A crisis of confidence

The Governor of Maldives Monetory Authority Mr. Abdulla Jihad revealed Thursday what many Maldivians knew for a long time. The Maldivian tourist resort owners are keeping their finance outside Maldives and they do it for two reasons.

1) They get better benefits abroad, and
2) Lack of confidence in the Maldives financial system.

In a country that does not have an income tax system, the Maldivian business elites have always enjoyed an unfair advantage over the rest of the population.

Much of the industrial world follows Adam Smith's free market capitalistic theory espoused in 'The Wealth of the Nations' that rests on his explanation of how rational self-interest in a free-market economy leads to economic well-being. Such free markets without certain checks and balances have the tendency to concentrate wealth in the hands of the few as we have seen through out the world, including Maldives. Thus checks and balances are necessary if it is to provide a reasonably equitable distribution of wealth. The fundamentals of economics haven't changed, yet in the face of clear evidence of a growing gap between rich and poor, and with no hope of an escape from poverty for millions of people worldwide, we cannot willingly accept the argument that the economy is best left to market forces.

The maximum amount of wealth of a nation lies in the wealth of its people, everything that the mass of people have. Therefore, it is necessary to structure the economy from the perpective of the consumers. It is important to balance the income gap without giving undue priviledges to the business elites at the expense of the rest of society most of whom are struggling to meet daily demands of life.