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Maldives: Mohamed Shihab to lead Maldives on the road to financial ruin

Male', Maldives.
President Nasheed yesterday appointed Mohamed Shihab, ex-Home Minister, as his new Finance Minister. Mohamed Shihab hails from the powerful Shihab clan which supported Nasheed in his bid for the presidency 2008.

Shihab's appointment within a week of the resignation of Ahmed Inaz as Finance Minister. Inaz's resignation came in a turmoil of allegations and attacks against him by MDp leaders and thugs. The day before he resigned, Minister Inaz had been dragged out of car (in which he was meeting opposition MP Abdulla Yaameen) and manhandled into the MDP meeting hall by MDP thugs. The thugs were reportedly led by MDP Vice President Alhan Fahmy. Eye witnesses report that during the whole episode, MDP addressed Ministry Inaz in the foulest language, with aspersions cast on his honor and that of his mother.

However, after tendering his resignation, Minister Inaz noted that he had made his decision to resign prior to the event. Speculation is rife that Inaz's resignation was due to a conflict of opinion between him and President Nasheed with respect to the financial management of the treasury. This speculation is given some credence by the fact that, the State Minister for Finance and Treasury Ahmed Naseer also resigned simultaneously.

Nasheed's appointment of Mohamed Shihab, a man with no financial background, as Finance Minister has raised alarm amongst the business sector and some segments of the populace. Although the appointment can only be validated by approval from the Parliament (Majlis), Shihab will have all the powers of the Minister of Finance until rejected (or approved) by the Parliament in March when it returns from recess.

Mohamed Shihab was rejected by the Parliament in November 2010 for the post of Home Minister. Upon his rejection, Nasheed then appointed him as Political Advisor at the President's Office. Shihab, a leading member of MDP initially, joined Gasim Ibrahim in Jumhooree Party in 2008. He then abandoned Jumhooree Party in December 2008 to rejoin MDP, upon being offered the post of Home Minister to replace Gasim Ibrahim. Gasim Ibrahim resigned as Home Minister citing irrevocable differences between him and alliance partner Nasheed.

Mohamed Shihab also served in various senior positions in the previous administration. He was removed from his most powerful post, head of the Department of External Resources, by Gayoom amidst reports of corruption and bribery in the award and implementation of various foreign funded projects and contracts, notably Japan funded projects. Gayoom however, like Nasheed, needed to keep the Shihab clan close to his administration. As a result Shihab was presented with the post of Managing Director of Maldives Post Limited. Further reports of bribery and corruption by Shihab while in this post, prompted the government to sack him in March 2006. Upon his sacking, Shihab began a vocal opposition to Gayoom in parliament and later joined MDP in opposition.

Shihab, with a tainted history of corruption and bribery, will have a tough time replacing Inaz, a respected career economist. Minister Inaz completed his Degree in Economics at National University of Singapore. He finished his Masters in University of Westminster. Inaz held the post of Director General of Trade Ministry in the Gayoom administration, in charge of trade policy coordination. He was promoted to Minister of State for Economic Development by Nasheed, and then later (April 2010) sworn in as the Minister of Finance and Treasury. He is also the founding member of Transparency Maldives ( Chapter of Transparency International). He is also a visiting lecturer of economics at local colleges for graduate and undergraduate students since 2005.

Mismanaged under Nasheed's first Finance Minister, Ali Hashim, the country's ballooning debt and financial crisis was brought under some control by Ahmed Inaz through tight budgetary control in 2011. In a time of high inflation and economic recession, and with an inflationary budget predicted to bring the country to financial ruin by mid 2012, it will be interesting to observe Mohamed Shihab's performance as Finance Minister.

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