Author: Ahmed Naish

EC requests finance ministry to reconsider pay cuts

The Elections Commission (EC) has sent a letter to the finance ministry in protest against pay cuts for their employees, arguing their salaries are already lower than staff in other independent institutions.

EC Vice President Ahmed Fayaz Hassan told Minivan News that there was “widespread dissatisfaction” among staff at the commission.

“While a labourer in the Elections Commission would get Rf4,000 to 5,000 (US$300 to US$400) a month, someone in the same job at the Human Rights Commission would get Rf10,000 (US$800),” said Fayaz. “There’s a huge difference in salaries.”

He added that the interim EC had requested the finance ministry raise the salaries of their staff earlier this year.

In August, the government announced it planned to undertake a series of austerity measures to offset the yawning budget deficit, including pay cuts for civil servants of up to 20 per cent.

Fayaz said that while the pay cuts were reasonable in principle, the EC’s 52 employees were “unhappy” because “they know staff in other commissions get better pay than them.”

He said employees expressed this grievance at a meeting on the new commission’s first day in office but added he did not think any would leave their jobs given the country’s economic climate.

Speaking to MInivan News today, Ismail Shafeeq, permanent secretary at the finance ministry, said it was up to independent institutions to decide upon the salaries of their employees.

“We have nothing to do with that. We have no control over them,” he said, adding he did not think the EC would increase salaries considering the economic difficulties being faced by the country.

But, said Shafeeq, the finance ministry had informed all independent institutions of pay cuts between 10 and 20 per cent effective this
month for all civil servants, which would be up for review at the end of the month.

In October, Ahmed Assad, state minister of finance, said independent institutions were “making excuses” to avoid lowering salaries and
allowances of employees.

His remarks came after independent institutions argued they were not legally obliged to cut their employees’ salaries.

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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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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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Holhudhoo prepares for beach erosion

Residents of Noonu atoll Holhudhoo have sent a letter to their island councillor expressing concern over the escalation in beach erosion, especially as monsoon season approaches.

Councillor Ishaq Rasheed told Minivan News that erosion was particularly bad on the north-east corner of the island where land had been reclaimed and plots given out to islanders to build houses.

“It happens every year during the north-east monsoon but it was worse last year than before,” said Ishaq, adding that he feared a repeat in late December or early January.

“One house owned by Badeeu was almost built. He just had the foundations. But luckily he didn’t built it otherwise it would have been completely in the sea,” he said.

In another example, Ishaq said the occupants of Saraamanzil were forced to leave their house on several occasions “because the sea is almost up to its walls”.

He said that although the President had pledged to build a sea wall, the government was still awaiting loan assistance for the Rf2 million (US$156,000) project.

For now, he continued, residents with homes on the north-eastern corner of the island would have to be relocated when the weather worsened.

As one of the lowest-lying countries in the world, the Maldives is particularly vulnerable to rising sea levels and its corollary, beach erosion.

In 2007, the United Nations Intergovernmental Panel on Climate Change predicted sea level rise of between 18cm and 59cm within the next century would submerge many of the Indian Ocean nation’s islands.

Speaking to Minivan News, Abdulla Shahid, chief coordinator at the disaster management centre, said that no action had been taken to tackle Holhudhoo’s erosion problem yet.

“The main reason is budget difficulties,” said Shahid, who added that over 70 per cent of islands in the Maldives experienced beach erosion.

If budget was not a question, Shahid said he would like to acquire the technical know-how and assistance to build bespoke harbours for each of the islands.

“This is what’s causing these problems. There might be other issues related to climate change but most of these erosion problems are related to harbours,” he said.

The Maldives’ “cut and paste” harbours have been criticised for not taking an island’s specific attributes, such as sand movement, into consideration, resulting in erosion.

Although islands in the Maldives are dynamic and coastal erosion is counterbalanced by subsequent sand accretion, erosion is worsened by man-made activity such as ill-conceived harbours.

Shahid said he was seeking cooperation with other countries such as the United States and the United Kingdom, which had experience of designing and building harbours.

Until then, he said, sandbags provided a temporary measure, adding that the disaster management centre had recently sent 1,200 sandbags to Raa atoll Dhuvafaaru to help with the problem.

“We have got our work cut out and we have got nothing but empty coffers,” he said.

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Kolhufushi to undergo multi-million dollar make-over

Islanders from Meemu atoll Kolhufushi will have their homes rebuilt in a multi-million dollar make-over after five years of living in temporary shelters following the 2004 Asian tsunami.

The government will use money from a US$15 million Abu Dhabi Fund for the project which will see the reconstruction and renovation of 168 houses, said Dr Mohamed Shareef, deputy minister of housing, transport and environment. Shareef added that the fund will also help pay for renovation on other tsunami-ravaged islands.

The Kolhufushi project will see the construction of a water and electricity network as well as a sewerage system, along with the harbour that was built by the former government.

Shareef said the government had conducted a survey asking every household what they thought was required for the reconstruction.

Reconstruction will get underway next March, he said, as the project has to be opened up to an international bidding process.

“The government will rebuild whatever has been damaged,” he said, explaining that no new houses would be built.

Councillor Mohamed Waheed said that many of the island’s 1,200 residents were living in temporary shelters made of plywood and cement while others still lived in their own houses “in difficult conditions”.

For now, electricity and oil is provided at no charge to the islanders, he said.

Waheed said that during the consultation process, islanders were given the option of having their new homes built in three different styles.

“The previous government also made a lot of promises to the people. The Red Cross people came to the island four or five times but there were a lot of problems. They even finalised plans,” he said.

“There was a conflict between the people and the government. There was an internal war on the island and they couldn’t do it,” he added.

Kolhufushi was one of the islands worst-hit by the tsunami with 16 deaths and extensive damage to the island’s infrastructure.

But the British Red Cross halted reconstruction in January 2007 after the government and islanders failed to come to an agreement over the location of the new houses.

Shareef said islanders were displeased with the organisation’s assessment that only 55 houses were required.

“But building houses is one of President Nasheed’s pledges which is why he will make this a priority,” he said.

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Commonwealth’s lustre fading, finds survey

The Commonwealth has a very low profile among the public, especially the young, and policymakers, according to a new global public consultation.

Less than one-third of the people interviewed as part of the Commonwealth Conversation, to mark the association’s 60th anniversary, could name any of its activities, with the majority only able to cite the Commonwealth Games.

Policymakers struggled to identify areas to the Commonwealth clearly added value. Those working in Commonwealth organisations expressed frustration that the association was being neglected by member governments and lacked an ambitious vision for its future.

“This is a wake up call for the Commonwealth. After 60 years of fantastic work, the Commonwealth has to choose between quietly retiring or boldly revitalising itself for the 21st century,” said Dr Danny Sriskandarajah, director of the Royal Commonwealth Society.

The Commonwealth Conversation surveyed tens of thousands of people across almost all its 53 member states via online and offline activities.

The investigation’s findings further revealed that the Commonwealth was “more often valued by Anglophiles and those nostalgic for an imperial past than those committed to the internationalist values of the association”.

The report suggested rebuilding the Commonwealth’s profile to highlight its principles, priorities and the people involved.

Contributing to the report, Kenyan Vice President H E Kalonzo Musyoka said, “We don’t hear the voice of the Commonwealth loud enough. It is a very well established body but I do feel that it needs a sense of renewal.”

Last week, Commonwealth heads met in Trinidad and Tobago for their annual meeting where climate change was the main topic on the agenda.

Leaders welcomed a US$10 billion climate package to help developing countries ahead of the UN climate change summit in Copenhagen this month, which analysts have argued will help revive the Commonwealth’s standing.

Non-Commonwealth leaders such as Danish Prime Minister Anders Fogh Rasmussen and French President Nicolas Sarkozy as well as United Nations Secretary General Ban Ki-Moon made appearances for the first time.

In a statement at the end of the two-day conference, leaders agreed to consider strengthening the role of the Commonwealth Ministerial Action Group (CMAG) to enable it to deal with the full range of serious and persistent violations of the association’s fundamental values.

The Maldives was included in the group, established by the Commonwealth heads of government in 1995 to uphold the Harare Declaration, which lays down the association’s fundamental values and membership criteria.

Leaders expressed concern over the deterioration in the political situation in Fiji with regard to its adherence to fundamental Commonwealth values and said they would consider Zimbabwe’s re-entry into the organisation over the next few years.

In addition to signing a climate change declaration, participants agreed to admit Rwanda as the 54th member; a decision which alarmed some human rights organisations.

Also at the summit, Sri Lanka was blocked from hosting the next meeting of Commonwealth leaders in protest at the country’s military repression against the Tamil population earlier this year.

While the Sri Lankan government succeeded in ending a 26-year civil war against the Tamil Tigers, they have been accused of widespread human rights abuses in achieving their goal.

Instead, countries voted for Australia to host next year’s conference.

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Budget falls short of development pledges: DRP

The Dhivehi Rayyithunge Party (DRP) has expressed regret over the proposed 2010 mid-term budget, which it argues will fail to deliver on the development pledges of the incumbent government.

The largest opposition party said the budget had a deficit of Rf4.7 billion (US$366 million), noting that while Rf7.2 billion (US$560 million) is expected in revenue, this was accounted for 60 per cent of the budget.

“It is further doubtful that the revenue goals could be reached since a large part of the income rests upon taxes to be levied under laws that would be made in the future,” a statement from the party said.

Addressing MPs last week, Finance Minister Ali Hashim said the government had proposed a number of measures to generate around US$354 million to plug the deficit. These included foreign aid, foreign loan assistance, privatisation of government companies and the sale of treasury bills through the Maldives Monetary Authority.

In their statement, the DRP further noted that Hashim said government revenue depended on three new taxes, legislation for which was currently pending in parliament.

But, the party continued, the Rf3.4 billion (US$265 million) expected in tax revenue in next year’s budget was only three per cent higher than tax revenue in 2008.

Last week, Hashim urged MPs to pass the taxation legislation before the end of the year and said a goods and services tax would be imposed on tourist resorts and hotels in the final quarter of 2010, which he anticipated would raise Rf358 million (US$27 million) in revenue.

Revenue

The party further noted that at Rf333 million (US$26 million) revenue from profits of government companies was significantly lower than 2009 because of the government’s policy of selling off state assets.

DRP pointed to the government’s decision to sell seven per cent of its stake in the highly profitable Dhiraagu, the country’s first telecommunications company, to British company Cable & Wireless for US$40 million.

“We believe that another reason for the decrease of income from government companies is handing over management of these companies to unqualified people for political purposes,” their statement said.

Since coming to power, the government has introduced a policy of public-private partnerships it hopes will enhance the efficiency of state-owned enterprises.

Beyond the 40 per cent deficit, another of the issues raised by the DRP was the lack of funding for large development projects such as a national university,

“The extraordinarily high government expenditure casts doubts on the government’s talk of reducing expenditure,” the statement said, further claiming that a large portion of the total expenditure on government employees, Rf3.9 billion (US$304 million), would be spent on political appointees.

Even with the reduction of civil servants’ salaries and dismissals, expenditure on salaries is higher than previous years, the DRP said.

In August, the government announced a raft of austerity measures to help alleviate the budget deficit. These included pay cuts of up to 20 per cent for civil servants and all political appointees ranked deputy minister and above, cutting back on foreign trips, and letting go of all government-rented buildings.

Both the president and the vice-president also volunteered to take a 20 per cent pay cut to their salaries.

Despite a high number of political appointees, the government continues to maintain that it has made fewer appointments than the former administration.

“Benefit for the people”

In their statement, the opposition party described the interest on loans as “alarming”, noting that compared to Rf279 million (US$22 million) in 2008, the amount raised from interest in 2010 will be Rf529 million (US$41 million).

The party said that while the government’s policy was to reduce the size of the government, the proposed expenditure in 2010 will be higher than in previous years.

The DRP further pointed to the increase in foreign debt from Rf755 million (US$59 million) in 2008 to Rf1,057 million (US$82 million) in 2010, adding that the interest rate had not been revealed.

“Our only hope is that this mid-term budget will be amended for the benefit of the people and the country and pave way for development. We give full assurance to the beloved people that we will do everything we can in parliament,” the statement concluded.

Speaking to MPs at parliament, Hashim said that by the IMF government finance statistics measure, the deficit for 2009 was 26.1 per cent.

But, he added, if the mid-term budget was implemented, although there would be a decline to 14.8 per cent in 2010 and 2.4 per cent in 2011, it will reach a surplus in 2012.

Hashim said the structure of the budget was agreed upon after consultations with the International Monetary Fund and recommendations by the Asian Development Bank and the World Bank.

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DRP lambasts mid-term budget

The Dhivehi Rayyithunge Party (DRP) has expressed regret over the proposed 2010 mid-term budget, which it argues will fail to deliver development to the Maldives.

The largest opposition party said the budget had a deficit of Rf4.7 billion (US$366 million), noting that while Rf7.2 billion (US$560 million) is expected in revenue, this was accounted for 60 per cent of the budget.

“It is further doubtful that the revenue goals could be reached since a large part of the income rests upon taxes to be levied under laws that would be made in the future,” a statement from the party said.

Addressing MPs last week, Finance Minister Ali Hashim said the government had proposed a number of measures to generate around US$354 million to plug the deficit. These included foreign aid, foreign loan assistance, privatisation of government companies and the sale of treasury bills through the Maldives Monetary Authority.

In their statement, the DRP further noted that Hashim said government revenue depended on three new taxes, legislation for which was currently pending in parliament.

But, the party continued, the Rf3.4 billion (US$265 million) expected in tax revenue in next year’s budget was only three per cent higher than tax revenue in 2008.

Last week, Hashim urged MPs to pass the taxation legislation before the end of the year and said a goods and services tax would be imposed on tourist resorts and hotels in the final quarter of 2010, which he anticipated would raise Rf358 million (US$27 million) in revenue.

Revenue
The party further noted that at Rf333 million (US$26 million) revenue from profits of government companies was significantly lower than 2009 because of the government’s policy of selling off state assets.

DRP pointed to the government’s decision to sell seven per cent of its stake in the highly profitable Dhiraagu, the country’s first telecommunications company, to British company Cable & Wireless for US$40 million.

“We believe that another reason for the decrease of income from government companies is handing over management of these companies to unqualified people for political purposes,” their statement said.

Since coming to power, the government has introduced a policy of public-private partnerships it hopes will enhance the efficiency of state-owned enterprises.

Beyond the 40 per cent deficit, another of the issues raised by the DRP was the lack of funding for large development projects such as a national university,
“The extraordinarily high government expenditure casts doubts on the government’s talk of reducing expenditure,” the statement said, further claiming that a large portion of the total expenditure on government employees, Rf3.9 billion (US$304 million), would be spent on political appointees.

Even with the reduction of civil servants’ salaries and dismissals, expenditure on salaries is higher than previous years, the DRP said.

In August, the government announced a raft of austerity measures to help alleviate the budget deficit. These included pay cuts of up to 20 per cent for civil servants and all political appointees ranked deputy minister and above, cutting back on foreign trips, and letting go of all government-rented buildings.

Both the president and the vice-president also volunteered to take a 20 per cent pay cut to their salaries.

Despite a high number of political appointees, the government continues to maintain that it has made fewer appointments than the former administration.

“Benefit of the people”
In their statement, the opposition party described the interest on loans as “alarming”, noting that compared to Rf279 million (US$22 million) in 2008, the amount raised from interest in 2010 will be Rf529 million (US$41 million).

The party said that while the government’s policy was to reduce the size of the government, the proposed expenditure in 2010 will be higher than in previous years.
The DRP further pointed to the increase in foreign debt from Rf755 million (US$59 million) in 2008 to Rf1,057 million (US$82 million) in 2010, adding that the interest rate had not been revealed.

“Our only hope is that this mid-term budget will be amended for the benefit of the people and the country and pave way for development. We give full assurance to the beloved people that we will do everything we can in parliament,” the statement concluded.

Speaking to MPs at parliament, Hashim said that by the IMF government finance statistics measure, the deficit for 2009 was 26.1 per cent.

But, he added, if the mid-term budget was implemented, although there would be a decline to 14.8 per cent in 2010 and 2.4 per cent in 2011, it will reach a surplus in 2012.

Hashim said the structure of the budget was agreed upon after consultations with the International Monetary Fund and recommendations by the Asian Development Bank and the World Bank.

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