The Maldives offer high investment potential despite its geographic size. For example, its exotic composition of almost 1,200 coral islands along the major sea lanes in the Indian Ocean presents untapped opportunities for tourism and all forms of related infrastructure. However, like its other South Asia neighbors, it can be a complicated country to do business.
In the latest installment of our M&A Spotlight Asia series — Maldives: Impact of Political Turmoil on Business — we discussed investment opportunities in the tourism and infrastructure sectors as well as the risk factors that prudent investors must consider ahead of any deals in the nation.
In this post, we update readers on recent developments and provide additional insight into those areas where investors should focus their due diligence.
Political turmoil unabated
Political turmoil surrounding the imprisonment of former President Mohamed Nasheed on terrorism charges has not abated. The government continues to maintain an unyielding position,* rebuffing legal appeals from the ex-president as well as from the United Nations and pro-democracy countries which have been approached by the opposition party to intervene. Adding fuel to the fire was the arrest of three opposition leaders and nearly 200 protesters in early May. While no demonstrations or protests are expected during the holy month of Ramadan (June 17-July17), there is no guarantee that the tenuous peace can withstand further efforts of the government to quell opposition.
Due diligence should focus on key stakeholders
In our analysis of the Maldives business environment, one of the things we talk about is the critical importance of identifying key stakeholders as part of an investor’s due diligence. But, who specifically should investors focus on?
To make a winning investment in the Maldives, one must have a clear view of both the macro economic/political forces at work as well as the on-the-ground, everyday realities of doing business. Kroll has served clients in this region for decades and has not only developed numerous reliable sources despite the region’s periods of instability, but also established relationships with independent individuals and organizations who can corroborate or clarify various findings. Within such a volatile environment, it is critical that investors have the most current and nuanced findings ahead of making any deals in the Maldives.
*The government recently moved former President Nasheed from prison to house arrest for a period of eight weeks citing medical reasons, indicating a softening stand from the government.