The government has "intimidated" tourism industry stakeholders by alleging that certain resorts are engaging in black market foreign exchange transactions to maintain high dollar rates.
Executive board members of the Maldives Association of Tourism Industry (MATI) were abruptly summoned to the President’s Office yesterday to discuss the matter.
Reliable sources informed that the invitation for the meeting, held at 1:30 pm yesterday, was sent to MATI at approximately 10:30 am that morning. The MATI delegation was led by Salah Shihab.
The government was represented by Finance Minister Hassan Zareer, Home Minister Ali Ihusaan, Tourism Minister Mohamed Ameen, Economic Minister Mohamed Saeed, Attorney General Ahmed Usham, and the Governor of the Maldives Monetary Authority (MMA), Ahmed Munawar. Additionally, BML Chairman and Cabinet Secretary Ahmed Ali Habeeb attended the meeting.
In an email sent to its members following the meeting, the MATI Secretariat stated that the government had informed them that investigations by law enforcement agencies identified certain resort operators attempting to drive up dollar rates on the black market through illegal transactions.
However, the email noted that MATI informed the government it had no knowledge of such illegal activities and emphasized that the association consistently advises all members to remain compliant with laws and regulations.
The government has not released any official statement regarding the meeting.
A resort owner, speaking on condition of anonymity, said the government claimed during the meeting to possess evidence of resorts selling dollars on the black market.
"This is intimidation. They [the government] believe this is a problem created by resorts. That is not the reality. Resorts comply with all tax hikes and regulations introduced by the government," the resort owner told Adhadhu.
"I am not saying there aren't people doing things incorrectly. But if there is evidence, why not take action?"
Senior tourism industry figures argue that the dollar shortage is not a result of resort operations but rather a consequence of flawed government policies. They warned that the situation would not improve by intimidating businesses instead of addressing the root causes.
"Currently, even A-grade yellowfin tuna is being imported into the Maldives. This is just one example. How can the issue be resolved if the government does not address the factors causing dollar outflows?" another source remarked.
As the dollar shortage intensified, the MMA for the first time publicly named two resorts—Rahaa Resort and South Palm Maldives—for failing to comply with foreign exchange regulations.
According to a compliance report released by the MMA, 78 percent of establishments regularly exchange dollars. While 20 percent do not exchange sufficient amounts, many within that group have requested concessions.
In Category B (guesthouses, hotels, and safaris), 48 percent are compliant, 15 percent do not exchange sufficient amounts, and 37 percent have not exchanged any dollars.
In Category C (non-tourism businesses with annual revenues exceeding $15 million), 38 percent are compliant, 33 percent do not exchange sufficient amounts, and 29 percent have not exchanged any dollars.
The MMA is currently working to amend regulations to replace the existing requirement of exchanging $500 per tourist with a mandatory requirement to exchange 20 percent of total revenue. Additionally, a proposal has been made to raise the revenue threshold for Category C businesses from $15 million to $25 million.
Central bank statistics show that during the first year of the Foreign Exchange Act's implementation, the tourism sector exchanged $1.7 billion (MVR 26.2 billion) through banks. This increased the dollar exchange ratio to 21 percent, up from the previous range of 9 to 15 percent.
Despite these measures, the value of the dollar has not decreased, with the black market rate currently reaching MVR 22.90 per dollar.
