Former President Abdulla Yameen has proposed making it mandatory for foreign banks operating in Maldives to contribute USD 500 Million to the economy to boost foreign reserves.
Speaking on local media, Yameen criticised current economic policies impacting the tourism sector, warning that measures such as the Maldives Monetary Authority’s (MMA) requirement for tourism businesses to exchange USD 500 per tourist at local banks could harm the industry. He proposed alternative solutions to address the dollar shortage, including requiring foreign banks operating in the Maldives to inject significant funds into the local economy.
“There are five foreign banks operating in the Maldives. If each brings in USD 500 million annually, USD 2.5 billion would enter the economy every year. This capital could be used to fund projects repaid in dollars, easing the dollar shortage,” Yameen said. He suggested that the MMA should revoke the licences of banks failing to meet this requirement.
Yameen argued that the MMA’s policies unfairly burden the tourism industry, which plays a vital role in the Maldivian economy. “These are the people who have brought prosperity to this sector and employed thousands of young people. Destroying this industry will have serious consequences,” he stated. He also questioned the MMA’s authority to dictate how businesses manage their earnings, emphasising that income, after taxes, belongs to the individuals or businesses that generate it.
Yameen attributed the dollar shortage to government over-spending rather than debt repayment and urged the MMA to address this issue by regulating state expenditure. “The dollar is declining due to government spending. The MMA should inform the government to maintain expenditure within the dollar available in circulation,” he said.
He criticised the rise of a parallel market where the dollar is traded at rates higher than the official rate, blaming unethical government spending and inadequate oversight for this issue.
The former president called on the government to engage in dialogue with the tourism sector to reduce unnecessary expenditure and develop balanced economic policies. He highlighted the reliance of tourism operators on dollars for foreign loan repayments and operational expenses, warning that the current policies force businesses to depend on the parallel market. “This is not a sustainable rule. Businesses should pay taxes to the state as required by law, but they cannot be forced to buy dollars at the official rate when the market conditions are vastly different,” he said.
Yameen emphasised the importance of adopting measures aligned with the realities of the economy, urging the government to support the tourism sector’s contribution to national growth while addressing the ongoing dollar crisis.
