Acting Finance Minister Mahmood Razee has said progress is being made within an ongoing multi-party evaluation of the 2011 State Budget, despite claims by Ahmed Nazim, the Deputy Speaker of Parliament, that talks “have not gone well” due to a lack of details on planned state spending.
Opinion appears divided within the ongoing parliamentary joint committee evaluation, which is being overseen by members from both the country’s finance and economic committees, upon how near the budget is to being agreed upon by parliament before the deadline of the New Year.
Razee, who was allowed to present the budget this month despite ongoing battles in the Majlis over cabinet appointments, said he was confident the government could still meet its aims to cut the country’s budget deficit to about 16 per cent, despite allowing for concessions requested by opposition MPs.
The government is under considerable pressure from the International Monetary Fund (IMF) to reduce the deficit, which President Mohamed Nasheed last month said was around 26.5 per cent.
Speaking to Minivan News today, Razee claimed that the parliamentary joint committee was generally “committed” to trying to find an agreement that would allow for reductions of the budget deficit. He therefore hoped to have the evaluation completed by Sunday, December 27.
“The basic principles [of the budget] remain the same, the budget deficit needs to be reduced and this is accepted by most parties,” said Razee. “We maybe will need to make some adjustments during the evaluation. A budget deficit of 16 per cent is what we are targeting given the current circumstances.”
Ahmed Nazim conceded that a need to meet a looming New Year deadline to approve the 2011 budget would require members within the parliamentary committee to put aside their political differences and “let bygones be bygones”.
However, the parliament Deputy Speaker claimed that the finance Ministry has “not been communicating” with the Majlis on the budget, a situation he said that was reflected within the evaluation process.
Nazim cadded that anticipated delays in providing information on the budget could make the discussions “go right to the wire” in terms of meeting an evaluation deadline of December 30.
“We are not looking for concessions, the government has a mandate to pursue its own economic policies,” he said. “But there are so many problems with the budget, which is lacking details regarding a number of projects and figures.”
As the evaluation process has continued, Nazim claimed that Information had been arriving “in bits and pieces” to help provide greater detail on budgetary spending, however he said expected that the evaluation process will ultimately take a “long time” to complete.
“We are looking for a reasonable budget,” said Nazim. “Reasonable, like for example, with housing funds, where the government is looking to sell land in Male’, but where is the land that can be sold? They have gone on to say it will actually be land in Huhlumale’ and other islands.”
Due to the levels of cost involved, the Deputy Speaker added that the evaluation committee has “asked for breakdowns” regarding individual expenditure – pointing to an apparent lack of funding in the budget for the Maldives National Broadcasting Corperation (MNBC), despite the government admitting it will be providing money.
“There is no budget [for MNBC], yet they have given Rf54 million [to the broadcaster],” claimed Nazim.
Mohamed ‘Kutti’ Nasheed, an independent MP who is not involved with the evaluation committee, said that despite holding some preliminary concerns over spending allocation, particularly in areas such as decentralisation, he believes the budget will be completed within its New Year deadline.
“I think it will be done, there is willingness,” he said.
However, Nasheed claimed that he had been concerned that the initial budget had failed to outline any finance plans for local councils once they are expected to be formed following February’s elections.
Beyond trying to outline funding of the state for the year of the ahead, the passing of the annual budget within a constitutionally mandated deadline of the end of the calendar year is also being seen as vital to groups such as the IMF.
Back in November the IMF delayed its third disbursement to the country because of the government’s inaction on the matter of the budget deficit during 2010, pending the release of the 2011 budget.
While the IMF program itself is worth US$92.5 million, other foreign donors and investors consider the IMF’s opinion of a country’s fiscal policies when making decisions.