Finance Ministry orders all institutions to pay back former govt’s civil servant salary cuts

The Finance Ministry has today issued a circular informing all institutions to pay the amount cut from civil servants from January 2010 to December 2012 by the former government, staring from July onwards.

The circular said the money should be paid monthly and not in a lump sum, and advised all institutions to pay the amount from the annual budget for wages. If the money in budget was not enough, the finance ministry advised the institution to cut the money from the budget allocated for other expenses.

The circular was signed by the Ministry’s Financial Controller, Mohamed Ahmed.

The reduction in civil servant pay was introduced by the previous government in an attempt to manage a financial crisis back in 2009. The initial deduction, agreed between the Finance ministry and the Civil Service Commission (CSC), was only due to last for three months until the government’s income had risen above Rf7billion (US$544 million).

However, after the Finance Ministry refused to restore wages to the previous level, the CSC took the case to the courts.

The Civil Court ruled that the Finance Ministry did not have the authority to reduce the salaries, a cut of up to 20 percent in some cases. The CSC at the time interpreted this as a decision to restore the deducted salaries, a decision upheld by the High Court in May of last year.

In April this year the Civil Service Commission said the wage repayments, amounting to Rf443.7 million (US$28.8 million), will be disbursed in monthly installments over 12 months from July 1 this year. This money has not been accounted for in this year’s state budget, the deficit of which has already drawn concern from the International Monetary Fund.

In January 2010 the International Monetary Fund (IMF) warned that international funding to the Maldives would be threatened if civil servant salaries are restored to former levels.

“One of the primary drivers of the large fiscal deficit has been government spending on public wages, which has more than doubled between 2007 and 2009, and is now one of the highest in the world relative to the size of the economy,” Rodrigo Cubero, IMF mission chief for the Maldives said at the time.

“Measures that would substantially raise the budget deficit, such as a reversal of previously announced wage adjustments, would also put the program off track, jeopardising prospects for multilateral and bilateral international financing,” he warned.

The Maldives is currently facing a foreign currency shortageplummeting investor confidencespiraling expenditure, a drop off in foreign aid and a crippling budget deficit of 27 percent.


12 thoughts on “Finance Ministry orders all institutions to pay back former govt’s civil servant salary cuts”

  1. Hopefully now the phones in the government offices will get answered and the "kamabehey beyfulhaa" will actually be there at the office.

  2. Too much of our money is wasted in govt. offices for short hours and poor output. Just look at salam, ridiculous!

  3. Ahmed, while you mock our civil servants, look at our PMs who keeps even shorter hours and get such sky high salaries!

  4. Oh yes, your votes, please, for whoever the PPM chooses to be their Presidential candidate. Jihadh, write your name down and look at it. Your name calls for jihaadh, where is your jihaadh?

  5. Ahmed got huge benefit during Anni regime and he lost his job over night . I guess he had to support the Anni propaganda with the hope of coming back to power again

  6. Its easy to point fingers at politicians - the civil servants always have a lucky escape even if they do not work.

  7. Inspite of no money in Goernment we got extra 5000 rufiya per month for staff of Elections Commission as living allowance.this we got by going on strike.

  8. * Getting ready for elections through soft bribery
    * The government is broke, but dont worry, they have printed a few millions to pay the salaries among other things...

    What we see since last week is new 500 and 100 ruffiya notes all over. It speaks for itself.

  9. So, let's get this straight. There is no money in the state coffers. After borrowing MRf 300 million from the Bank of Maldives, the regime has withdrawn a further MRf 21 million from the "contingency" budget of the Finance Ministry.

    Only a week or so ago, our esteemed Governor of the Maldives Monetary Authority was speaking about the need to reduce the Rufiyaa in circulation to reduce inflation.

    Well, it looks like the different organs of the regime do not speak to each other. Enjoy the short lived flood of Rufiyaa; for as night follows day, inflation will take a good leap and your newly acquired Rufiyaa will be worthless.

  10. Anni was right , Lazy civil servents do not deserve such a high salaries. We can't to give afford them such a high salaries. Think about our increasing budget deficit. Compare the salaries of civil servents and employees in private sectors. Civil servents are not only one belongs to this Country.

  11. Sorry ! typing mistake. ' we can't afford to give them such a high salaries.'


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