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CSC asks govt to restore civil servants’ salaries

The civil service commission (CSC) has sent a letter to parliament requesting civil servants’ wages be restored to their former levels as the proposed mid-term 2010 budget anticipates a revenue of more than Rf7 billion (US$544 million).

CSC Spokesperson Mohamed Fahmy Hassan said a similar letter was also sent to President Mohamed Nasheed, reminding him of his remarks in October.

In his weekly radio address, Nasheed said civil servants’ pay cuts were a temporary measure and would be restored once the economy recovered and the government had increased its revenue beyond Rf7billion (US$544 million).

“The president’s message was very clear. In this case where so many are involved and it’s a promise that he made…I am very sure that in January they will be given their full salaries,” said Fahmy.

Ismail Shafeeq, permanent secretary of the finance ministry, said that according to the law, the finance ministry has to review the pay cuts every three months with the next evaluation coming at the end of the month.

Projected Revenue

Addressing MPs last week, Finance Minister Ali Hashim said the projected revenue for 2010 was Rf7.3 million (US$568 million).

Measures to increase government revenue, including the introduction of new taxes such as corporate tax and a goods and services tax to be imposed on tourist resorts, are still awaiting the passage of legislation in parliament.

Speaking to Minivan News today, Mohamed Zuhair, president’s office press secretary, said civil servants’ salaries would only be restored
when the government’s revenue “physically” reached Rf7 billion (US$544 million).

“If we reach it by September then September we will do it,” said Zuhair.

Acknowledging that the government may not reach its expected revenue, Fahmy said civil servants’ salaries should only be reduced if the government fails to attain its target.

In August, the government unveiled a raft of austerity package to help ease the budget deficit. Measures included pay cuts of up to 20 per cent for civil servants, a reduction in overtime as well as cutback on foreign travel.

The pay cuts have sparked outcry and several protests among civil servants and opposition groups who have accused the government of economic mismanagement.

“We will hold another demonstration on 10 December outside the finance ministry to back up the commission,” said Abdullah Mohamed, spokesperson for the civil servants’ association.

“We believe this damage was done to civil servants as a punishment and if there really were special economic circumstances, members of parliament and independent institutions too should have taken a pay cut,” he added.

Last month, an informal meeting of MPs on pay cuts ended in a heated argument after opposing parties accused each other’s government of mishandling the finances. All MPs Minivan News spoke to said they would be willing to take a salary reduction.

Pay cuts for independent institutions came into effect this month.

Overtime

In their letter, the commission also noted that civil servants asked to work overtime should be paid accordingly.

“If and where and when they are asked to do overtime, they are entitled to be paid overtime under the employment law,” said Fahmy.

He added that the CSC had received “lots of complaints” from civil servants who had been asked to work overtime but had not been paid.

“The work should be organised in such a way so that nobody should do overtime. In very specific cases where it’s needed to complete a
crucial task then that person has to be paid,” he said.

Zuhair said the government’s policy was that overtime should not exceed 15 per cent of the total hours worked and that all staff
working overtime should be paid.

If this was not the case, he continued, civil servants “should just refuse to work overtime.”

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Opposition MPs accuse govt of favouring MDP voters in budget

Funds were disproportionately allocated for public sector investment programme (PSIP) in next year’s budget for constituencies represented by MPs of the opposition Dhivehi Rayyithunge Party-People’s Alliance (DRP-PA), Mulaku MP Abdullah Yamin said at parliament yesterday.

Speaking at the budget debate, Yamin said approximately Rf25 million (US$1.9 million) was allocated for areas that voted for the opposition, while Rf121 million (US$9.4 million) was allocated for constituencies represented by the ruling Maldivian Democratic Party (MDP).

“I don’t think this a coincidence. I don’t believe at all that this could be a coincidence,” he said, adding the Rf530 million (US$41 million) for the PSIP was a fraction of the Rf11.9 billion (US$926 million) budget.

Yamin strongly criticised the government’s reliance on public-private partnerships (PPP) to deliver on development projects, claiming they were unlikely to materialise.

Other opposition MPs objected to the lack of funds allocated for development of the atolls.

Kelaa MP Abdullah Mausoom of the DRP said funds were not allocated for small businesses or development of fisheries and the construction industry.

MPs of the ruling MDP defended the budget, arguing development projects would be undertaken under PPPs.

Presenting the budget last month, Finance Minister Ali Hashim said the budget had the confidence of the International Monetary Fund (IMF). If the mid-term budget was implemented, he added, the deficit would decline to 14.8 per cent in 2010, 2.4 per cent in 2011 and reach a surplus in 2012.

The structure of the budget was agreed upon after consultations with the IMF, he said, and included recommendations by the IMF, Asian Development Bank and World Bank to solve structural problems in the economy.

Kendhoo MP Ahmed Thasmeen Ali, parliamentary group leader of the DRP, said yesterday the budget did not reflect the government’s stated policies.

Although the government had constantly urged reduction in government expenditure, he said, the expenditure for 2009 as well as the projections for 2010 exceeded the previous year.

Reductions were made to public sector investment by almost Rf900 million (US$70 million) from the previous year, he noted, while subsidies for electricity and food were lower by Rf300 million (US$23 million).

While the government’s policy was to reduce the number of government employees and civil servants had a pay cut in October, he continued, the expenditure on salaries and allowances for government in next year’s budget was Rf300 million (US$23 million) more than this year.

He urged the budget committee to identify the areas the funds had been increased for.

Thasmeen noted that funds allocated for salaries and allowances for employees of independent institutions were also lower than previous years.

Further, the budget for parliament was 16 per cent smaller than this year.

“We have to consider what kind of difficulties we will face in our task of holding the government accountable and responsible,” he said.

Thasmeen criticised the government for unilaterally reducing salaries for staff at independent institutions in next year’s budget.

The budget for the Human Rights Commission Maldives was decreased by 14 per cent and the Anti-Corruption Commission by 12 per cent, he said.

In the judiciary, the budget for the Supreme Court was lower by 33 per cent, the High Court by 42 per cent and island courts by 20 per cent.

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Dissolving IDCs an undemocratic power grab, says DQP

The government’s abolition of the Island Development Committees (IDC) is a blow against democracy in the Maldives, the Dhivehi Qaumee Party (DQP) has said.

“This is a mockery of the public and the Constitution,” the party said, “and more a feature of autocratic rule than democracy.”

The Maldivian Cabinet dissolved the IDCs – elected bodies of five to seven members, functioning like a local council – last month after
courts ruled they had no legal authority under the new constitution.

Government-appointed advisory boards will administer the islands until local councils can be elected, assuming a decentralisation bill (currently at committee stage) is passed by parliament.

“We think this is a step backwards for democracy,” said DQP Secretary General Abdullah Ameen, who accused the government of strengthening its territorial control through autocracy.

“Even during Gayoom’s time the IDCs were the only institutions where people on the islands saw democracy practiced, and were among the only democratic institutions in the country,” he said.

The move, claimed independent MP Mohamed Nasheed on DhiTV last night, amounted to “burying democracy in the islands”.

Under the terms of the constitution, the elections of island, atoll and city councils were to be held before July 1, 2009, in order to provide for decentralised administration of the country.

Instead, argued the DQP, the government had not only missed the deadline but was using the dissolution of the IDCs to claim island assets such as powerhouses for privatisation.

“Dismissing the IDCs and appointing advisory boards doesn’t accomplish anything,” Ameen said.

The deadline for the local elections elapsed after the parliamentary election was postponed from February to May because MPs failed to pass the necessary legislation.

Deputy Home Minister Ahmed Shafeeq acknowledged that island assets were currently being valued through the courts before being handed over to utility companies, but said the government was waiting for the”new rules and procedures” in the decentralisation bill to be implemented before establishing elected and salaried island and atoll councils.

“After the new constitution was introduced the Island Development Committees were no longer lawful – and that’s a problem for such an institution,” he said.

“They have no legal basis and we can’t just [continue] as if they do,” he added, explaining that the government-appointed advisory boards were only a temporary measure.

Besides dissolving the IDCs, the cabinet decided to allow the development of tourist guest houses on inhabited islands in the hope of generating additional income from visitors.

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Government launches issuance of US dollar treasury bills

The government today launched the issuance of US$100 million worth of treasury bills to the State Bank of India (SBI).

At a ceremony this morning, Aishath Zahira, deputy governor of the Maldives Monetary Authority, said it was the first time a security denominated in US dollars was being issued.

“This ceremony marks a new beginning, the first issuance of treasury bonds (t-bonds) in the history of Maldives and hopefully a new chapter in the Maldives’ securities markets and the finance market as a whole,” she said.

“Treasury bonds are to be issued to the commercial banks licensed in the Maldives. The treasury bonds are securities issued for a longer term, one to 15 years and beyond. The bonds will be coupon bearing bonds and hence some of the bonds will be sold at discount and others at a premium.”

She added that issuing the bonds marked an important step for the country’s financial evolution and graduation beyond the status of a ‘least developed’ country.

In August, the MMA began open market operations – selling government securities to control the money supply – to alleviate the dollar shortage.

“As a result of the open market operations, the amount of money circulating in the economy will decline, aggregate demand will fall, inflation will decline and the dollar shortage will be eased,” said MMA Governor Fazeel Najeeb in a statement to the press in September.

The main purpose of the operation was to remove the excess local currency in the economy, he said, which resulted from the MMA printing money to give out loans and overdrafts to the government to plug the budget deficit.

Zahira said today the MMA was the government’s agent for raising funds for financing the budget through the issuance of government securities.

“In Maldives, treasury bills were first introduced on 10 September 2006, as the first government security and with a minimum face value of Rf1 million.

At present, treasury bills are issued on a tap system with maturities of one month and three months at a fixed interest rate of 6 and 6.25 per cent per annum,” she said.

“Presently, the t-bills market is open to all commercial banks in the Maldives and state owned enterprises and their subsidiaries. The MMA acts as issuing and paying and advisory agent for the government and carries out weekly issuance of treasury bills on every first day of the week with the settlement process carried out on the next day.”

Zahira said the present securities market of the Maldives was not yet fully developed and the MMA was currently working towards issuing t-bills and t-bonds on an auction basis.

“MMA hopes that this would establish a market rate for securities which could then be used in financial transactions. MMA also hopes to expand the investor base for government securities by introducing lower denominated t-bills and t-bonds and allowing other private institutions and individuals to participate in the primary and secondary market in the near future. This could create a competitive market for t-bills and t-bonds and also encourage public savings.”

At present, the SBI was the sole subscriber for the treasury bills.

The Male’ branch of SBI began operations in February 1974 as the first commercial bank in the country.

It currently has branches in Addu atoll Hithadhoo and Alif Dhaal Maamigili. It is also the second largest bank in the country in terms of assets.

In his remarks, D M Muley, the Indian High Commissioner, said there had been a “qualitative and quantitative upward swing” in India-Maldives relations since the new government came to power last year.

The SBI was “an unsung hero” in the bilateral relations between the two countries, he said.

“I must at this moment remember the vision of Mrs Gandhi, who said before I visit Maldives, I would like my bank to be present there,” he said, adding today was a celebration of her vision over 44 years ago.

At the function, the award of service to SBI was presented by Ahmed Assad, state minister of finance.

At a press conference after the function, Assad said the main purpose of the sale of t-bills was to cease obtaining loans and overdrafts from the MMA to finance the budget deficit in favour of debt instruments.

The other objective was to ensure that fiscal and monetary policy was independent. “Because of this the MMA will get the space to implement the monetary policy,” he said, adding MMA will now be able to use monetary policy to control inflation.

Treasury bonds and bills will expand the financial market, allow the public to participate and investors to manage their savings.

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Head of Indian coastguard visits president

The director general of the Indian coastguard visited President
Mohamed Nasheed yesterday.

Vice Admiral Anil Chopra is on a visit to inspect the annual
Maldives-India coastguard exercise which will be held from the 1 to 4
December.

During the meeting, the president said the joint training exercises
were highly useful to the Maldives and thanked the Indian government
for conducting the exercises.

The pair further discussed the threat of pirates in the Indian Ocean
and noted that the joint training programmes would help enhance
bilateral relations that existed between their respective countries.

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French ambassador visits president

French ambassador Mr Michel Lummaux paid a farewell call on President
Mohamed Nasheed yesterday.

The president thanked Lummaux and the French government for their
support in ushering in democracy to the Maldives.

He added he hoped France would continue assisting the Maldives in
consolidating democracy in the country.

Nasheed said French President Nicolas Sarkozy’s contribution was
essential in reaching a resolution on climate change at the
Commonwealth Heads of Government Meeting in Trinidad and Tobago.

Last week, Commonwealth heads met for their two-day annual meeting.
They were joined for the first time by non-Commonwealth leaders
Sarkozy, the Danish prime minister and the UN secretary general.

Nasheed said the resolution renewed hope of reaching a climate change
treaty at the summit on the issue in Copenhagen later this month.

Lummaux told the president France would continue to assist the
Maldives and was aware of the vulnerability of low-lying nations such
as the Maldives to climate change.

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Swine flu testing to resume

The centre for community health and disease control has said testing
for swine flu would resume at the Indira Gandhi Memorial Hospital
(IGMH) from last night onwards, Voice of Maldives reports.

The test has not been available at the state hospital due to lack of supplies.

An official from the health sector said people have tested positive
for influenza A in the capital as well as Haa Dhaal, Shaviyani, Noonu,
Raa, Baa, Alif Alif, Vaavu, Meemu, Thaa and Gnaviyani atolls.

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Villa College to offer masters programme

Villa College signed a MoU yesterday with Malaysia’s Open University
for a masters of education programme in the country, Voice of Maldives
reports.

The college said the main purpose of the MoU was to offer the masters
degree course to allow students to complete the qualification without
having to go abroad.

The programme is aimed at school principals, administrators and policy
level officials in the education sector.

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