Government silent over Maldives bankruptcy claims

The government has refused to comment on claims made in local media by leader of the coalition-aligned Jumhoree Party (JP) that the Maldives was now bankrupt and already unable to pay some civil servants.

JP Leader and MP Gasim Ibrahim claimed that despite government efforts, the Maldives was now bankrupt and unable to pay some civil servants after steady economic decline within the nation, according to newspaper Haveeru.

Just last month, Parliament’s Financial Committee revealed that expected revenue for 2012 had plunged 23 percent, whilst spending was set to increase by almost 24 percent.

President’s Office Spokesperson Abbas Adil Riza today said that he was unaware of the bankruptcy comments linked to Gasim and could not comment on the matter, referring Minivan News to Minister of Finance and Treasury Abdulla Jihad.

Both Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls by Minivan News at the time of press.

Although the country’s Civil Service Commission (CSC) said that it had been involved in discussions with the Minister of Finance to try and overcome economic concerns, Chairman Mohamed Fahmy Hassan said that there had as yet been no issue with payments to staff.

“As of last month, all payments have been made in full, however it is the Finance Ministry who would know about the current situation,” he said.

Speaking to Minivan News on Saturday, Maldives National Defence Force (MNDF) spokesperson Major Abdul Raheem said despite some reports circulating to the contrary, he was not aware of any problems with payments to military officers.

Spending review

In attempts to counter its present spending shortfall, the government has unveiled proposals such as a revision to the country’s import duties and Goods and Services Tax (GST) to alleviate its financial difficulties.

The proposals have come under criticism from former finance chiefs serving under the previous government, who allege that such changes “do not make sense”.

Whilst committed to reducing state expenditure, Jihad recently announced his aim to avoid cutting the salaries of civil servants in order to tackle the nation’s budget deficit, seeking to make savings in other areas of expenditure first.

“Civil servants are the lowest ranking of all government employees. We will try to cut all non-wage expenditure by 15 percent. Salaries will be considered after this,” he said at the time.

Despite this pledge, Jihad added that a review of public salaries was set to be conducted by a pay review board that would also focus on independent commissions in order to reach an agreement on the necessary reductions.

Civil Service salaries

Between 2004 and 2009, the country’s fiscal deficit increased exponentially on the back of a 400 percent increase in the government’s wage bill.

The year’s 2007 to 2009 included the most significant largesse as the World Bank found wage expenditure to have increased from Rf 2 billion to almost Rf 5 billion even as revenues began to recede.

According to statistics from the Civil Service Commission (CSC), the number of permanent civil servants has more than halved between 2006 and June 2011.  There has been some contention in the past, however, that the transfer of many civil servants to state owned companies under the previous government masked the true figures.

The Maldives Monetary Authority (MMA) published figures for May that estimated the government will spend Rf2.6billion (US$168 million) on salaries and wages in 2012.

Maldives Bankrupt?

JP Leader Gasim – himself a former finance minister – claimed the Maldives had already been bankrupted after steady economic declines in recent years. He said that the evidence of the country’s troubled economy may not be immediately apparent, but would be seen in the “near future” as the state lacked the “necessary finance” to settle debts, according to Haveeru.

Gasim was reported as saying that “pointing fingers and blaming others” would not provide the country with an economic solution, calling instead for parliament to pass bills to alleviate the economic situation. The nature of these bills were not specified in local media.

Gasim’s phone was today switched off, while JP presidential candidate Ibrahim Didi was not responding to calls.

However speaking to local media, the JP leader added that the “actions of some” had negatively impacted on the nation’s economy, pointing to what he claimed were calls for a boycott of the Maldivian tourism industry.

Gasim, Maldives Vice President Waheed Deen and Progressive Party of the Maldives (PPM) MP Abdulla Jabir are among a number of figures associated with the present coalition government that are included in a list of resort owners included in the Maldives Tourism Advisory (MTA).

The advisory, established by the Friends of Maldives NGO, has a website utilising a ‘traffic light’ system recommending guests avoid resorts alleged by the Maldivian Democratic Party (MDP) to be directly linked in bringing about February’s controversial transfer of power.

Travel associations in the country have in turn criticised the MTA, expressing “serious concern” over what it alleged was a “concerted international campaign against several of the country’s resort operators.


17 thoughts on “Government silent over Maldives bankruptcy claims”

  1. The way to economic and social development is to make all citizens of Maldives Cabinet Ministers and Deputy Cabinet Ministers. That way, there will be no unemployment problem in the Maldives.

    A further step that should be immediately taken is to delare Maldives a part of the worldwide Gasim Empire. That will guarantee that Maldivian currency remains stable, and the state solvent.

  2. This country is hopeless:

    The Maldives Employment Act potentially grants 146 days annual paid leave to an employee, including 5 days "for a child's circumcision", and 10 days "for important obligations".

    There is no chance this country and its 'workshy' people will ever have hope of competing in international busness. Hopeless.

  3. The rich get richer while the poor get poorer under this llegal evil regime.

  4. Nothing wrong with tourism, this is down to greed and corruption of the new regime and its backers.

  5. @Rasfaru on Sun, 17th Jun 2012 10:02 PM

    "146 days annual paid leave to an employee, including 5 days “for a child’s circumcision..."

    Bloody hell! 5 days for circumcision? For fcuk's sake, who compiled this pile of shit?

    Like you said, there's a cat in hell's chance of this country being anything but bankrupt.

  6. @Ahmed bin Addu bin Suvadheeb

    Gayoom did, so he could get the votes of the civil servants and their families.

    Where in the world do we have a leave system like this?

    is the focus on serving the people? NO

    Dr Latheef amd Fahmy as the CSC Chief Commissioner had a real chance to rehaul the corrupt the civil service. But they were aoointed to protect Gayoom and so they will.

    Gayoom ran the Maldives as a kingdom, on royal patronage? the Republic of Maldives? President?

    Just semantics. Change in name.

    His Royal Highness Sultan Maumoon Abdul Gayoom.

    Abdul Majeed Rannabadeyrikilegefaanu (sic) made his fortunes stealing all the ambergis in the Maldives and investing in Eqypt where he retired to, Gayoom made his fortunes creaming off tourism and the oil that the Gulf states sold to the Maldives at concession rates.

    Both bankrupted the country.

  7. How convenient to blame a tiny little group of people with almost no resource for the total failure of the regime in managing the Maldivian econonmy. How can a handful of people bring about such an economic calamity to a whole country which spends millions of dollars on advertising as well as Public Relations?

    If the rich, such as Parliamentarians who earn hundreds of thousands of Rufiyaa annually from public coffers as well as from their private businesses start paying their fair dues in terms of tax, then the country will be able to stand on its feet. Gasim is a good example of "conflict of interest". He is one of the biggest tycoons in the country with both of his hands in the law making chamber!

    Almost all members of parliament run one form of private business or the other. When was the last time an MP voted to reduce any money paid to them via public funds? I don't recall a single case!

  8. Regardless of one's opinion of Mr Gasim, one cannot deny that Maldives is in deep financial trouble. The repurcussions of this is already being felt, and will contiue to be felt, by ordinary Maldivians. It is easy to stand the high moral ground and look down upon everyone else. However, sarcasm or sweeping generalisation of belittling will be of little console to to the ordinary Maldivian. Solutions can still be found. We have first to come to an undertadning of how we came to this situation and take the necessary steps, as advised by the relevant experts. The situation, it seems, cannot be reversed in a short period of time but will take years even if the right steps were followed.

    This came about primarily as a result of the political culture prevalent in the Maldives from time immemorial; a culture in which kings and presidents have uncurtailed access to the public treasury and a free rein in public spending and the parliament's inability to restrict political authorities having this free rein. Just a few examples from the past in order to illustrate this point. During the presidency of Mr Amin Didi, in which one third of the population of some islands (e.g. F.Nilandhoo, V. Thinadhoo) died of famine mainly as a consequence of the implementation of his misconstrued and unrealsitic socialist policies, he was able to spend whatever he wanted on whatever he wanted and donate 'gifts' to his friends and associates. During the presidency of Mr Nasir, he was able to 'legally steal' from the public treasury'. We had a dual exchange rate for the US dollar: the official rate which stood at 1 US dollar to about 3 Maldivian rufiyaa and a market rate of 1 US dollar to about 8.80 Maldivian rufiyaa. Only he was able to buy the US dollar at the official rate and then he sold the dollars at the market value to the public. Of course no one dared to say anthing. Some of those who wrote to the majlis regarding such matters and asked to investigate and take Mr Nasir to court in 1972, were prosecuted for sedition and given jail terms between 10 and 13 years. President Maumoon, who unashamedly and without a blink of an eye also vehemently denies misappropriation of any public funds too had the same free rein. Theemuge had an unlimited budget; the accounts into which certain monies such as the airport duty were deposited were at certain times not known; he facilitated access to public funds for his relatives (remember Ilyas and FPID!)and distributed state funds to his relatives (remember the loan scheme!) ;he used government resources to fund non-governmental activities - e.g. the coast guard funded helicopter trips for SHE whose head was his wife - and instructions from the President's office were sent to government departments to destroy all 'old' relevant documents using the pretext that it is too costly to maintain government archives. Due to lack of funds, the more recent governments were not able to spend from state coffers the way Mr Gayyoom used to spend. However, they too did little to curb public spending, and appropriated whatever funds they could.

    All these led to the financial crisis we are in now. The only way to remedy this is by curtailing public spending and electing honest and sincere politicians to the majlis who is aware of our past, who want to change our political culture and to serve the people and the country and not use public office as a means to enrich themselves.

  9. Gasim is angry because the occupancy at his resorts are very low, around 14-20%.

  10. Gasim has now screwed up our economy twice and blamed others. The illegal regime seem to now how to rob us, protect the rich, bribe the government work force, police and MNDF but they incapable of admitting error???

    On Feb 6th, the country has about to into credit with strong fiscal management that paid for the previous regime errors.... We have gone back to Hell and national debt.

  11. both Gayyoom and Nasheed had taken business community as their enemy and so much hatred is being created among the public.

    Guys no country has equal income earners and wealth is not evenly distributed in no country. There will be different tier of income earners and that is basics of being a human being.

    Even in our religion there are people who are supposed to pay Zakath and people who are supposed to get money from Zakath funds. If everyone should be at the same level why would some have to pay Zakath?

    The country can not run without the business and business can not survive without the people and it is the moral responsibility of the business community to give offerings to needy and give a fair portion of their wealth through taxes.

  12. I just wonder at who Gasim is "pointing fingers"?
    If it is not at him self, he is a darned fool.

    This is one of those guys who do not want to pay tax from tourism and one of them who extended island lease from 35 years to 50 years without paying a single cent to the coffers which probably is the real cause of this said to be "bankruptcy" of this government.

    Gasim should stomach being called a "boaneiy buruma" (chuck-less drill).

    And Gasim has balls to claim this government is bankrupt after all he has done to make it happen.

    The government and its one and only Abbas Adhil Riza would remain silent.

    This government has no where to hide, it has nothing to hide with.

  13. Guys, fear not. The saviour has arrived in the form of Gayyoom. He was seen begging Arabs from the Middle East with the claim that the Maldives needs a lot of $$$ to "strengthen" its Islamic values!

    You have to give credit to the guy for having such balls to lie and fabricate stories in order to get some $$$. I wonder whether anyone in those audiences are aware of how Gayyoom spent the generous donations (from Arabs to the Maldivian people), during his time on his Palace, yachts, Rolexes, luxury cars, private retreats, plastic surgery, extended shopping trips to Singapore and Western Europe and so on.

    Islamic values, my foot! The bugger should be castrated!

  14. This is of no concern to me.

    Wealth belongs to the virtuous. The bounty of Allah cannot be wasted on miscreants and harlots.


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