You were appointed Minister of Finance in 2016. What have been your biggest accomplishments since then?

We have been continuing much of the work of the previous minister, who is now Vice President. One of the things we have been able to successfully finalise over the last four years is the publication of the Maldives' rating for the first time. We have now been rated three times – twice by Moody's and once by Fitch. And we published them, which shows we are committed to talking to the international community.



Both ratings were stable – what does that say about the economy of the Maldives?

As an independent evaluation, it shows that our economy is very strong, despite some internal political and structural issues. Our economy is very much supported by the private sector, which has been there for the last 20 or 30 years and is driven by the tourism industry. The government's economic policies have a long-term vision. We have reformed many structural issues –following many of the recommendations of the World Bank and the IMF. There are few areas we still need to improve – structural issues, economic fundamentals, governance issues – but we are moving in the right direction. The vision of the president and the cabinet has shown us we can improve in a very short period of time.



The Maldives Investment Forum is to be held in Dubai in December. What are your goals for the conference and what are the different opportunities in the Maldives?

The Minister of Economic Development has been working on the forum for some time. It will be another important milestone in the government's efforts to get more investors coming in. For us, the Gulf Cooperation Council (GCC) countries have a lot of potential, especially after our rating. We have already started discussing potential bond issuances, which will help us find good investors willing to invest in foreign currency bonds at a better yield than we had earlier. After the rating, we went out and for the first time made a bond issuance of USD $200 million. We were actually oversubscribed – we had twice that amount – but we were prudent and only took USD $200 million. I have been talking with the cabinet about the next issuance targeting GCC countries, where there is a lot of appetite for Islamic financing. The government has also been promoting investments from these countries.

In a recent speech the President said: "The biggest social challenge faced in the Maldives is the housing shortage." Could you please tell me what you are doing to address that problem?

Housing is one of the basic areas that the government is focusing on. In the Maldives, especially in Malé, the capital, where one third of the country's population is concentrated, housing is difficult. A lot of people do not have their own housing, the cost of living is quite high, and since it is located on an island, there is no space to build more housing. But we have found a solution. We have reclaimed land on a nearby island called Hulhumalé and we are building all new infrastructure there: shore protection, roads, water, sewerage and the rest is all ongoing. And we are connecting Hulhumalé to Malé by a bridge that is being built with the assistance of China. And with this land link between Malé and Hulhumalé, we will open up this area and create opportunities for affordable housing. We have signed many agreements with the various relevant companies to develop social housing, and also medium-range and high-end homes.

Apart from Hulhumalé, we are working in other urban centers where the population is not so dense, but where we have relatively large communities. In those spaces we are copying what we are doing in Hulhumalé, but on a smaller scale. We increase land, we create housing and make it more affordable.

There has already been a lot of interest shown – especially from resort companies – but there is still room for investment in the tourism industry. Last year, we had 10 new resorts opening in the Maldives. That is the most lucrative industry we have. Another important area is the Special Economic Zones, through which we give many incentives to big investors – for example, tax holidays for investments over $100-$150 million. We also give them long leases – more than 99 years – and other kinds of incentives. There are also incentives for investors who are able to reclaim land. There is already an investment from a Thai company, which has started reclaiming land and making a whole island from lagoon areas. Ports have been another key investment. There are two: our Malé area port is there, but there is another important port towards the Special Economic Zone area, called the iHavan, which could be the location of a good transhipment port. The designs have been done by the Economic Ministry and we are already discussing them with Saudi Arabia and other funds. We are seeking loan financing and investor equity financing for those places. The investment could be $300 or $400 million.

Regarding synergies between the GCC and the Maldives, could you talk about your masterplan for Islamic financing?

One of our main partners is the Islamic Development Bank (IDB). We have been seeking its assistance in making an Islamic financing masterplan and it has already started preliminary work. One of the government's main strategies is to make the Maldives a centre for Islamic financing within the South Asian Association for Regional Cooperation (SAARC) area. Over the last three or four years we have successfully established one of the fastest-growing banks in our country, the Maldives Islamic Bank, which has been of great assistance and has created many projects. One of the most important ingredients in establishing an Islamic bank is having the right regulatory framework, and the IDB has already made the initial draft of the law. Hopefully next year we can finalise it. We believe that, since the Maldives is not only an Islamic country but also very much at the centre of all these things, we have the right ingredients and we can do a lot of legislative changes very quickly to accommodate Islamic financing. Islamic banks and portfolios have been able to grow very rapidly. Even the Bank of Maldives has opened an Islamic 'window' and so it will be in competition with the Maldives Islamic Bank, which is very important. Before the end of this year our goal is to launch domestic sukuks – Islamic bonds – in the Maldives. Right now we don't have the regulatory framework to do that. These sukuks are essential for the security management of Islamic banks.


What would be your pitch to the average person in Dubai who is already using Islamic financing? Why should they move their funds to the Maldives?

We have ample investment opportunities, especially in tourism and other related industries. The rate of return here is very high. The resort investments have been able to break even and get huge returns in less than five years. The reason that investors, especially in the tourism industry, prefer to invest in the Maldives is because this is a proven product. We have huge growth in the Middle East market – 29% average over the last five years. And if you look at the rate of return, it is very high in Islamic banks – about 5%. One of the differences with Islamic banking is that risk is very much minimised. There are challenges regarding the kinds of instruments they can invest in – for example, there are some issues in the tourism industry – but there could be vehicles through which we could earmark some of these funds and investment could be protected, through halal tourism, for example.

So you're diversifying the economy but within the tourism sector…

Some of the related industries I mentioned, such as the financial sector, are very important. They have a back-to-back relation with the tourism industry. Another one is the transhipment port. We're so interested in this because of our location, which is ideal. But there need to be investors who are ready to work with us for the long term and I think they can easily reap benefits. Even with the kind of investment we are able to make ourselves, we are seeing the benefits – expansion can be huge. Right now, the technology is changing, they are trying to cut costs and the right routes are being introduced. If you look at these routes, the Maldives is in the perfect zone.


As Minister of Finance, how do you envision the economic performance of the Maldives in the next five years?

If we complete all the major investments already on the way – especially in our airports and in the health sector – enabling our tourism industry to expand, we'll be able to reach double-digit growth. We might have 5-6% growth this year because the tourism industry is expanding as well as growing. We are also attracting new markets. The Middle East market is essential. We have new direct flights, especially from Saudi Arabia, and hopefully by June or July next year we'll have finalised the new runway. This will attract new airlines and bring new tourists. For the last two to three years we have been relying on the Chinese market, but the Indian market is also picking up. In GCC countries I'm seeing huge growth with halal tourism. I was told that many investors in Saudi are unaware of the potential investment opportunities that are here. Just like Dubai and other countries, we are very much open for investors.