CSC refutes media reports of condition attached to IMF aid

The Civil Service Commission (CSC) has denied media reports the International Monetary Fund (IMF) approved financial assistance of US$92.5 million on the condition that salaries and allowances for civil servants are reduced.

A press release issued by the CSC yesterday states that the commission did not believe the IMF imposed the condition that salaries are reduced solely for civil servants.

It quotes from a statement issued by the IMF on Friday, which states the government was taking action to reduce expenditure, “including unwinding part of the recent large wage increases” and had “taken steps to reform the civil service”.

The commission points out that the IMF statement does not exclude or single out a particular area for salary reductions.

“Since it does not define the outcome of the reform when it refers to the civil service reform, we believe the opportunity would remain for employees’ salaries to be increased,” it reads.

Last week, the CSC sent letters to both President Mohamed Nasheed and parliament requesting civil servants’ salaries be restored to their former levels.

In August, the government introduced a raft of austerity measures, such as pay cuts for political appointees up to 20 per cent, to alleviate the budget deficit.

Following negotiations between the finance ministry and the CSC, the commission agreed to reduce salaries of civil servants up to 20 per cent subject to a review in three months.

When the pay cuts were enforced in October, it was agreed that the salaries would be restored to former levels once government revenue exceeds Rf7 billion (US$544 million).

The mid-term budget for 2010 was proposed to parliament with projected revenues of Rf7.3 billion (US$568 million).

The commission’s press release states that as section 43 of the CSC regulations empower the commission to alter salaries, other government authorities could not sign agreements stipulating reductions for civil servants’ salaries.

Presenting the budget to parliament, Finance Minister Ali Hashim said the IMF, World Bank and Asian Development Bank had recommended reductions to the civil service.

Mohamed Zuhair, president’s office press secretary, told Minivan News last week that salaries would only be restored once the revenue “physically” reached Rf7 billion.

The civil service pay cuts sparked outrage from the opposition, which accused the government of unfairly targeting civil servants as they were sympathetic to the former government.

The opposition further denied that the economic circumstances warranted the pay cuts and criticised the government for “economic mismanagement”.