Duration: January 2022 – August 2022

Client: TI Maldives

Sample Size: 30 State Owned Enterprises and 8 KIIs

Responsibilities: Documentation, Qualitative Transcription, and Report writing.

Contributed to this project while working at Change Initiative

Executive Summary

Background

State-Owned Enterprises (SOEs) play a pivotal role in the Maldives’ economy, dominating sectors such as tourism (contributing 24.6% to GDP), fisheries, telecommunications, aviation, finance, and utilities. With 34 SOEs—6 listed on the Maldives Stock Exchange (government shares: 28–81.63%) and 28 non-listed (mostly 100% government-owned)—these entities generated over MVR 7.55 billion in revenue in Q4 2018. However, global and local challenges, including political interference, regulatory gaps, and corruption, undermine their performance. This study, conducted under the Strengthening Accountability Networks among Civil Society (SANCUS) project by Change Initiative and Transparency International Maldives, evaluates SOE governance from a civil society perspective, aligning with OECD principles for corporate governance.

Objectives

The primary objective is to assess SOE accountability against existing laws (e.g., Privatization and Corporatization Board Act, Right to Information Act, Companies Act). Specific aims include: (1) identifying levels of transparency, accountability, efficiency, effectiveness, and anti-corruption; (2) determining root causes of challenges; and (3) proposing reforms for improved governance.

Methodology

This qualitative study employed a mixed-method approach for data collection and analysis. Primary data were gathered through 8 Key Informant Interviews (KIIs) conducted virtually via Zoom in February 2022 (sample size: n=8), involving representatives from ministries (e.g., National Planning, Environment), regulatory bodies (e.g., PCB, Auditor General’s Office, Information Commissioner’s Office), development partners (UNDP), CSOs (e.g., Association for Democracy in the Maldives, Zero Waste Maldives), and SOEs (e.g., Road Development Corporation, Maldives Transport and Contracting Company). Semi-structured questionnaires tailored to each stakeholder were used. Secondary data included document analysis of laws, policies, audit reports, media articles, and websites.

Governance was analyzed across nine dimensions (e.g., compliance, capacity, transparency) and 20 indicators using a traffic-light scoring system (green: full compliance=2; yellow: partial=1; red: none=0), aggregated into percentages and grades (e.g., good: >80%; worrisome: <40%). Scores were derived from qualitative responses and secondary sources, ensuring triangulation for validity. Ethical considerations included informant consent and anonymity.

Key Findings

SOEs exhibit systemic governance deficits, with scores predominantly worrisome (e.g., transparency: 25%; accountability: low due to politicized boards). Root causes include absent comprehensive SOE legislation, PCB’s limited oversight (e.g., non-mandatory governance code), cultural secrecy (RTI non-compliance by most SOEs), and corruption in procurement/recruitment (870 cases at ACC, 2017–2022). Financial mismanagement is evident (MVR 7.6 billion capital injections 2017–2021, yet widespread losses; AGO flagged MVR 30 billion issues, 56% SOE-related). Oversight bodies (PCB, ACC, AGO) score unsatisfactory, with minimal fund recovery (0.07% of MVR 2 billion claims). Participation is negligible, eroding public trust (CPI 2021: score 40, rank 85/180). Global parallels (e.g., political capture) are amplified by island-specific constraints.

Conclusions and Recommendations

Findings underscore the need for reforms to balance profitability and social responsibility. Recommendations include enacting SOE-specific laws, mandating RTI compliance, depoliticizing boards, digitalizing processes, and empowering CSOs for monitoring. Future research could employ larger quantitative samples for generalizability. Implementing these could enhance SOE integrity, aligning with sustainable development goals.