Maldives-US to Sign Investment Promotion Agreement

Thursday, March 11th, 2010

The Maldives and US Governments today committed to sign a new bilateral agreement promoting US private investment in the Maldives. Once signed the Investment Incentive Agreement (IIA) will allow US companies to access financing (from large structural finance to small business loans), political risk insurance and investment funds from the United States Overseas Private Investment Corporation (OPIC) in order to allow them to invest capital and skills in the Maldives. Already a number of major US firms have made provisional enquiries with OPIC and the Foreign Ministry regarding investment opportunities in the Maldives.

The commitment to sign the IIA follows over a year of behind-closed-door negotiations conducted by the Permanent Mission of the Maldives in Geneva. The possibility of strengthening investment relations was first raised by the Minister of Foreign Affairs, Dr. Ahmed Shaheed, and Mr Richard Boucher, then Assistant Secretary of State for South Asian Affairs at the State Department during the Minister’s visit to the US in January 2009. Political commitment was then secured through an exchange of letters in August 2009 between Minister Shaheed and Secretary of State Clinton.

The actual commitment to sign the accord was dependent on the Maldives re-establishing its eligibility to benefit from the US Generalised System of Tariff Preferences (GSP). Under GSP, only countries with strong democratic institutions and human rights safeguards can benefit from preferential US trade and investment relations. The Maldives had been suspended from GSP eligibility in 1995, due to US concerns over the previous Government’s human rights record – putting Maldivian exporters at a huge disadvantage compared to their competitors elsewhere in Asia and around the world. However, in December 2009, after the new Government had officially reapplied for GSP status, the request was granted based on the much improved human rights situation in the country. This in turn made it possible to finalise negotiations and sign the IIA.

The IIA will be signed on 15th March by the Minister for Economic Development Mohamed Rasheed and the US Ambassador to the Maldives Patricia Butenis.

Speaking ahead of the signing, Minister Shaheed said:

“Signing the IIA is significant for two reasons. First, it represents yet another milestone in the increasingly warm and rapidly-evolving bilateral relationship between the US and Maldives. Indeed it is my expectation that the relationship will gain further strength over the coming year as the Maldives applies to work with the US Millennium Challenge Corporation. Secondly, this agreement is hugely important for the Maldives economy as it will provide a timely boost for overseas investments into the country. From now on, US companies across a range of sectors will be able to access preferential financing to allow them to invest in the growing Maldivian market. Indeed, the Foreign Ministry has already been contacted by a range of world class American firms keen to access OPIC financing and to work in the Maldives”.

“The IIA, following hot on the heels of GSP reinstatement, represents yet another example of the Government’s foreign policy delivering real results those in-turn produce tangible benefits for the Maldives economy and the Maldives people”.

Reader Comments

  1. This particular GSP is like a curse if we depend on it heavily. GSP will allow Sri Lankan companies to come and setup garment factories as it was before. They reap the benefit, as all labor and raw materials are from them. We get a nominal loyalty and they rip-off our right to benefit from GSP. In addition, once and if we are inclined to depend on GSP heavily, US and other western powers will interfere and we will have to accede to their demands….

    Posted by saywhynot | March 12, 2010, 12:19 am

Post a comment

 characters available



The opinions expressed here are those of the individual authors and commenters and do not necessarily represent the views of Miadhu News Daily. We do not take responsibility for the opinions, facts, or claims presented by individual authors or commenters, and reserve the right to moderate or delete inappropriate comments.

Miadhu Opinion Poll
  • Sorry, there are no polls available at the moment.