Leaving the grey economy

Informal arrangements have long been the norm for most things in the Maldives. From our date of independence, set to coincide with President Nasir’s visit to his dentist in Colombo to the hustle of everyday business in the modern-day Male’, a certain casualness permeates Maldivian life. Granted, we’ve polished up significantly in recent decades in terms of due process and regulations, especially in the political and corporate spheres, enough to make our easy-going ancestors balk at all the rigmarole.

One of the greatest changes that we’ve seen, much to the displeasure of many a local businessperson, is the increasing omnipresence of the taxman. While informality has long been the norm in business transactions, emerging trends in how money moves around in the economy promises to force us out of the grey economy. One doesn’t have to look too far for the revolution. WhatsApp, increasingly the new Viber in Maldives already offers a payments interface in India where money moves instantly from one bank account to another. And this isn’t just a niche belonging to tech savvy Indians, forecasts show that the digital payments interface transactions will soon overtake cash withdrawals from banks. Since these transactions leave a digital trail it is increasingly difficult for informal arrangements to exist away from the prying eyes of the taxman.

Leaving the grey economy, we argue is a good thing. The informal sector has long created problems ranging as far between bonded labour to just the inconvenience of carrying hard cash and everything in between. We are hopeful that Maldives too will implement a common payment platform and make these transactions ubiquitous.