Loans and guarantees pass as opposition walks out

Parliament today approved the government’s borrowing summary totaling Rf5.5 billion (US$358 million) proposed by the government for 2012 amidst political disturbances within the Majlis.

Minivan staff observed opposition party members leaving the Majlis as ruling Maldivian Democratic Party (MDP) members remained inside to approve the supplement to the 2012 State Budget.

Opposition Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam said the party walked out “because we believe PPM [Progressive Party of Maldives] sold out the vote to MDP.”

According to Adam, suspicions were raised when the chair of the Public Accounts Committee attempted to vote with the opposition. She said eight PPM members created a disturbance when the vote was presented, and were forcefully removed by the military.

She suspected the scuffle had been planned.

MDP MP Hamid Abdul Ghafoor confirmed that damage was done to the Majlis chamber, and noted that MDP MP ‘Reeko’ Moosa Manik’s seat name tag was “crushed”.

Ghafoor also believes that the display was calculated.

“Why would some people walk out and accept the decision, while others make a show of it?” he asked, noting that the Majlis has a precedent of requesting the removal of those who disturb proceedings.

However, Ghafoor believed the episode was understandable “in the context of a transitional democracy, in which the previous regime is allowed to be politically active.”

According to law, the Majlis must approve all foreign loans separately from the budget, which was approved earlier this week with 70 votes in favor, two against and one abstention.

The Rf14.6 billion (US$946.8 million) budget was passed with Rf3.5 million (US$226,977) added through amendments proposed by opposition MPs.

Dhivehi Rayyithunge Party (DRP) proposed shifting Rf300 million (US$19 million) from other items to local councils, increasing funds for political parties from Rf11 million (US$713,000) to Rf14.5 million (US$940,337) and raising state benefits to the elderly from Rf2,000 (US$130) to Rf2,300 (US$148) to adjust for inflation.

Foreign loans will be allocated for budget support, construction of Addu Hospital and support for middle-income businesses, fishing and agriculture.

The highest loan is valued at US$150 million, to be borrowed from China’s Exim Bank.

Although the Finance Committee approved the borrowing summary it nevertheless highlighted important missing information. According to MP Adam, committee members today found discrepancies between the document approved yesterday and the version submitted to Parliament today.

When asked about the discrepancies Ghafoor identified them as “speculative–conspiracy oriented” and asserted that “all possible details were submitted, but the opposition said it did not confine to the strict guidelines of the law. Of course there are some points and details which can only come after the it is approved.”

“It’s a foregone conclusion, the budget was passed and you assume that to cover the deficit, you have to take loans,” he said.

Parliament is now in recess until March.


4 thoughts on “Loans and guarantees pass as opposition walks out”

  1. Financing support from loans is all well and good. However consider the risks this country is facing.

    Confidence in the government is low and especially when it comes to fiscal matters. Speculation alone would drive prices up. The real exchange rate is expected to rise and the resulting increase in prices coupled with the burden of taxation threatens to drive consumption low.

    The government should have followed suit by pursuing less ambitious goals. Then again Nasheed wants to get re-elected so come hell or high water money is going to be spent.

    Is the populace ready for the inevitable crunch? Does the Maldives as a whole really understand the situation it is in? I do not think so. We need to create more focus on economic issues. I agree that every Ahmed and Aisa cannot comment at the policy level. At least they should be provided information on the real economic situation in this country.

    Someone needs to step up because the media is too politicized. Minivan mostly glosses over the actual situation while emphasizing government aspirations and goals rather than results. Haveeru caters to the public like any big franchise and pays mere lip service to highlighting non-political issues. The rest of the dailies are not widely read. The government channel is a joke and the other two private broadcasters are too busy promoting opposition causes.

    The Civil Society should step up on this front without immersing themselves in politics, governance and abstract rights advocacy. Then again most Civil Society organizations serve the political ends of one party or another.

    The reality is the government has pushed through another State Budget that is designed to drive up the cost of living and increase liquidity. The US Dollar exchange rate on the black market is expected to hit around 19 rufiyaa for a dollar very soon. This means our import-dependent economy will experience a period of rising costs. The political atmosphere is becoming increasingly confrontational so it becomes almost impossible to have this conversation at a national level without financial and coordinating support.

  2. @ tsk tsk: Where were u when the country was in debt since Former President Maumoon's administration? Its this government that cleared his mess. And its this government which will help make our lives better.

    We cannot keep going to the beach whenever nature calls or keep facing the difficulties in getting clean water or keep hoping for a better harbour. If you would like to wait, please do so but let our lives benefit from those loans. =)

  3. Get off your high horse and read the fine script.

    These loans are being spent on non-revenue generating ventures. I would wholeheartedly support loans and sovereign guarantees if they were being used for a worthwhile cause. Please note;

    - The fishing industry needs a turnaround investment and yet the government has failed to include it.

    - The government has made no real attempt at economic diversification except for making loud declarations promoting mid-market tourism without putting any real thought into how such a major industry can be developed.

    - Injecting liquidity into the economy for political purposes only creates more demand for US dollars resulting in an increasing real exchange rate. So expect economic hardship across the board.

    - I have never and will never support building quay walls and docks in islands with populations less than a 1000. It only serves a political purpose while wasting a lot of taxpayers money.

    - Qayyoom's last years following the tsunami is not the only period of his rule and he is not the only ruler we have ever had. So do not pretend that comparing Nasheeds haphazard spending habits to a panic-stricken Qayyoom's floundering expenditure following 2004 vindicates the current government and their misrule.

  4. Government is biased, political parties are biased. Civil Society is biased, that leaves the messias such as these with the truth of the matter...thank god you exist!


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