The role of the police and military is simple in theory. The police enforce the law, the military safeguards national security, and the government ensures that these institutions are funded and supported. Yet, in the Maldives and elsewhere, these fundamental duties have taken a back seat as law enforcement agencies morph into business entities—running property developments, trading goods, and even competing with private sector enterprises.
The revelations of financial mismanagement and corruption tied to the Police Cooperative Society (Polco) are just the latest examples of why security forces should never be in the business of business. The recently published audit report on the police housing project details an alarming pattern of inflated costs, questionable contracts, and incomplete work that has dragged on for more than a decade. What was meant to provide affordable housing for officers instead became a cash sink, with over MVR 1 billion spent and a loss of MVR 354.7 million incurred.
A Conflict of Interest
It is not just about the money. When government institutions, particularly those in law enforcement, step into the private sector, the implications go far beyond financial mismanagement. They distort competition, discourage private investment, and introduce conflicts of interest that erode public trust.
This is not a problem unique to the Maldives. Across the world, in economies that respect the principles of free markets, security forces do not build apartments, run catering services, or manage business portfolios. They are funded by the state, not by profits. When public institutions enter the market, they do so with an unfair advantage—access to government resources, regulatory influence, and a level of authority no private business can match. The result is an economic playing field tilted in their favour, pushing out competitors and reducing market efficiency.
How It’s Done Elsewhere
The argument for such ventures often hinges on welfare—providing additional income and benefits for police officers and soldiers. But there are better ways to support them. In countries with strong governance frameworks, welfare for security personnel comes from well-structured state policies, not profit-driven enterprises.
The United Kingdom, for instance, ensures police officers have access to government-funded housing support without involving police-run corporations. In Germany, military cooperatives exist, but they do not engage in commercial competition, limiting their role to internal support services. The contrast is stark: in free-market economies, security agencies do not operate businesses that compete with the private sector.
The Police as Developers: A Billion-Rufiyaa Disaster
Polco’s downfall follows a familiar pattern. It was never meant to be a property developer, yet it took on a multi-million-dollar project despite having no expertise in large-scale construction. The results were disastrous. The project was handed from one contractor to another, draining more funds with each transfer.
Noomadi Resorts and Residences, the first contractor, was dismissed after years of delays. The second, Island Expert, turned out to have links to Noomadi’s shareholders, resulting in yet another cycle of failed delivery and financial mismanagement. Even subcontracted tasks, such as lift and CCTV installations, ended up benefiting individuals tied to the same network.
The irony is inescapable. The police, whose role is to prevent crime, have become central players in a case that reeks of corruption and corporate misconduct. The audit report does not name names, but it does not have to. The threads all trace back to a handful of individuals who controlled multiple companies involved in the project, pocketing profits while the government continued to bleed funds into an unfinished development.
Public Outrage and Calls for Reform
Meanwhile, the public watches as their tax money is funnelled into ventures that serve neither the economy nor the citizens. There is now growing public outcry, with demands for Polco and its military counterpart, Sifco, to be dissolved. People are asking the fundamental question: why should the police and military be running businesses at all? These are institutions that already receive the largest share of the national budget. If that is not enough to sustain their operations and welfare needs, the solution is not to compete in the market but to reassess how those funds are allocated.
This is where the conversation should shift—from policing the streets to policing accountability. If the state insists on housing schemes or other welfare initiatives for police and military personnel, these should be managed transparently, either through government-backed housing policies or partnerships with private firms under competitive bidding processes. The current model, where security agencies themselves act as business players, is a system ripe for abuse.
The Bigger Danger
It is not difficult to see where this road leads. The more state institutions entangle themselves in business, the more blurred the lines become between governance and enterprise. And when those in power control both the regulatory framework and the businesses operating within it, corruption is not a possibility—it is an inevitability.
The lesson from Polco’s controversial housing project is clear: security forces should not be in business. Their mandate is to protect the people, not to engage in corporate ventures that distort the market and open the door to financial scandals. The market should be left to private entrepreneurs, while government agencies focus on their core responsibilities. Anything else is a recipe for economic inefficiency, public mistrust, and a system where those in uniform wield influence far beyond what they were ever meant to have.
