Day: March 3, 2014

Pensions office performs U-turn on benefit increase

After initially reporting that the promised pension increase from MVR2300 to MVR5000 could not be done this month, the Maldives Pension Administration Office (MPAO) today confirmed that it is working to transfer the MVR5000 by tomorrow.

The CEO of the office had yesterday told Haveeru that it had not received the additional funds for the increase and that it would therefore transfer the current MVR2300, giving the rest when the government released additional funds.

“They are doing this to fulfill a government pledge. This has nothing to do with the pension fund. We will not increase it to MVR5000 by taking money from that fund. What we will do is transfer it when the government provide us with it,” Manik was quoted as saying.

The state funded pension for all citizen’s above the age of 65 was introduced in 2009 at MVR2,000, and was later increased to MVR2,300 through an amendment to pension legislation.

A further increase to MVR5000 – starting from March 2014 – was an election pledge of President Abdulla Yameen, though changes to the amount disbursed from the existing pension funds will require another amendment to the act.

Cabinet minister Ahmed Adeeb has recently assured that the increase would take place in March as promised, saying that it can be funded through a sustainable model based on long term bonds and T-bills.

Adeeb also talked about the prospect of combining various funds such as housing, health insurance, and pension funds into a single fund.

The government had already allocated MVR470 million (US$ 30.5 million) in the state budget for the MVR2,300 allowance (US$149). These funds will now be invested in the retirement pension fund or in financial instruments such as T-bills in order to generate the monthly MVR5000 stipend, Adeeb has said.

Following Manik’s comments yesterday, Adeeb told Haveeru that the delay was due to the first of the month falling on the weekend and “because it is a new allowance”.

Yesterday, MPAO CEO Manik stated that eighty percent of the pension funds are already being invested in T-bills sold by the government to finance the budget deficit, and that discussions with the government are underway to invest the rest of the funds in bonds.

While the government maintains this to be a sustainable model of financing the increase in pensions, critics have argued that, with a MVR1.3 billion (US$84.3 million) deficit budget, the move will plunge the country further into debt.

“These are loans, and taking loans is acceptable to invest in to increasing productivity. But this is not such an investment, this is something the government is spending. Eventually people will have to bear the burden of this,” former Economic Development Minister Mahmud Razee has remarked.

Last December, the central bank and regulator – the Maldives Monetary Authority – advised the state to pay all due treasury bills and treasury bonds and to turn existing short-term debts into long-term ones.

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President Yameen delivers first presidential address

President Abdulla Yameen today delivered his first presidential address in the parliament’s first official session after recess.

President Yameen detailed his administration’s achievements – claiming success in all the 100-day initiatives.

He explained that the executive had now drafted a legislative agenda for the next five years which would be gradually submitted to parliament in the form of draft bills.

The opposition Maldivian Democratic Party (MDP) has described the address as “taciturn and rather nonsensical”, arguing that major issues such as the Supreme Court and the recent HIV scandal at IGMH were ignored.

Opening the ceremony, Parliament Speaker Abdulla Shahid noted that this was first instance where an MP has been unable to attend the presidential address due to incarceration, referring to MP Abdulla Jabir.

Shahid also condemned the attack on MDP MP Alhan Fahmy, calling for the cessation of all acts against the implementation of rule of law and legal obligations. Alhan attended today’s ceremony returning from Sri Lanka where he underwent spinal surgery following his February stabbing.

The president began his address by noting that, although national debt would increase this year to MVR31 billion, the debt percentage can be maintained at 78 percent of GDP in 2014.

Government developments

Yameen said that the government had decided to construct a youth city in Hulhumalé and that physical work on construction of a bridge connecting capital city Malé to the airport island Hulhulé will begin before the end of the year.

He added that once the development of the Ibrahim Nasir International Airport in Hulhumalé is completed, it can be maintained for use for a duration of at least 50 years, and that the construction of two new airports – in Kulhudhuhfushi and Felivaru – have now been opened for bidding.

Yameen also spoke of the need to strengthen investor confidence, and pledged to eradicate all obstacles and difficulties currently faced by foreign investors.

Yameen noted that the number of tourist arrivals had already increased to 348,000 in the past three months, stating that this added US$70 million to government earnings. He added that the government intended to introduce tourism to atolls currently not involved in the sector.

Regarding the fisheries sector, Yameen stated that a system has been put in place where fishermen who earn less than MVR10,000 a month will be given financial aid from the state. He added that this will commence in a period of two months.

He also pledged that scholarship schemes will be offered in the near future to students who pass a minimum of three GCE Advanced Level subjects.

On the topic of health services, Yameen stated that arrangements are being made to introduce new health facilities – including ambulance speedboats – to the country. He added that an initiative has now begun where existing health institutions are being categorised and supplied with the necessary medical equipment.

The president said that the government would shortly submit a bill to parliament seeking to provide financial aid to persons with special needs,as well as a bill seeking the establishment of special economic zones within the country.

MDP Response

MDP Spokesperson Imthiyaz Fahmy described President Yameen’s address as ignoring many pressing issues, suggesting that he appeared “disconnected with what is happening here and now”.

“To begin with, the whole country is appalled and in shock about the HIV infected blood transfusion at IGMH which recently came to be known of. And yet, there was no apology or even a mention of the matter,” said Fahmy

Fahmy suggested that the president spend excessive time discussing administrative issues such as queues outside government offices and phones not being answered efficiently at the expense of issues of wider importance, such as the judiciary.

“This is something the whole world is talking about, that our judiciary needs to be reformed. And yet, Yameen did not even mention them,” Fahmy continued.

“He also failed to condemn the way the Elections Commission is being unconstitutionally dragged to the Supreme Court at a time when there is an election looming overhead.”

The party’s official response will be delivered via the Majlis.

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