In its pre-election assessment report for 2023, Transparency Maldives has voiced concerns about the potential use of state-owned companies in influencing political activities and elections. According to the watchdog organization, over the last one-and-a-half years, around 15,000 jobs have been created by these state enterprises.
Transparency Maldives noted that the number of employees in state-owned companies has surged from 10,000 in 2021 to an estimated 25,000 this year. The organization has raised questions about 'governance risks' involved in the operation of state companies, suggesting that there could be political and electoral malpractices through these enterprises.
These potential risks include the political influence in the appointment of boards of state-owned companies, and possible electoral gains through board members. Transparency Maldives also expressed worry about the link between the government, political parties, and the management of these companies, stating that it may lead to unethical hiring practices.
A lack of transparent and robust corporate social responsibility (CSR) rules, according to Transparency Maldives, increases the likelihood of political malpractices in funding activities across the nation. Furthermore, 'internal risks' such as ineffective risk management systems in some companies and consideration of internal barriers during procurement and projects can contribute to these malpractices.
The organization also pointed to a study conducted this year, which revealed that the level of transparency in corporate governance systems of state-owned companies was low.
Since 2019, the Information Commissioner's office has received 64 right-to-information complaints against 25 state-owned companies. This data emphasizes the challenges in obtaining information from these companies and the accountability problems within the established institutions overseeing state-owned enterprises.
Transparency Maldives' report also highlighted the potential establishment of a patronage and clientalist system through state-owned companies, which would systematically pave the way for political and electoral abuses by the ruling party. "The government and independent institutions have made it easier for state-owned companies to go for this mission," the report quoted.
There have been instances in the past where state-owned companies have given jobs and promotions ahead of elections, and used company resources for campaigning. Transparency Maldives' report urges a review and strengthening of governance systems to prevent any potential abuses in the future.