Parliament has begun debate on the MVR 16.9 billion (US$1 billion) state budget for 2013 submitted by Finance Minister Abdulla Jihad last week.
At the beginning of Tuesday’s sitting, Speaker Abdulla Shahid read out a letter from President Dr Mohamed Waheed Hassan Manik requesting parliamentary approval for loans and government guarantees in the coming year.
Parliamentary approval for loans is required under amendments brought to the Public Finance Act in 2010.
Speaker Shahid announced that the President’s request was sent to parliament’s Finance Committee for consideration and review.
Minivan News understands President Waheed requested parliamentary approval for loans amounting to over US$96 million.
Presenting the budget to parliament last week, Finance Minister Jihad explained that next year’s budget deficit was to be financed with MVR 971 million (US$62 million) as budget support and MVR 1.3 billion (US$84 million) from Treasury bill (T-bill) sales.
Of the MVR 971 million estimated as budget support, MVR 671 million (US$43 million) was expected as foreign loan assistance, Jihad said, with the rest to be made up from “domestic finance.”
Jihad told parliament’s budget committee on Sunday that a large number of T-bills were sold to Champa Brothers – at an interest rate of about eight percent – when the Maldives Monetary Authority commenced sales to private parties in August this year.
Sun Online reported that Champa Brothers purchased T-bills worth US$11 million.
MMA T-bills of maturity dates of 28 days are sold at 7.73 percent interest, 91 days at 7.70 percent interest, 182 days at 7.55 percent interest, and 364 days at 7.70 percent interest.
Speaker Shahid announced that the debate would take place from 9:00am to 5:00pm with intervals until Thursday.
During Tuesday’s debate – which proceeded haltingly due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies, such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.
In his budget speech (Dhivehi) last week, Jihad revealed that the public sector investment programme (PSIP) for 2013 included construction and repairs of harbours in 14 islands, establishing sewerage systems in 11 islands, water systems in three islands, 1,500 housing units in eight islands, 21 new mosques and upgrading the regional hospitals in Kulhudhufushi and Addu City to tertiary level.
Jihad said MVR 3.1 billion (US$201 million) was earmarked for the PSIP, with MVR 1.5 billion (US$97 million) from the state budget, MVR 21 million (US$1.3 million) from domestic loans, MVR 1.2 billion (US$77 million) as foreign loans and MVR347.6 million (US$22.5 million) as free aid.
Speaking first during Tuesday’s debate, MP Ali Waheed of the formerly ruling Maldivian Democratic Party (MDP) said there were no funds or projects in the budget for his constituency or the neighbouring island of Mahibadhoo in Alif Dhaal atoll.
The MDP parliamentary group deputy leader insisted that the government should continue implementing the former ruling party’s manifesto.
Government-aligned Dhivehi Rayyithunge Party (DRP) MP for Kelaa, Dr Abdulla Mausoom, expressed concern with taking more loans to finance the budget deficit while the public debt was expected to reach MVR 31 billion (US$2 billion) in 2013 – 82 percent of GDP.
Considering the high levels of debt, Dr Mausoom observed that his each of his constituents in Kelaa in the northernmost atoll of the Maldives “are indebted by MVR 85,000 (US$5510)”.
As a consequence of “unequal development of the country,” said Mausoom, there was no sewerage in the islands of Kelaa and Filladhoo.
The DRP MP criticised the administrations of both Presidents Maumoon Abdul Gayoom and Mohamed Nasheed for running up huge deficits and public debts, claiming that public debt “shot up like a rocket” during the three-year rule of the latter.
DRP MP for Kanditheemu, Mohamed Hussain, meanwhile protested over zero funds allocated for the island of Goidhoo in Shaviyani Atoll, part of his constituency.
The MP contended that smaller islands were neglected during formulation of the budget. He added that details of what was needed for the islands were shared with both President Waheed and Finance Minister Jihad prior to the drafting of the budget.
While he did not propose expenditure of more than half a million for the three smallest islands in Shaviyani Atoll, there was “a blank space next to Goidhoo” in the budget.
Local media reported that islanders of Goidhoo launched protests this week over the lack of funds allocated for development of the island.
Independent MP for Vaavu Atoll Velidhoo, Ali Mohamed, said his constituents in Foddhoo have been protesting at the island council for the past five days because the island’s pier was “crumbling” and damaged beyond use.
MDP MP for Ihavandhoo in Haa Alif atoll, Ahmed Abdulla, objected to infrastructure projects for the constituency approved in the budget for 2012 having come to a standstill.
MP Ahmed Abdulla claimed that MVR 10 million from a MVR 70 million loan from the Bank of Maldives had been disbursed but a planned sewerage project for Ihavandhoo did not commence this year.
Meanwhile, at the beginning of today’s sitting, Speaker Shahid said MPs should be “ashamed and embarrassed” that debate was only able to continue yesterday for two and a half hours out of six hours allotted in the agenda.
Yesterday’s debate was frequently interrupted by loss of quorum and was eventually cancelled around 4:00pm. At least 20 MPs are required to be in the chamber for sittings to proceed.
Shahid appealed for cooperation to let all MPs speak before the conclusion of the budget debate on Thursday.