Minister of Finance Abdulla Jihad has said the government is unprepared to meet its recurrent expenditure – including salaries – for the final three months of 2012 without the US$25million loan promised by the Indian government.
Jihad, who was not responding to calls at the time of press, told local media outlet Sun Online that he believed the loan is being delayed due to the ongoing controversy over Indian infrastructure company GMR’s development of Ibrahim Nasir International Airport (INIA).
The Ministry’s Financial Controller Mohamed ‘Kuday’ Ahmed was also not responding to calls at time of press.
India’s High Commissioner to the Maldives DM Mulay told Minivan News that “India stands by every commitment and hopes Maldives will reciprocate. We have excellent rapport with the GOM [Government of Maldives] and issues, if any, are sorted out amicably.”
India’s Ministry of External Affairs publicly expressed concern over the political stability and the investment climate in the Maldives earlier this month.
Sun meanwhile reported Jihad as saying he had made repeated requests via the High Commission for the loan to be expedited.
Jihad’s comments come during a week in which President Dr Mohamed Waheed Hassan has been campaigning in Faafu and Dhaalu Atolls, reportedly reassuring the people that the economy was running smoothly whilst crticising those who he claimed sought to weaken it.
A concerted campaign by government-aligned parties to annul the US$511million concession agreement with GMR – the single largest foreign investment in the country’s history – has sparked concerns over investor confidence with damaging implications for the long term development of the economy.
Waheed is also reported as saying that he would not resort to borrowing from foreign governments in order to finance government activities.
“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn”, he was reported to have told the people of Nilandhoo.
“The Maldivian economy is fine. Don’t listen to whatever people say. We don’t have to [worry] about the Maldivian economy being in a slump,” he was quoted as saying during a rally in Meedhoo.
Minivan News was unable to obtain comment from President’s Office spokesmen on this issue before going to press.
The US$25 million was agreed upon last month as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.
Unpaid bills
Despite Waheed’s reassurances, this month has seen a number of state owned institutions face disconnection from the capital’s power grid as bills amounting to around MVR150million (US$9.7million) were said to be owed to the State Electricity Company (STELCO).
Responding to the institutions’ blaming of his ministry, Jihad told Sun that the finances were simply not there.
“We are not receiving foreign aid as was included in the budget. How can we spend more than we receive? That’s why those bills are unpaid. We can’t spend money we don’t have,” he told the paper.
He mentioned that the government would have difficulties paying the salaries of civil servants in the final quarter of this year.
Since coming to power in February, the government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to Rf443.7 million (US$28.8 million), to be disbursed in monthly installments over twelve months from July.
A MVR 100million (US$6.4 million) fuel subsidy for the fishing industry was also approved by the Majlis Finance Committee earlier this month, with the hope of stimulating the ailing sector.
The overall deficit for government expenditure has already reached over MVR2billion (US$129million). Jihad has told the Majlis’ Finance Committee that he expected this figure to rise to MVR6billion (US$387million) by year’s end – 28percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.
Former Minister of Economic Development Mahmood Razee told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”
“If they don’t get the loan, they will have to cut travel expenses, stop certain programs – take drastic measures or get another loan,” said Razee, claiming that the only alternative would be to sell treasury bills.
Following reports in August that the government was attempting to raise funds through the sale of treasury bills, former Finance Minister Ahmed Inaz said that this would not address the concerns of the IMF, prolonging economic uncertainty.
China has made large commitments towards the Maldives’ economic development in recent months, although Razee said he believed that current changes within the Chinese government in the upcoming month made this an inopportune time to look there for additional financial aid.
In August, the current Finance Ministry announced its own austerity measures intended to wipe over MVR2.2billion (US$143million) from this year’s budget deficit though few of these propositions have as yet been followed through.
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That stupid Indian woman is now gonna turn up to gloat....stupid cow worshipping Hindus are whom we are indebted to now thanks to seyku Nasheed,
Political agenda before the country's interest and economic well being.
Steps backward on a slippery slope.to undo development lasting for ages and generations to come.
Can politics be nastier?
Waheed dose not have to say any thing because it already said by the IMF that Maldives have to manage with they they not going to give any money to the country
That's what happens when you overpay a pack of dogs to overthrow a democratic government, you fool.
Now go and get blown up by a predator drone, will you?
India made the biggest mistake ever in trusting Mulay and helping the traitor Waheed in bringing about the coup. Now they can pay for it while the traitor government gives the airport to China and China lends the government cash to pay salaries. Mulay does not have the capacity to be a diplomat, he should know how to play it smart instead of being so stupid. Take Mulay back to India. India can't afford to keep such stupid politicians and diplomats such as him, in a strategically important country for India, no matter how small our population.
2011 Feb a 1100 new Jobs were created. It was called local councils. Also in Majlis members started taking extra 20,000 in the name of committee allowance. Also to note judges and magistrates get up to 40,000Rf salary each. This is not all, MBC, MBC, HRCM, PIC, ACC,Auditor etc. Country is filled with independent commissions and to which the staff salary is enormous. Also new Human rights ministry fills gazette with new Jobs.
To add up to that there is no idea in current administration to increase revenue. Hearing to president is like switching on NetGEO. It's planned chaos we have here.
Tax the rich!!! Pass the personal income tax bill in the Majlis! Obtaining loans to pay salaries is ridiculous... With each bill passed the Majlis creates a new body. The fiscal policy is'nt prudent. How long can we survive like this?
Interesting news article. Not that it is surprising....only that the Finance Minister has let out the cat among the pigeons!!
“The Maldivian economy is fine. Don’t listen to whatever people say. We don’t have to [worry] about the Maldivian economy being in a slump,” he was quoted as saying during a rally in Meedhoo."
I ask Waheed, who the hell have to?
He does not have to worry after taking loans from here and there while we again have to sweat to pay them back!
A bloody joke this is!
I have not seen nor heard of a stupid Finance Minister as Jihad is! what a stupid man!
Waheed has so much money that he is buying Tempura Cloud Mattresses and promising sewer systems in islands where they have already being installed by the former government. So whats all these lies about having no money.
The Maldivian economy IS fine for Waheed. When all hell break lose and people start to starve, he can just go to US as he has done many times before when adversity strike. He literally does not need to worry at all...
If India loans to Maldives, India is simply making ordinary Maldivians life harder. The money the lend will be used to pay the salaries to those useless government sector wages. These wages are simply eating up the private sector hard earners earning because they are unable to convert their earning to any hard currency so the economy can grow.
Once India lends the USD to the monkey government they will release their unworthy paper to this jumbo parliament and government, the buggers than will cash out all foreign reserve to go outside of the country for prostitution and gambling. Indian please don’t lend this buggers, once their coffer is exhausted the buggers will have no option but to slash down their spending.
Waheed shouts, Dont worry, dont worry, dont worry, we have money. While his Finance minister is begging Indians to get a measly loan.
lol
Why India would delay the payment of US$25 million when it is crucial to the survival of a regime that the so-called largest democracy, India, so anxiously backed by supporting the opposition politicians and the security forces in their attempts to overthrow the popular and legitimate government of Nasheed on February 7 this year?
The regime cannot survive without the financial backing of the international community. India was the democracy that helped a democracy to be destroyed, and will be expected to extend any help it needs: now it is the budget support that the regime needs badly.
India expects the Maldives to reciprocate a favour with a favour. When India gives the Maldives millions of dollars, they know the Maldives cannot reciprocate in kind, but by preferential treatment of Indian interests in the Maldives as in the case of GMR issue raised by the opposition politicians wrongly during protests against the Nasheed government. Incidentally, those parties in government now are in a dilemma in which any decision is difficult for them. They may not want to force GMR out, but if they don’t they will play into the hands of MDP. They promised their supporters that in 24 hours in office they would throw out the GMR in a so-called liberation of the Ibrahim Nasir International Airport from the GMR of India.
India has to get the regime round to stop the campaign against the GMR in return for the financial support to the budget. But, how far India will go spending Indian taxpayer money in helping a people that consider themselves more developed than the Indians themselves?
No money for people but has the money to pay for luxury items of government officials. No body force this man to stay in power so just leave us alone.
Mariyam is right. Mulley did put Maldives into this sh----t.But Mulley has gained over $20million from the mess he helped to bring about. India should rethink about his position as a diplomat..
What a fate of this country? This Government (allies) don't want Indian companies to invest here but they want the Indian Tax payers money to pay the Maldivian salaries and that means this country people are dependent on someone's money for their enjoyment.
Why does not the AP object and make a procession on not to take funds from India ?
Is it hallal to consume cow worshiping Indian tax payers money.Milk Sheik Imran can you answer that?????????
the country was not having a positive growth for last couple of years and country has been seen a negative growth for let 5 years.
It has even worsen the situation during Anni regime and the debt had gone up to 990 millions.
I know some of MDP and Anni believes will not agree but that's the fact and one can not deny.
the country was not having a positive growth for last couple of years and country has been seen a negative growth for let 5 years.
It has even worsen the situation during Anni regime and the debt had gone up to 990 millions.
I know some of MDP and Anni believer will not agree but that's the fact and one can not deny.
Another case of "it's simply not true"?
This really is the slogan for this so-called "government".
The "Coup-Boss" and his coup-perpetrators cannot be believed today, any more than they were believable on 07 February 2012.
Maldives : it's simply not true!
hassan watch your comments
your parents have not taught you civility,or did you learn this way of behavior from your madrassa ,hence your filthy posts insulting other races and religion
This is another news report most of you retards were hoping I would not see. Sadly I did see it and I am here to gloat........GLOAT...........GLOAT.................GLOAT!!
Whatever happened to your uber luxurious 'high end' resorts, your amazing GDP and your 'best in south asia' living standard?....up the bloody creek?
Clearly your economy is a shambles when your government cannot afford to pay your salaries.
I guess we cow worshipping hindus will have to bail you out once again...........
GLOAT........BLOODY.........GLOAT
India is merely paying us our tribute, as was custom in the ancient days back when Ibn Batuta was teaching virtue to our women.
By no means are we indebted to the Hindustani cow worshippers. The harlot from New Delhi is unjustified in her gloating.
How stupid do Waheed et al think Maldivians are? How much rubbish can they fling our way? Yawn yawn The geopolitics will resolve the cash crisis (for now) Otherwise maybe Gayoom et al should start digging into their (very deep) pockets - pay for the consequences of their fully paid up coup that never was. Yawn.
Hassan ur racist comment is so ironical. we may be cow worshipers, but we dont have a vulgar culture like you.we dont romance with lovers(at age of 12,13)in front of our parents or elders.how can, these youths who are being brought up in such a vulgar culture with no respect for parents, elders or the public, be expected to understand and respect other cultures?instead of racism, try learning wat humanity is and then you will know how to show gratitude to others who help you through and through.and if you go through your country history, dont be surprised to find that your ancestral roots are indeed from this cow worshiping country.
So giving an airport to an Indian company (actually it is a consortium of India, Malaysian and German company but never mind) is selling the country to Indian "traitors", but asking for loans to pay your teachers is fine. Hypocrisy of highest level. Best way out for Maldives is to cancel the airport contract and give it to a Chinese company now for I doubt you are going to get investment from Europe or Americas. Better "sell" your country to Chinese than Indians.