It has been reported that the Maldives has been inhabited since or around the 5th century BC. While different accounts claim different origins of the first settlers, many believe that it was either Buddhists reaching from Sri Lanka or India or exiled pirates from the region who were the first inhabitants of the tropical island nation.
There is no denying that there are several interesting tales found in the pages of the history of Maldives. This story is about one such chapter from the country’s rich and interesting history; it is about the Borah Merchants.
A lot has been said about a time in the Maldives when almost all foreign trade was under the grips of Borah Merchants who had sailed from neighboring India. However, a recent deep-dive into the topic bore fruitless results since there have been insufficient details about the traders and their time in the Maldives.
According to Shafeenaz Abdul Sattar, in her dissertation “Maldives: Trade, Economy and International Integration” (published in the Maldives Economic Review, Volume 1, Issue 1, 2019), traders were already established in the country around 1887. She also wrote that around this time foreign trade in the Maldives was almost in the hands of the Borah traders.
It was also reported that only four out of the 28 vessels owned by Maldivians for transporting goods in and out of the country remained by 1887, and even those four were used by the Borah merchants. The merchants had also set up seven large shops and another 10 shops for small businesses “from Galle in Male’ at the time, which were state-owned and let at rents of between 15 to 20 rupees per month” according to Rossett (The Maldive Islands, The Graphic, 1886). The outstanding debts to these businesses amounted to about MVR 50,000 to MVR 60,000 (Naseema Mohamed, Dhivehi Raajjeyge Radhunnai Ranin, Dhivehi Bahaai Thaareekhah Khidhumaiy Kuraa Qaumee Marukaz, 2010). Around this time, the state revenues amounted to around just MVR 30,000 annually, and such revenues were for the most part dependent upon Customs duties on imports during those days while no such duties were levied on exports (Abdulla Mufeed, Kureege Viyafaari aai Baazaarumathi, Novelty Press, 2004).
According to H.C.P Bell, the Maldivian government had sought an agreement with the Borah merchants to make an annual payment of 100,000 rupees annually as a condition for waiving all customs duties. However, due to several complications, only one merchant from the entire merchant entourage agreed to the proposal upfront.
Bell also wrote that, not long after the Maldivian government and merchants faced this impasse, successive fires incident – termed locally as Bodu Hulhu (meaning: Great Fire) – occurred in Male’ in which all merchant shops along with the financial records kept in those shops, warehouses, and several personal properties of the locals were destroyed.
The matter would take months to resolve while British government officials stationed in Ceylon back then, had to intervene in investigating the proceedings on “accounts of complaints received from the Indian and Ceylonese merchants”.
Additionally, it was reported that the Borah traders dominated much of the inward and outward trade of the Maldives even during the two World Wars. Due to this, the merchants controlled the prices of imports and the price at which they bought export products from the locals.
By the time of the Second World War, a group of foreign-educated young reformists began to gradually take control of the government; one step at a time. They began using their knowledge and influence to implement various interventions, which included price controls, bulk-buying and resale of items, food rationing, providing advice and information on growing food crops and producing more exportable goods, linking distribution or sales of food to productivity, and other income generation activities or gainful employment opportunities.
In December 1942, the Dhivehi Rayyithunge Bodu Store was established under an Act of Parliament. The Bodu Store was operated under the Treasury as an intermediary that made direct fish purchases from local fishermen and sold it to traders. The purchase price of fish from central atolls was set at MVR 25 per hundredweight and from Huvadhu atoll at MVR 35 per hundredweight. The purchased fish were sold to traders at MVR 30 and MVR 40 respectively.
This significant rise in fish purchase price came at a time when Borah merchants had dropped the buying price to just MVR 6 to 7 per hundredweight (Aminath Faiza, Ameenuge Handhaan-1/3, Volume 1, No. 4, 1998).
The Borah merchants would continue to maintain a foothold in the Maldivian economy for 105-long years before they were banned from trading in the country, and were forced to leave.
By the 1960s, owing to more than a century-long presence in the Maldives, the Borah merchants had links to prominent members of the Maldivian society. However, the young members of the cabinet and parliament of that time pushed for the decision to expel the traders. This was not an easy feat to achieve under the then Prime Minister Ibrahim Faamdheyri Kilegefaanu. However, after the prime minister was unceremoniously ousted from his posts, the reign of Ibrahim Nasir as the country’s Prime Minister, which began on December 12, 1957, proved to be ample hour for the Maldivian government to force the eviction.
The British, of which the Borah merchants were subjects at that time, did not attempt to stop the eviction and thus, the traders were eventually expelled from the country.