President Dr Mohamed Waheed has claimed the country will be in a position to restart development projects next year as a result of his government repaying millions of US Dollars in bills incurred through the previous administration’s borrowing.
The government announced it would be suspending state-financed development projects in April after exhausting its annual budget for recurrent expenditure (including salaries, allowances and administration costs) in the first quarter of 2013.
The current government has continued throughout the last year to try and establish loan and credit facilities with foreign nations and banks for the stated purpose of “budget support”.
However, speaking during a campaign rally in Noonu Atoll this weekend, President Waheed was quoted by Sun Online as claiming that unpaid bills arising from the government of former President Mohamed Nasheed had now been settled, with no expense expected to be carried over to the 2014 budget as result.
“We have been through a very difficult time over the past two years. We could not do several things, not because we didn’t want to do them. The previous government left the country bankrupt,” he said during the rally.
“The money necessary to buy medicine for our children, the money necessary to repair the school building, the money necessary to repair the harbour of this island – all this money had to be repaid, the unpaid bills for work done by citizens, had to be paid.”
Finance Minister Abdulla Jihad and Minister of Economic Development Ahmed Mohamed were not responding to calls today, while Minivan News was awaiting a response from President Waheed’s Senior Advisor Teresa Wells at time of press.
Former administration’s borrowings
Ahmed Nazim, head of the Parliamentary Financial Committee and MP for the government-aligned Progressive Party of Maldives (PPM), said that former President Nasheed has undertaken “short-term borrowings” during his time in office.
He added that this borrowing included “US$200 million bond” sold to the Indian government with a maturity of one year that was later extended to 24 months.
Nasheed controversially resigned from office on February 7, 2012, following a mutiny by sections of the police and military.
Following the change in government, Nazim said that the Waheed administration had paid US$100 million and “settled the full payment” after Indian authorities requested the country be reimbursed by February 2013.
“Since this was a substantial component of the total foreign debt, [foreign borrowing] has come down because of this,” he said.
Asked whether the committee believed President Waheed had managed to reduce total state borrowing and spending since coming to power, Nazim said he would respond by tomorrow ( August 18 ) after having time to study relevant statistics.
In 2012, President Waheed reportedly said he would not resort to borrowing from foreign governments in order to finance government activities.
However, the government has since sought a number of foreign loans to supplement the state budget.
Earlier this month, the state requested parliament approve a US$29.4 million loan from the Bank of Ceylon to finance the 2013 budget approved by parliament.
In July, the President’s Office confirmed discussions had been held with Saudi Arabia, seeking a long-term, low interest credit facility of US$300 million to help overcome “fiscal problems” facing the nation.
Supplementary finance plans
Finance Minister Jihad claimed back in December 2012 that the MVR 15.3 billion (US$992 million) state budget approved by parliament might not last until the end of 2013 – requiring supplementary finance for the state.
In April 2013, Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditures.
Jihad warned that government offices and independent institutions might be unable to pay salaries or electricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).
“Reckless financial management”: MDP
In July, Maldivian Democratic Party (MDP) MP and Spokesperson Hamid Abdul Ghafoor said that the heavily partisan parliament now effectively controlled state finances as a result of former opposition politicians – now part of President Waheed’s government – imposing tighter spending restrictions on former President Mohamed Nasheed’s administration.
The opposition party also accused the current government of reckless financial management, pointing to a potential US$1.4 billion compensation bill facing the state after it decided last year to abruptly terminate a US$511 million airport development contract agreed with infrastructure group GMR.
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What a joke. Waheed claiming his after the GMR debacle and tourism tax u turn. Wat a liar. What a mess. He can not be trusted.
“The money necessary to buy medicine for our children, the money necessary to repair the school building, the money necessary to repair the harbour of this island – all this money had to be repaid, the unpaid bills for work done by citizens, had to be paid.”
So, what money was used to build flats for a select group of Policemen? What money was used to pay for the increase in Police and military personnel? And who paid for their free medical care abroad? Did all this money fall from the sky?
Where did all the millions that are spent on this guys tours around the country come from? Where did the money to pay for his state ministers, state-of-the-state ministers, deputy state ministers, deputy-of-the-deputy state ministers come from? Coconut trees, perhaps?
Waheed, stop talking out of your ar*e!
"Following the change in government, Nazim said that the Waheed administration had paid US$100 million ..."
Oh, and are we supposed to believe what Jangiyaa Nazim says? That US$100 million dollar sum came from the state reserves! Idiots.
Waheed seems to be a desperate man with no real plan. Always some escuse.
Excuse
The photo of Waheed accompanying the news article shows him with an un-flexed right fist that is tight and exerting immense force. This shows that his holding of the baby is pretty artificial and that there is no softness in him.
He is also not communicating with the baby. This is supported by the fact that he has no eye contact with the baby. Instead, he is forcing himself to show a huge artificial smile to the camera, which tells me that he is exploiting the innocence of a toddler for his political gain.
Mr Waheed: do you think you will be able to pay the bills for your irresponsible and barbaric act of annulling the GMR contract which is slated to be in several billion rufiyaa as compensation to them? You've destroyed investor confidence and returned our airport to the ballidhee airport
Forget waheed. Think Yamin.
Short term borrowings were necessary at the time. The government's coffers were empty. We had to live from day to day. Hand to mouth. Blame the 2008 budget and its promoter!
Same thing applied to President Nasheed when he took over from Gayoom in 2008 as well. There were so many outstanding bills that had to be paid even then. That is part and parcel of running a government, institution or a business. Waheed doesn't seem to be aware of this. Even when he leaves, there will inevitably be outstanding bills that had to be settled by the subsequent government. What about the USD 1.4 bn that is likely to be paid for GMR's compensation?? who is going to foot the bill?
What about all the money he is wasting now on all political appointees ? Anni will have to repay the loans waheed is taking to fund all this.
Man hasn't got a clue. Tell topi to take over
You are wasting money on the SIFAIN. My hard earned money..