Taxing new year
Travellers are going to be wishing that they had gone to visit the Maldives last year instead of this, with the Maldivian government having enacted a new 3.5 percent tax on various tourism-related services. This legislation, passed in August last year, represents an attempt to pull in more revenues from the tourist sector, which already contributes about a third of the country’s gross domestic product. Finance Minister Muhmood Razee hopes the additional money will lessen the budget shortfall to 16 percent from the current 26 percent.
| Photo credit: Sworup Nhasiju
While many in the tourism business have expressed concern over the legislation, a sop was also thrown to the sector, with the lease period for renting out Maldivian islands – yup, full islands – for resorts having been extended from 25 to 50 years. The government has enlisted the help of the Inland Revenue Authority to help travel agencies better understand the new tax. In fact, the new levy is significantly less than in many other countries – the UK, for instance, taxes tourism services by a hefty 17 percent.
As a developing country that is heavily dependent on tourism, however, there are fears that overpricing will put off vacationers, and that the Maldives might not be able to compete with cheaper destinations. The most proximate competition, Sri Lanka, is set to attract tourists to the post-war country with a special 2011 offer. Thailand, too, is reducing prices to override the impact of political instability. In all of this, Maldivian tour operators believe that 3.5 percent tax is a significant hike.
In January, 60 Pakistani Hindus and Sikhs living in camps on the outskirts of Amritsar in Punjab state petitioned the Indian government to grant them citizenship, citing fears of torture and forceful conversion by Islamists in Pakistan. The deputy commissioner of Amritsar, K S Pannu, subsequently informed them that he would make due recommendations to the government on their behalf.
Around 500 Pakistani Hindus and Sikhs who fled Pakistan at different times now live in camps outside Amritsar. Most of them live on extended residential permits that have to be renewed regularly. Every year, more Pakistani minorities cross the border to join their families in the camps, fleeing religious persecution. Most are reluctant to speak in public about their situation, fearing for the safety of their relatives or possible repercussions as and when they return to Pakistan. Last year, 120 Pakistani Hindus from this area were granted Indian citizenship, making more Pakistani minorities hopeful of an Indian passport.
The trend in migration of Pakistani minorities to India is taken as a sign of a growing insecurity among the non-Muslims in Pakistan. Meanwhile, as would be expected, the Bharatiya Janata Party (BJP) has demanded that the government grant citizenship to all such individuals who have entered India.
Bhutan is believed to be home to about 500 wild elephants, which have recently left their usual diet of grasses, small plants and twigs – and taken instead to eating oranges. They have been found in orchards in the country’s southeast looking for the fruit. Beyond bewildering locals, the sudden change in the elephantine diet has created trouble for the Bhutanese economy, as oranges are one of the country’s primary exports. In 2009, oranges brought in some USD 7.2 million, and exports have since climbed continuously.
Some locals of southern Bhutan believe the elephants’ new eating habits are due to a lack of fodder. Alternatively, it could just be that the elephant likes the taste of oranges. The World Wide Fund for Nature (WWF) has also suggested that rapid development has resulted in a growing conflict between rural livelihoods and wildlife. This is ironic, given the fact that conservation of wildlife and environment has long been presented as being at the core of Thimphu’s development strategy. Parallel to this is the reality that the bulk of the state’s revenue comes from exporting hydroelectric power to India and, as a result, the demand for new infrastructure is increasing. Many such industrial areas in the country are in the south, right alongside the elephants’ habitat.
In January, hundreds of protesters gathered outside the Iranian embassy in Kabul after the Tehran government stopped fuel tankers from crossing the border into Afghanistan. Some 2500 tankers were subsequently stranded for six weeks, leading to a 60 percent hike in transportation and food costs in Afghanistan. The protesters accused Iran of interfering in Afghan affairs, in demonstrations that started in Kabul before spreading to Herat, where another Iranian consulate is located. The Afghan Chamber of Commerce passed a resolution opposing the blockade in mid-January.
| Photo credit: Sworup Nhasiju
Afghan Commerce Minister Anwar ul-Haq Ahady was said to be ‘not happy’ with Tehran’s action, and the tense and often contradictory relationship between the two countries arrived at near-freezing point. For its part, Tehran cites concerns about US and NATO forces using the imported fuel to fight the Taliban, against the backdrop of the Western powers accusing Tehran of supporting the Taliban. Iran’s ambassador to Afghanistan added that the Afghan military was using the imported fuel against the interests of Afghanistan and Iran.
Having no refinery of its own, Afghanistan imports three million tons of fuel every year, all of which comes in through Iran. Of this, almost half is destined for the 140,000 NATO soldiers stationed in the country.
The relationship between Afghanistan and Iran has long depended on the personal equation between presidents Mahmoud Ahmadinejad and Hamid Karzai. In the past, the Iranian government has been found to be literally handing over bags of money to Afghan officials, purportedly to promote Iranian interests and counter Western influence in Afghanistan. At the same time, many observers suspect that the recent fuel blockade is a move to undermine Kabul’s alliance with the West, and to increase the Shiite presence in Sunni-dominated Kabul government.
The issue of Bangladeshi migrant workers to West Asia using Nepali documents has recently come to light, with the Nepal Police apprehending the leader of a human-trafficking ring in Kathmandu. A Bangladeshi recruiter named Sheikh Abdul Alim is said to have lured the workers to Nepal with promises that they would be sent from there to countries in the Gulf. Scores of these young Bangladeshi workers now find themselves marooned in Kathmandu.
The scam seems to work like this: once in Kathmandu, the Bangladeshis take up work as construction workers – while being taught Nepali, and are also provided fake Nepali passports. The idea is to trick immigration officers into sending them as Nepali citizens, for they can easily pass off as Madhesi citizens of the Nepal Tarai. It is said that Nepalis are preferred to Bangladeshis labourers in the Gulf countries.
Investigations further revealed that local recruitment agencies and Nepali traffickers are also involved. A manhunt has been under way to catch Alim’s two collaborators, one of whom is thought to have absconded to Bangladesh. Immigration laws in Nepal do not permit foreigners on tourist visas to be employed in the country, so police are now trying to find the Bangladeshi workers and hand them over to the immigration department. Meanwhile, the police have reported that, over the last year, dozens of Bangladeshi nationals with fake Nepali passports have been nabbed. The question arises how many have made it to the Gulf through this route, compared to those who have been marooned.
After weeks of bouncing dangerously up and down, on 10 January the price of shares on the Bangladeshi stock market fell by 9.3 percent in less than an hour. This is thought to be the biggest fall in the Dhaka Stock Exchange’s 55-year history, and brought angry investors to the streets in protest. As many as three million people, most of them small-scale investors, are believed to have lost money that day, helplessly seeing the value of their shares plummet. In recent years, lay people have started to invest in stocks rather than putting their money in savings accounts. The rising values of stocks in Bangladesh have led to massive investments and, for awhile, significant optimism about the future of the economy.
Throughout 2010, share prices on the Bangladeshi stock market steadily increased, culminating in a record high on 5 December. But local economists as well as the International Monetary Fund had warned against risks associated with such rapid growth. This was followed by rumours about inflated stock prices, which led many investors to pull out their money. In turn, this triggered panic among small-scale investors, leading many of them to pull their investments, too. The government, meanwhile, is being blamed for not ensuring an adequate regulatory framework to curtail the ambitions of stock traders.
Although shares did recover strongly the day after the plunge, things fell apart quickly thereafter. On 20 January, trading was halted after just five minutes, due to another massive fall; again, police clashed with irate investors in the streets.
Bangladesh’s economy has been soaring over the last few years, maintaining growth despite external economic shocks, natural disasters and continuing widespread poverty. Yet many are now warning that confidence in the Bangladeshi economy will have received a massive setback following these events.
Karma and cigarettes
Along with the New Year, the people of Bhutan recently welcomed in sniffer dogs, with the passage of a law giving the Bhutan Narcotics Control Agency and the police the authority to enter civilian homes in an attempt to sniff out smokers and snuff out illegal tobacco. The Tobacco Control Bill was enacted by the Bhutanese Parliament in June 2010. Now the government is ready to enforce it. From the beginning of the year, anyone caught smoking or selling cigarettes in all of Druk Yul could face up to five years in prison. The justification for these infringements on civil liberties? In Buddhist Bhutan, smoking is bad for one’s karma.
| Photo credit: Sworup Nhasiju
In its bid to become the world’s first smoke-free country, Bhutan actually banned the sale of tobacco in 2005. But it proved difficult to effectively implement the ban, and there was smuggling as citizens refused to give up their smoke-inhalation rights. Bhutan has set a limit on the amount of tobacco products that an individual can import, and all citizens are required to present a customs receipt to show that their imports are legal. They are also charged a 100 percent sales tax on tobacco products from India, and double that amount on imports from other countries.
On 31 January, Burma’s new Parliament assembled at – and finally inaugurated – the jungle capital, Naypyidaw. In so doing, the Parliament is now sitting for the first time in two decades, and faces an enormous agenda: figuring out how to implement the new Constitution and transfer power from the military to the Parliament and the executive. It is yet unclear how the actual composition of the new House will affect these proceedings. During the November elections, of course, nearly 80 percent of the seats were ‘won’ by the junta-linked Union Solidarity and Development Party, and it is expected that only military-backed members will make it into the cabinet.
Burma has been under military rule since 1962. During the last election, in 1990, Aung San Suu Kyi’s National League for Democracy (NLD) won what is often referred to as a ‘landslide’ victory, but the junta has since refused to recognise the results. This time around, most of the NLD boycotted the election on the grounds that it was unfair, though a splinter party did take part. This group, the National Democratic Force, succeeded in securing 16 seats out of the total 1160 seats.
How the miniscule ‘opposition’ will now interact with the majority old guard will be fascinating to watch. Also in November, the junta chief General Than Shwe signed a new law outlining parliamentary procedures, which is reported to give parliamentarians some freedom of expression, but with restraints. They are not to place ‘national security’ at risk, for instance, and any demonstration within the Parliament is liable to be punished by up to two years in prison – similar to what goes on outside of the House.
The Colombo government recently decided to allow in foreign investigators keen to look at the period around the end of the civil war, in May 2009. This constituted a reversal in the government’s earlier policy, which had held that any investigation into the conflict should be dealt with solely as an ‘internal matter’.
| Photo credit: Sworup Nhasiju
The about-face is said to be the result of pressure from international human-rights groups, which had accused the government-appointed investigative body – the Lessons Learnt and Reconciliation Commission (LLRC) – of having close ties with the government and, therefore, being unfit to conduct an impartial enquiry. Thus, many groups had very publicly refused to work with the LLRC. Pressure also came from Western governments, particularly the EU and US who threatened to impose sanctions for not setting up an international probe.
The controversy started in June 2010, when Foreign Minister G L Peiris said that a UN panel on human rights appointed by Secretary General Ban Ki-moon would not be allowed into the country. Instead, the government would conduct its own inquiry. In August, the newly constituted LLRC thus began to hear evidence from army commanders and senior officials.
The criticism began almost immediately: the commission was ignoring allegations of war crimes, and hundreds of willing Tamil civilians were not allowed to offer testimony. Indeed, the mandate of the LLRC is not to investigate alleged war crimes. Rather, it is concerned with the reasons for the breakdown of the 2002 ceasefire and recommending measures to the government, with an eye to preventing another outbreak of war.
In the aftermath of the recent concession, however, observers have expressed doubts about the new UN investigative team being allowed to operate freely. For instance, the three-member team (not named in media reports but made up of an American, an Indonesian and a South African) will only be allowed to meet with the LLRC, not with representatives of civil society or other civilians affected by the war. Incredibly, the panel will also not be allowed to travel around the country, nor can it issue a report at the end of its investigations in Sri Lanka. Rather, it is only to give its findings to UN Secretary-General Ban Ki-moon.
A week after the departure of the UN’s political mission in Nepal, UNMIN, on 22 January, the mandate for monitoring the hardware of conflict – the weapons and cantonments on both sides – was handed over to Nepali oversight. The so-called Special Committee, headed by Prime Minister Madhav Kumar Nepal, will now be formally vested with responsibility to command the combatants of the People’s Liberation Army (PLA), something that should have happened under agreement three years ago. Not only does this finally take the combatants from under the wing of the Unified Communist Party of Nepal (Maoist), but also opens the door to deciding how to integrate some into the country’s security forces and ‘rehabilitate’ others back into society.
The handover, being cautiously applauded by all sides as a success in Nepal’s stuttering peace process, constituted one of the most important actions to be taken following UNMIN’s exit. The Special Committee’s takeover comes after months of apprehension over whether post-UNMIN Nepal would revert to conflict, as some feared.
The Special Committee will now monitor seven arms containers at Maoist cantonment sites and at a token Nepal Army container at a barracks in Kathmandu. The last-minute deal on 14 January, preceding UNMIN’s departure against Maoist wishes the next day, had a Special Committee deployed to monitor the cantonments. The team included 16 members each from the Nepal Army, Armed Police, Nepal Police and the Maoist PLA.
UNMIN’s departure came after the last extension of the mission expired, and the Security Council indicated its unwillingness to extend the mandate again – something that had already happened six times. China and India were particularly keen on UNMIN’s departure, unhappy with a peace-mandated UN presence in the Asian neighbourhood.
A stinky affair
There has been some recent good news for the New Delhi government as it struggles to rein in the price of onions. Islamabad lifted its ban on onion exports to India, just a day after it imposed it. As a result of the ban, 1500 tonnes of onions had not been allowed to cross the Attari-Wagah border, as Pakistani officials ostensibly feared a similar price hike to what had taken place in India. Prior to the ban, which was lifted after protests from Indian External Affairs Minister S M Krishna, India imported 25,000 tonnes of onion over the subsequent two weeks.
| Photo credit: Sworup Nhasiju
The cost of onions and other staple foods in India more than doubled in 2010, rising by 8.6 percent in 2009 to 18.3 percent by the end of the year. All this despite India being the world’s second-largest onion producer (after China), growing 14 percent of the world’s onions. However, unseasonal rainfall late in the year resulted in massive crop damage, leading in turn to drastic shortage. The hardest-hit are the main onion-producing states of Maharashtra and Gujarat, which collectively account for around 40 percent of supply.
Some experts are cautioning that it is not last year’s rains alone that are to blame – the previous year saw similar untimely rains. More cuttingly, the government also moved to increase onion exports during that time, and in 2009-10 such exports were higher than any other time in recent memory – some 1.9 million tonnes. The government also enthusiastically pushed for a reduction in the price of exported onions in early November, assuming that the harvests from the kharif, or rainy season, would ensure regular supply. They were wrong. Amidst the onion shortfall, Pakistani onions have come as a godsend to the onion-hungry Indian consumers. Foreign Minister Krishna’s intervention indicates how important onion diplomacy is.
Indian Home Minister P Chidambaram has a lot to think about, with the Telangana issue still on the boil. A national committee’s report on the proposed state was made public in January, and a decision cannot be put off for much longer. The demand for a separate state – which New Delhi rather hastily conceded in December 2009, only to backtrack equally hastily – has met with strong opposition from the Andhra Pradesh government, even though the Congress party, which is in power both in the state and at the Centre, claims it supports the longstanding demand. The Telangana region is currently in northern Andhra, bordering Karnataka, Maharashtra, Chhattisgarh and Orissa, having become part of Andhra in 1956; prior to its annexation, it was part of the princely state of Hyderabad.
The report outlines six options to resolve the issue, the first being to maintain the status quo, which the committee felt was the least favoured option, given the urgency and sensitivity of the conflict. Second, to create two new states from Andhra, to be named Seemandhra and Telangana, with Hyderabad as a union territory given its ‘pivotal position’ in the conflict. Third, to merge Rayalaseema, another region in Andhra, with Telangana to make Rayal-Telangana, a separate state from coastal AP; Hyderabad would go to Rayala-Telangana.
The fourth and fifth options follow from the second, which is to create Seemandhra and Telangana. The fourth proposes the expansion of the union territory of Hyderabad, while the fifth proposes that Hyderabad should go to Telangana. The sixth and last option is that Andhra remains with its current borders, but with increased focus given to the economic development of Telangana, to be overseen by a new Telangana Regional Council. The sixth and fourth options are the ones now most favoured by the committee.
Following the release of the report, the people of Andhra have been requested to ‘stay calm’. The call for a separate state is rooted in long-term disillusionment with the Hyderabad government, which proponents of Telangana blame for their region’s stunted economic development – done at the cost of making the rest of Andhra richer. To date, political parties and the people remain divided over the issue. At present, Telangana leaders remain firm in their demands, as talks with the Congress party held in January ended without resolution. For its part, the Telangana Rashtra Samiti, which spearheaded the agitation, has rejected the committee’s report.