Government income has to be doubled to create fiscal space for increased capital expenditure and investment for development opportunities, President Mohamed Nasheed said in his radio address yesterday.
Speaking on the cabinet decision last week to incentivise voluntary redundancy in the civil service, President Nasheed reiterated that facilitating more attractive and higher paying employment opportunities for civil servants and government employees remains “a major goal for the government.”
“Development opportunities are going to be very limited if a large part of state revenue is recurrent expenditure,” he said. “We have to increase capital expenditure. The best way is to exponentially increase government income.”
While revenue was increasing year by year, Nasheed continued, current levels of annual income have to be “doubled” to make fiscal space for capital investments.
“It will take time for the state to reach that level,” he added. “It is necessary for the government to maintain recurrent expenditure at a certain level to reach [the goal]…The government’s purpose, or objective, is to find ways for employees to improve their standard of living.”
Under the scheme launched by cabinet on Tuesday, civil servants and government employees will be eligible for one of four retirement incentive packages: no assistance, a one time payment of Rf150,000 (US$11,700), a payment of Rf150,000 and priority in the small and medium enterprises loan scheme (for those 18-50 years of age), or a lump sum of Rf 200,000 (US$15,600) and priority in government training and scholarship programmes (for those 18-40 years of age).
Government employees above the age of 55 who retire voluntarily will be given the same benefits as those released by the Civil Service Commission (CSC) at the mandatory retirement age of 65.
The deadline to apply for the programme with the Finance Ministry is May 31, 2011.
Austerity battles
In August 2009, the government’s decision to implement austerity measures to alleviate the crippling budget deficit – including unpopular pay cuts of up to 15 percent for civil servants – was met with protests and fierce resistance from opposition parties and the CSC.
President Nasheed announced at the time that the government planned to halve the 32,000-strong civil service by 2011 through redundancies and transfer of employees to corporations.
While the President stated that the civil service should be composed of no more than 18,000 well-paid and qualified staff, CSC Chair Mohamed Fahmy told Minivan News last week that the commission currently has 19,000 permanent staff.
At the height of a protracted legal dispute between the CSC and government last year, the parliament-appointed independent commission was accused of attempting to topple the government and “plunge the Maldives into chaos.”
International organisations such as the International Monetary Fund (IMF) and the World Bank meanwhile insist that reckless expansionary fiscal policies from 2004 onward that saw doubling expenditure on salaries between 2007-2009 crippled the economy.
“The Maldives faces the most challenging macroeconomic situation of all democratic transitions that have occurred since 1956,” read a World Bank report in March 2010.
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Mr President..! I support your courageous work in bringing some kind of democracy to our tiny nation, but I also have to tell you that I'm deeply disappointed for the fact that you are failing to improve the economy which is the real engine for us to be able to have a good life. We are terribly suffering, Mr.President!!
Dear Hussain Wisaam....Mr.President doesn't care about you or me...hes in power, his life is secured..he'll be way rich even if he steps down..the corrupt cronies around him are getting richer day by day..robing you and me..robing our shared future..so that Mr.President and his cronies can live a happy fulfilling, financially secure life...All this yellow man cares about is his party, his power, and smooth transition of power to a trusted aid in another 7 years time..maybe to Zaki...While you and me and the Maldives that we love will be left in the ruins..and they will be filthy rich..our freedoms will be lost for another generation...I pray to god that our country be cleaned of these men in yellow
One of the most expensive places in the world for tourists with around 100 hotels/resorts, some serving the (filthy) rich and famous and with a 300,000 local population.
Where's the money?
@dolarey
"Where’s the money?"
What a stupid question! The money goes to the resort owners and their followers. Guess who you elected to Parliament? That's right. Those are the ones receiving all that money! Didn't think about that when you voted for them right?
I feel nauseating now when I see this guy on TV and repeatedly boasting what he will do.
@Ekaloa
You may feel nauseated as you realise that your demigod is not returning to power. People like you are trapped in time and space. An election defeat is not a bad thing, after all.
“We have to increase capital expenditure. The best way is to exponentially increase government income.”
Dear Mr. Miracle President, Please do this and show to us.
our president is all talk and doing nothing except giving high paying posts to his activist friends. whatever he saved from the cuts of civil service pay he gave to his party activists under different names. what a pathetic man! what a big blatant liar!
No matter what color - yellow or blue - lets put that aside for a while. What Maldives need, is in fact higher revenue and income to answer the demand from the public. There are very few ways to do so - especially if so high percentage of the population is going to be hired and working for the government. They have to be payed in one way or the other. Other countries pay high taxes from their income and business revenue to finance the state - that will one day also be the reality here in Maldives - mark my words. And no matter who is sitting with the power on the top and have seat in the parliament - make sure that is competent and knowledgeable people who is clean from corruption are are taking their responsibility in the best interest for the nation and its people. A general good advice: Stop pointing fingers and use the time well towards 2013 and who you want to lead you for the coming 5 years. And make no mistake - no matter who it is - he or she cannot make results over night. But he or she must have a plan, follow the plan and set the plan into actions. To achieve that - politicians must irregardless of color - see the best interest of the nation be fulfilled. That means that cooperation, compromises and joint efforts in various issues have to happen (without the money for govern is ending in someones pocket....) also - tourism prefer political stability - without it, you might end up with nothing....then what???
NASHEED cannot double the revenue unless we are willing to introduce a renters tax. This might increase the already high rent.
So what are you going to do about it ? Guess will sell off more of the countries assets hehehe finally we'll see the " sold out" board.
How about reducing the government expenditure by half?
Would it not be the easier alternative since Maldivian economy is based on import rather than export revenue?
President Nasheed, i believe you have failed in all aspects of governing a country.
Resignation would be the ideal step towards "Anneh dhivehi raajje"
G'day
@Frozen: I agree with you.
There are so many ways the government could increase its revenue without inflicting indirect taxing through utility services fees, rocketing prices, etc.
The country could have developed had you incorporated ideas of people in business from all parties without any discrimination. Unfortunately, divisions based on political attachments is growing and hatred between the poor and the rich is developing, the youth are jobless and rehabilitation program has been a total failure. Justice system is now just a joke allowing gangs to rule the streets at will. Are we adapting the Somali way of life?
The problem Mr. President is that, people around you either don't have the ability to function, are still having political agendas or simply still in war with previous government for personal reasons. Most have failed you and for you not to rectify that, you failed yourself and the country as a whole.
In USA, they blame Obama's policies that favor major corporations and the rich. Today, it is evidently not different, as the rich and corrupted are still protected and favored by law.
I will give you an idea how you will make MRF 3million per month from nothing without taxing anyone of putting any pressure to any business.
HULHULE BONDED WAREHOUSE (under customs due to liquor and pork) HAS ABOUT 300 CONTAINERS SITTING ON AN EMPTY PAVED GROUND. THE RENT PER MONTH IS OVER A MILLION RUFFIYYA WHICH GMR IS BENEFITING. GMR PLANS TO INCREASE CONTAINER RENT BY 100% MEANING DOUBLE THE REVENUE.
THILAFUSHI IS A FREE ISLAND BUILT OF NOTHING BUT OUR GARBAGE. MR. GASIM HAS SIMILAR BONDED WAREHOUSE IN THILAFUSHI SUPLLYING RESORTS. THE ISLAND HAS SPACE, IT IS CHEAP AND THILAFUSHI COPORATION WILL BE HAPPY TO SET SPACE TO ACCOMMODATE THESE CONTAINERS.
WHY DONT YOU MOVE THE BONDED WAREHOUSE TO THILAFUHSI AND LET THE OPERATORS PAY THE SAME FEE WITH SAME FACILITIES? WHY ARE YOU LETTING GMR INCREASE RENT WHICH WILL AFFECT OVERALL PRICING ENCOURAGING RESORTS TO IMPORT DIRECT? THE GOVERNMENT AND MALDIVIANS WILL ENJOY THIS FREE MONEY THAT, NOW IS GIVEN TO A FOREIGN MULTI MILLION CORPORATION!!!!!!
Mr. President, you do not need magic, Maldives doesn't need consultants. First remove incompetence in your ranks, deal with proved corrupted people or bodies, and sit down with the people and listen to what they want.
Thank you for controlling the brown sugar and alcohol situation to an extent. But you forgot, may be not you, but your concerned ministers and offices forgot to deal with INTERNET DRUG problem.
If you have a child crazy over computers or internet, please look closer, thats the beginning of a disease that is costing parents a lot, and soon the country...but you youth team doesnt have a clue about this but further promote this idea logy. Pay a visit to the youth center and sure you will fire your state minister immediately