Independent institutions raise concerns over budget cuts

Several independent institutions, including the Maldives National University (MNU), have raised concerns over cuts made by the Finance Ministry to their proposed budgets for 2012.

The program-based budget submitted by some of the institutions was revised by the Finance Ministry to maintain recurrent expenditure in line with projected income.

The Rf 14.6 billion (US$946.8 million) state budget for 2012, was submitted to parliament on November 28 by Finance Minister Ahmed Inaz. It is now being reviewed by parliament’s budget review committee headed by local business tycoon, MP Gasim Ibrahim.

The committee met with senior officials of the Local Government Authority (LGA) and the MNU this week, as well as several other institutions, during which they  complained about cuts made by the Finance Ministry during the revision process prior to the submission to parliament.

MNU Chancellor Dr Musthafa Luthfy told the budget review committee that the initial budget proposed by the university was Rf191 million (US$12 million), which was reduced to Rf174 (US$11 million) on the Finance Ministry’s request.

However, according to Dr Luthfy, the ministry then cut down the university’s budget by a further by 22 percent, reducing the total budget for 2012 to Rf136 (US$9 million) – which he noted was “too small to run the university development programs planned for next year”.

He also said the university would be unable to hire qualified professors, and that new courses starting in 2012 would be negatively affected.

Local Government Authority (LGA) members said the Finance Ministry had downsized the proposed budget by 63 percent, reducing it to Rf13.8 million. Major reductions were made to the budget allocated for training and salary items.

According to the authority, the budget cuts will bring forth several problems in consolidating the decentralisation process.

Meanwhile, the budget proposed for two city Councils has also been reduced. Though a total budget of Rf295 million (US$19 million) was proposed by Male City Council, it was reduced to Rf140 million (US$9 million) and the proposed budget for Addu City Council was cut down by Rf100 million (US$6.5 million) leaving only Rf69.3 million (US$4.5 million).

Members from both City Councils have been quoted in local media as saying the cut backs would hinder city development plans and would cause the Council to fall behind in delivering services. They have asked the parliament to revive the amount.

Speaking to Minivan News, Deputy President of the Anti Corruption Commission (ACC), Muaviz Rasheed, said that the commission needs a minimum Rf27.7 million (US$1.8 million) for 2012 to smoothly run the office, provide training and conduct investigations.

However, the Finance Ministry had allocated Rf22 million which was Rf5 million less than the proposed budget, and slashed the staff training budget to “zero”, according to Muaviz.

“We need to provide professional training to staff to develop their investigation skills. There are also ACC employees who are gaining professional education abroad who are contracted to continue work here upon their return. But with no training budget, we won’t be able to continue financing their education. It would be a great loss to the institution,” he said.

With mounting concern from several institutions about the budget cutbacks, the parliament committee is expected to revise the budget before submitting it to the floor for final vote.

Finance Minister Ahmed Inaz told Minivan News today that the ministry is currently discussing “budget concerns” and will make a formal statement on Tuesday.

During the budget introductory statement he made at the parliament, Inaz said the program-based budget was prepared with special focus on producing results and maintaining recurrent expenditure in line with income.

“The programs included in the budget are based on the Strategic Action Plan,” he explained. “Special attention has been given in the budget programs to provide adequate and quality service to the public. The government’s aim is to match up the figures in the budget with development plans and ensure that all state expenditure is made to achieve a stated target.”

Steering committees have been formed to oversee the 31 programs in the budget, Inaz continued, urging MPs to also evaluate the progress of implementation over the course of the year.


14 thoughts on “Independent institutions raise concerns over budget cuts”

  1. So no developments for the University? Then why call it that? Why not just let it have remained as a developing institution that would need further strengthening to reach the goal of becoming University.

    With the expected worsening of the dollar crisis and failure to contract State expenditure, we are condemning future generations to lose the opportunity to explore places outside the Maldives. This eye-opening experience has created persons of value in this country. Most of the significant individuals in the country such Maumoon Abdul Qayyoom, Mohamed Nasheed, Dr. Munavvar, Dr. Hassan Saeed, Qasim Ibrahim etc etc. have interacted with the outside world and brought much to this country through those experiences.

    By dooming young generations to spending their lives in the closed-off environment of Maldives without being able to focus on improvements to our society is similar to garroting the youth and leaving them to bleed to death.

  2. The very same "business tycoon", Gasim Ibrahim, is responsible for a lot of the ballooning budget deficit that he started under Gayyoom. Gasim did not (and still doesn't) have the capability of overseeing the national budget of a country.

    His own businesses are borrowing in order to repay existing loans. Loan upon loan are used to fund his "enterprise". This will catch up with him one of these days when he fails to roll over the interest on all those loans. Previously, his chums including Gayyoom, "facilitated" various financing schemes for this so-called "tycoon".

    It's sad to see the National University having to survive with such a limited budget at a time when tertiary education needs expansion in order to provide the engine of growth for the economy.

    I understand the government's dilemma. They have too high a payroll and too little income to finance all of this. They simply cannot make people redundant or cut their pay, since it will backfire politically for them. The only long term solution, as they full well realise, is to cut the scale of the public sector. This can only be done gradually as it will otherwise destabilise the country further. These are tough choices in tough times.

  3. I'd further add to the concern over the severe cuts to funding of the National University. The only chance we have of producing future generations who are not myopic and vulnerable to being brain washed by hardline religious fanatics, is through education. Any cut to this lifeline is a serious threat to the future integrity of the country and this democracy we seek.

    When any government starts to cut into the education budgets of a nation, it's a sign that the government has miserably failed in its priorities. Having to spend the vast majority of the state budget on "seat warmers" is consigning the country's future to the dust bin.

    This government just doesn't have the political will and courage to make the tough decisions necessary to bring about a sea change in our country. Sad but true.

  4. Where did the finanial literacy go? How is that the finance ministry be able to give away any amount of cash to any institution who request? Where is the finance ministry suppose to find this money from?

  5. Independent? Institutions? What a laugh!

    More like black holes swallowing the budget with hardly any results to show for their existence.

    Where is the return on investment for the public? For a small country we have way too many of these so-called "independent institutions" who hardly perform any of the functions they were originally envisaged for in the Constitution.

    All they do is guzzle up fat salaries and other over heads and fancy travel for these guys who seem to be above any law.

    Take the Human Rights Commission? What exactly did they do to promote human rights during the last year?

    Might as well merge a few of these institutions and close a few.

  6. Local Governments, including the two City Councils are supposed to develop their own infrastructures through grants, aid, and cooperation with foreign partners. Their entire budget is not supposed to be supplied by the government. And they are whining about not being able to hire more people?! When they already have more people then they need!!! They have more than enough councilors to focus on every issue that a local council needs to focus on. But do these people even come into the office?!

    Across the country I've heard reports that less than half the councilors come into the office more than 2 times a week!! That is horrendous!

  7. Local governments have not been given the autonomy to their own resources. If the central government is still in control of the natural resources of the atolls, then the central government is responsible for providing the budget. It's a double edged sword for the local governments, their budgets get cut, and they're told to raise their own capital, but the means to do so is denied, and the government continues to disburse of their resources for long term leases through a special purpose vehicle called the planning council. People should really go and actually talk to these communities and understand the desperate situation they are in. It's pathetic really, that some pole continue to sell this as decentralization and democracy, when it cudnt be further from the truth. There are entire atolls where there is no gynecologist or paedriatrician, and they r still running their schools on two shifts, and the ambulance launch is broken for over 2 years. They hAve no assets, and no control on how to raise the capital for their basic services

  8. I have to agree with you Jeff. This constant cycle of wanting to hire more people to do 'their' work is madness.

    The trend of wanting professional development abroad is evident across many institutions. People somehow do not see knowledge sharing and networking within the institutions as professional development. With the amount trips people take abroad in the name of Professional development, we ought to have highly knowledgeable and skilled people by now. I'm sorry to say this, but a lot of them waste the opportunity for sightseeing and shopping. I've seen this many times.

  9. we all see the University getting lower budget. But do we see them getting affiliated with any institutions such as Anti Corruption, Civil Service commission and JSC to accomodate for tertiary level trainings required by these institutions. Instead These institutions have allocated millins for trainings. Its also an irony when they hire staff with high salaries to these posts, they keep providing training, except for CSC. I think only civil servants should be provided with such trainings and JSC and ACC and Auditor generals office should not do so as they can pay good salary and hire professionals unlike CSC, which has an excess baggage full of crappy people who need every sort of trainings.

  10. All good points. I take back some of my statements.

    We all agree that the University needs strengthening to justify the allocation of funds to it. However that places us in a catch-22. Such strengthening also requires funds.

    Focusing on development is a no-no for us at this stage I guess. However I would like to know what the commentators on this forum think about the following issues.

    - 40 % pay raises for the security forces.
    - Loan schemes for development of nation-wide medical infrastructure with guaranteed payments out of the State budget for such businesses through the proposed Universal health care scheme in the current economic climate.
    - Short-term measures to mitigate the effects of the worsening dollar crisis.

  11. @tsk tsk

    1. 40% pay raise for the security forces under cuts the very important policy argument of the government to reduce public expenditure. This is a very stupid knee jerk idea.

    2. Loan scheme medical infrastructures has a nice sound to it. But without a plan on comprehensive nation wide detailed plan on what the desired goals are, this is going to be a waste of funds and a missed opportunity.

    3. "Dollar crisis". There is no such thing as a "dollar crisis". What we describe as a dollar crisis is merely a symptom of more serious illness, namely the inability for us to solve our fiscal problems. Unless the root cause of the problem is addressed, there is no point in short term mitigation.

    Just my two cents worth!

  12. - 40 % pay raises for the security forces.

    This was raised in Parliament by the economic pundit of Kaamineege. The government has not denied it and we can assume it to be true at this stage. If so, then this would be a very stupid move and counter to the governments publicly voiced agenda.

    I also simply do not understand the justification for a MRf 4 billion short fall in next years budget, since the government's project income is only MRf 10 billion. In the past the government has gone repeatedly, with the begging bowl in hand, to the Indians. The Indians have continued to bail it out, and the details of these Indian loans are as clear as mud. This is a hefty burden that's being placed on the country by this regime.

    The not-so-honourable members of Parliament ought to ask a few more questions over these and other budgetary miscalculations.


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