DTIS, Volume I - Enhanced Integrated Framework (EIF)

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to 15 per cent and 8 per cent respectively for local lending to become more competitive. • The ADF is available for very small credits and is apparently functioning well with a 95 per cent recovery rate. But distribution of these funds and general business support to entrepreneurs is weak. Micro-credit lending for incomegenerating activities need to be more fully integrated with poverty reduction strategies. • The SME sector lacks financing in the USD10, 000 to USD 200,000 range that restricts the development of medium sized enterprises. • Collateral, even with the new Land Act of 2002, is still a major obstacle to securing credit, especially for SMEs. Lending institutions do not find land-leasing arrangements to be a viable basis for securing loans. This requires further attention by government. • There are no venture capital facilities in the Maldives and this should be an area that needs to be created and developed in conjunction with the capital markets for future listings and exit route strategies. • There is need for a detailed review of the operations of the financial sector leading to a viable development plan for the sector that will be integrated into the7th National Development Plan. Key issues that should be addressed include the modernization of the sector to meet current development and poverty reduction needs, arrangements and gaps in the provision of credit, institutional development including extending the current limited operations of the Capital Market Development Authority as well as the introduction of a bond market. • Financial sector reform will also facilitate an international credit rating to be established for the Maldives, which is essential for increasing options for accessing international finance. 71
Appendix The mixed record of the Maldives on the foregoing indicators is also clear in the first World Bank Doing Business Survey undertaken in 2004 (www.doingbusiness.org) and assessment of the investment climate (World Bank Investment Climate of the Maldives Concept Paper, 2005). The main issues studied in these assessments were requirements for starting a business; access to land and registration of property; hiring and firing workers; transparency of investment and credit flows; protection available to investors and winding up a business. A. STARTING A BUSINESS Starting a business is relatively easy in the Maldives with few restrictions. For foreigners, a one-month visa is issued at the airport and this can be extended to three months for persons wishing to remain longer for business reasons without requiring a work permit, as long as a local sponsor supports the application. The various procedures necessary for registering a business can be completed in less than two weeks (see Table 5.1). Government policy allows free entry of investment funds and repatriation of profits. There is no corporate taxation (except for the banking sector). Table 5.1: Procedures for staring a business Nature of procedure Duration US$ cost (days) Search for a company name 1 15.63 Deposit the initial capital in a bank and obtain a bank statement 3 0 Have a notary certify the company statutes and signatures 1 23.44 Make a company seal 1 15.63 Pay registration fees 1 0 Register with the Registrar of Companies 5 156.25 Total 12 210.95 Source: World Bank Doing Business Survey B. ACCESS TO LAND AND REGISTRATION OF PROPERTY Nearly all land is government-owned and can only be utilized on a lease basis. There is one main exception - the new ‘freehold’ (99 year lease) provisions for reclaimed land in Male’ and Hulhumale’. On other islands, leases are negotiable for varying periods from three to thirty five years. A new provision that has been made extends a lease to 50 years if the company is listed in the new stock market. Registration of property is also fairly uncomplicated (see Table 5.2). However, there are severe limitations on the extent to which leased land can be used as collateral for credit. The 2002 Land Act seeks has addressed this constraint but is yet to be tested. Credit institutions are still adverse to accept land as collateral. Table 5.2 Property rights for Maldives (2004) Registration of property variables Indicator Number of procedures 1 Time (days) 20 Cost (% of property value) 0 Source: World Bank, Doing Business Survey 72
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FINAL R E P O R T Volume 1 MALDIVES
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GSP HACCP HDFC HDI HIES HH HRD HS I
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TRIPS TRTA TSA TTMP UAE UK UNCTAD U
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CHAPTER 6: CUSTOMS SERVICES AND TRA
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major stakeholders as the basis of
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C. ECONOMIC TRENDS Buoyant GDP grow
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WTO members (through the Committee
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The recommendations cover these iss
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Requirements Action no. Action reco
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government, and lawmakers are elect
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. 4
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to Sri Lanka. However, by 2004 the
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This relatively high proportion of
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On an annual basis, total NFA of th
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elow provides data on the public in
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According to the estimates prepared
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Table 2.8: Damage to agricultural f
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II. Imports - Merchandise There has
Page 43 and 44: the relatively high rate of unemplo
Page 45 and 46: A. DESTINATION OF MERCHANDISE EXPOR
Page 47 and 48: Penetration of international market
Page 49 and 50: Overall, the importance of foreign
Page 51 and 52: on goods deemed luxury goods (e.g.
Page 53 and 54: the Japan and USA markets. 11 Fish
Page 55 and 56: The Modalities provide that the res
Page 57 and 58: emoved. However, in order to provid
Page 59 and 60: EBA. Appropriate transition arrange
Page 61 and 62: Several provisions such as Article
Page 63 and 64: CHAPTER 4 POVERTY REDUCTION AND HUM
Page 65 and 66: Table 4.2: Poverty Gap Ratios per R
Page 67 and 68: produced locally and are readily av
Page 69 and 70: commerce, information and communica
Page 71 and 72: Table 4.3: Fishery Sector employmen
Page 73 and 74: This also requires policies that ta
Page 75 and 76: with routine functions of administe
Page 77 and 78: Applying for a license to invest in
Page 79 and 80: E. MINISTRY OF FISHERIES, AGRICULTU
Page 81 and 82: K. PRIVATE SECTOR STAKEHOLDERS Priv
Page 83 and 84: Overall, it is estimated that the c
Page 85 and 86: The cash is held and disbursed by t
Page 87 and 88: difficult to reach given the except
Page 89 and 90: system of micro-credit intermediari
Page 91 and 92: F. LAND, RAW MATERIALS AND SUPPLIES
Page 93: B. LABOUR MARKET REFORM About 44 pe
Page 97 and 98: legislation incorporates the initia
Page 99 and 100: CHAPTER 6 CUSTOMS SERVICES AND TRAN
Page 101 and 102: Maldives Port Authority • Respons
Page 103 and 104: the correct amount of customs duty
Page 105 and 106: suspense procedures, thus eliminati
Page 107 and 108: A new domestic terminal at MIA will
Page 109 and 110: There is need to clarify MAC’s na
Page 111 and 112: Changes in the role and structure o
Page 113 and 114: Significant improvements have been
Page 115 and 116: CHAPTER 7 THE TOURISM SECTOR Chapte
Page 117 and 118: British market in 2001. In 2004, be
Page 119 and 120: Similarly, considerable demand was
Page 121 and 122: for imports of support infrastructu
Page 123 and 124: government revenues from the supply
Page 125 and 126: number of trainees that have been t
Page 127 and 128: established as a quality tourism de
Page 129 and 130: Maldives' unspoiled marine environm
Page 131 and 132: The Faculty works very closely with
Page 133 and 134: TOURISM ACT A key objective of the
Page 135 and 136: HRD studies and conduct of necessar
Page 137 and 138: D. ESTABLISH AN ENABLING BUSINESS E
Page 139 and 140: Main Recommendation No. 5: review a
Page 141 and 142: Main Recommendation No. 6: Scale-up
Page 143 and 144: CHAPTER 8 FISHERY SECTOR Chapter Pl
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processing under-performing more th
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per cent - see Table 8.4. The secto
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In the light of these market trends
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documentation, and administration.
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monitoring and evaluation dates fro
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and catering industry chefs demand
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It is expected that the trial fishe
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• Can seaming and retorting; •
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DTIS, Volume I - Enhanced Integrated Framework (EIF)

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