politics this year impacted several foreign investors, including mobile security solutions vendor Nexbis and airport developer GMR.

Nexbis shares immediately dropped 6.3 percent on the back of an ACC’s announcement in January that the project was to be suspended after it observed “opportunities for corruption”.

Nexbis issued a statement at the time claiming that speculation over corruption was “politically motivated” in nature and had “wrought irreparable damage to Nexbis’ reputation and brand name.”

“Although we understand that the recent media frenzy and speculation of corruption are politically motivated in nature and not directly related to Nexbis, it has had an indirect impact on our reputation and brand name,” the company said.

The ACC has since forwarded corruption cases against former Immigration Controller Ilyas Hussain Ibrahim and Director General of Finance Ministry, Saamee Ageel to the Prosecutor General’s Office (PG), alleging the pair had abused their authority for undue financial gain in granting the project to Nexbis.

On Thursday last week GMR shares on the Mumbai stock exchange fell 7.57 percent on the back of a Civil Court ruling against the company’s proposed US$25 Airport Development Charge (ADC), included in the concession agreement signed with the government. The suit was filed by the opposition-aligned Dhivehi Quamee Party (DQP).

Razee acknowledged that while political parties were obliged to behave in a professional manner, given the tumultuous political environment “Yes there is a possibility that [corruption allegations] will be used for political purposes.”

Razee noted that investors sometimes struggled to raise finance in Maldives as it was not a weighted country, and faced potential difficulties “if a contract turns sour”, due to the lack of arbitration. Both problems were highlighted in World Bank assessments, he said, but added that the government had a bill pending for a proposed Mercantile Court, staffed by foreign judges with a separate seal and special jurisdiction to solve disputes involving business transactions.