Joint committee’s budget evaluation underway

A parliamentary joint committee formed to evaluate the 2011 state budget was underway today, though a finalised plan for national spending is still thought to be a few days away, Acting Finance Minister Mahmood Razee has said.

Speaking briefly today during a recess of the joint committee, which is formed from members of both the finance and economic committees, Razee said that the discussions would likely be ongoing during the next few days and that he was unavailable to comment on any outcome before then.

Haveeru reported yesterday that Gasim Ibrahim of the Jumhooree Party (JP) had been endorsed as chair of the evaluation committee that consists of 21 MPs. The paper reported that 12 votes will be required to pass any matter through the committee.

The Chair position was contested by nominations from the Maldivian Democratic Party (MDP), which favoured Bilehdhoo MP Ahmed Hamza, and the Dhivehi Rayytithunge Party (DRP), which proposed Parliament’s Deputy Speaker, MP Ahmed Nazim. Both nominations failed to receive the required number of votes, Haveeru said.

The budget approval, which is constitutionally required to be complete before the end of the year, has come amidst a period of upheaval within the Majlis over the appointment of ministers, which includes a head of finance for the country. This upheavel resulted in Acting Finance Minister Mahmood Razee delivering the state budget after the country’s Supreme Court ruled on December 10 that that ministers rejected by a parliamentary vote could not hold their positions.

Parliament allowed Acting Finance Minister Mahmood Razee to present the 2011 state budget, despite Speaker Abdulla Shahid said that he would be seeking legal advice over whether this was permissible.

Deputy Speaker Mohamed Nazim put forward a motion to declare a “special situation” whereby Razee would be granted the authority to formally present the motion. The chamber voted 55-9 in favour.

The text of the Constitution requires the “Minister of Finance” to submit the budget for approval “prior to the commencement of each financial year” – in the Maldives, the calendar year.

Seven ministers – Finance Minister Ali Hashim, Education Minister Dr Musthafa Luthfy, Foreign Minister Dr Ahmed Shaheed, Fisheries Minister Dr Ibrahim Didi, Home Minister Mohamed Shihab, Defence Minister Ameen Faisal and Attorney General Dr Ahmed Ali Sawad – did not receive a majority of votes from 42 MPs in attendance within parliament last month.
Following the vote, Ahmed Thasmeen Ali, head of the opposition DRP, took the case to the Supreme Court arguing that Ministers rejected by parliament should be dismissed from office.


8 thoughts on “Joint committee’s budget evaluation underway”

  1. Let's hope these elected politicians can start to put all the silly squabbling behind them, and work together for the good of the people of the country.

  2. Interesting to note that in this article there is nothing regarding the budget deficit. MDP advocated before coming to power that their budgets will be balanced. They confirmed and promised this after they took charge of the executive. But the current budget that is being proposed paints a scary picture.

    Maumoons last term eneded with a budget deficit of 5.5 billion. According to the proposed budget document the total budget deficit for MDPs first five year will be over 22 billion. That again if all the unrealistic revenue forecasts are met. So what does this mean? Isn't it a signal that at the end of the term these guys will pack their bags and get the hell out of here. Leaving a huge burden for future generations. This indicates a loose loose situation for Maldivians in 2013. Even if MDP wins the election our future generations loose and its the same even if another party wins.

  3. Budget Book page 22, Chart 9; Budget deficit of a record -30.9% is now forecast to be reduced by half to -16.4% by end currant year. Deficit is reduced to within 5.3% by 2013.

    Mulaku MP assumes that people always believed that a budget deficit accumulates in arithmetic progression. After all that appeared to be "best practice" then!

  4. These are silly idiots who paid their way as majlis members by bribing the electorate who are mostly uneducated if not poor to accept money from these cartoons. Gasim is the guy who ruined our nation. If he knows anything about a budget he would have avoided national bankruptcy. This is like asking a thief to guard our reserves. Unless we can get away with these idiots we will end up grooming democracy and getting into more debt. Annie yet to do a single thing which would generate income to the country

  5. Calculate it by arithmetic progression or based on % of budget or GDP, deficit will still be deficit. Can't call it surplus. At the end of the day the government will finance it by borrowing or privatization. Income by privatization is not for long term and not sustainable.
    • In 2009, the 5.2 Billion MRF deficit was financed by 1 Billion MRF from foreign financing and 4.2 billion MRF from domestic financing.
    • This 5.2 Billion MRF Debt of the government will be passed to coming years, for example the 1 Billion MRF bonds needs to be financed starting from 2012 with 640 Million MRF every year and it will be bunched with financing of other foreign loans and domestic loans.
    • The external borrowing interest rate in two years has gone from average 2-3 % to 5- 6 % which is an additional cost of borrowing and financing the loans.
    • The domestic banks liquidity has gone down with investments in T-Bills which gives a higher interest rates than bank deposit rates which crowd outs the private sector from borrowing.
    • Conclusion: If the deficit is passed to the coming years with high interest burden to be repaid by the future generations and if this budget passes with estimated 4 Billion MRF deficit, it will give way for the deficit of 22 Billion MRF within this five years to be repaid by our future generations to come.
    • A deficit budget with composition over 70% allocated for recurrent expenditure will not create any additional future earnings.

    • Parliament should work to reverse the budget situation.
    • Budget Should not be more than 8 Billion MRF
    • The wage bill from President, Parliament, Political appointees, Independent institutions and then civil service should come down.
    • There is no way the value of money can be sustained if this budget is passed.
    • The priority should be given to basic needs rather than trying to do extra ordinary projects with the deficit finance.
    • The reversal of budget deficit is crucial for the economy. With deficit, commenting on the composition or budget program is irrelevant to the budget.

  6. @Addu:

    "MDP advocated before coming to power that their budgets will be balanced".

    Even if God Almighty himself promised that, there is no way he could deliver it with a Parliament like ours. The Parliament has refused to pass a bill on taxation that will provide a sustainable means of revenue.

    Governments throughout the world finance themselves by generation taxation; both private and corporate.

    We have a circus! Government has no choice but to carry on borrowing to finance itself. Parliament refuses to pass ANY legislation that will generate revenue. Until this is resolved, there is no point in coming up with an elaborate DEFICIT budget. Just pass an emergency budget so the government can carry on essential tasks.

  7. @Ahmed Bin Addu Bin Suvadheeb.
    Thanks for opening my eyes regarding the parliament.

    There is no reason why parliamentarians must pass the tax bill without establishing proper structures and mechanisms. They are responsible to ensure that our money is not swallowed by corrupt government officials. I mean our money.
    If MDPs governance is a "heyoverikan" there is no reason why they can't appoint an Auditor General who is not their puppet. Additionally we must appreciate the fact that parliament allowed the government to present the budget while government refuses to provide important expenditure details for 2010. Even the budget is full of lump sums. That doesn't equal to transparency. Parliamentarians do have moral and legal obligations. An emergency budget for 3 months is a middle gorund.

    Perhaps we do have a circus. But this circus is an advanced version compared to the previous one.

  8. What "evaluation?"

    Most of the members in the majlis have little qualification even to understand the basics of a Government "Budget".

    The poor innocent Public are under the impression that their elected representatives are busy evaluating the Government's Budget in a professional manner working hard in the interest of the Nation. Big mistake!

    All the MPs do in the Committee is write a fancy report after squabbling about their respective constituencies' local problems.

    The Actual Fact is that this report carries no weight even though it will make series of sweeping "recommendations"! When the report comes to the floor, the Chairman of the Committee will present the report. That's the end of it!

    None of the recommendations of the committee is binding nor is it a necessity for the Budget to be approved at Committee Stage before it can be voted on!

    The Majlis as a whole will vote on the Budget. Before that some over smart individual MPs might propose their own amendments for the benefit of those watching them on TV! Usually this would take the shape of allocating funds for some island's local project.

    The Budget will either be passed as proposed by the Government or with some amendments if some of the amendments proposed on the floor win enough votes.

    So nobody really cares about the Committee's Report. So what's all this big talk of evaluation? At the end of the day this "Budget evaluation" is a stupid futile exercise! It's a waste of time and just a "show" for the Public. After all the people should always be made to believe that their MPs are doing some serious work!


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