The government has refused to comment on claims made in local media by leader of the coalition-aligned Jumhoree Party (JP) that the Maldives was now bankrupt and already unable to pay some civil servants.
JP Leader and MP Gasim Ibrahim claimed that despite government efforts, the Maldives was now bankrupt and unable to pay some civil servants after steady economic decline within the nation, according to newspaper Haveeru.
Just last month, Parliament’s Financial Committee revealed that expected revenue for 2012 had plunged 23 percent, whilst spending was set to increase by almost 24 percent.
President’s Office Spokesperson Abbas Adil Riza today said that he was unaware of the bankruptcy comments linked to Gasim and could not comment on the matter, referring Minivan News to Minister of Finance and Treasury Abdulla Jihad.
Both Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls by Minivan News at the time of press.
Although the country’s Civil Service Commission (CSC) said that it had been involved in discussions with the Minister of Finance to try and overcome economic concerns, Chairman Mohamed Fahmy Hassan said that there had as yet been no issue with payments to staff.
“As of last month, all payments have been made in full, however it is the Finance Ministry who would know about the current situation,” he said.
Speaking to Minivan News on Saturday, Maldives National Defence Force (MNDF) spokesperson Major Abdul Raheem said despite some reports circulating to the contrary, he was not aware of any problems with payments to military officers.
Spending review
In attempts to counter its present spending shortfall, the government has unveiled proposals such as a revision to the country’s import duties and Goods and Services Tax (GST) to alleviate its financial difficulties.
The proposals have come under criticism from former finance chiefs serving under the previous government, who allege that such changes “do not make sense”.
Whilst committed to reducing state expenditure, Jihad recently announced his aim to avoid cutting the salaries of civil servants in order to tackle the nation’s budget deficit, seeking to make savings in other areas of expenditure first.
“Civil servants are the lowest ranking of all government employees. We will try to cut all non-wage expenditure by 15 percent. Salaries will be considered after this,” he said at the time.
Despite this pledge, Jihad added that a review of public salaries was set to be conducted by a pay review board that would also focus on independent commissions in order to reach an agreement on the necessary reductions.
Civil Service salaries
Between 2004 and 2009, the country’s fiscal deficit increased exponentially on the back of a 400 percent increase in the government’s wage bill.
The year’s 2007 to 2009 included the most significant largesse as the World Bank found wage expenditure to have increased from Rf 2 billion to almost Rf 5 billion even as revenues began to recede.
According to statistics from the Civil Service Commission (CSC), the number of permanent civil servants has more than halved between 2006 and June 2011. There has been some contention in the past, however, that the transfer of many civil servants to state owned companies under the previous government masked the true figures.
The Maldives Monetary Authority (MMA) published figures for May that estimated the government will spend Rf2.6billion (US$168 million) on salaries and wages in 2012.
Maldives Bankrupt?
JP Leader Gasim – himself a former finance minister – claimed the Maldives had already been bankrupted after steady economic declines in recent years. He said that the evidence of the country’s troubled economy may not be immediately apparent, but would be seen in the “near future” as the state lacked the “necessary finance” to settle debts, according to Haveeru.
Gasim was reported as saying that “pointing fingers and blaming others” would not provide the country with an economic solution, calling instead for parliament to pass bills to alleviate the economic situation. The nature of these bills were not specified in local media.
Gasim’s phone was today switched off, while JP presidential candidate Ibrahim Didi was not responding to calls.
However speaking to local media, the JP leader added that the “actions of some” had negatively impacted on the nation’s economy, pointing to what he claimed were calls for a boycott of the Maldivian tourism industry.
Gasim, Maldives Vice President Waheed Deen and Progressive Party of the Maldives (PPM) MP Abdulla Jabir are among a number of figures associated with the present coalition government that are included in a list of resort owners included in the Maldives Tourism Advisory (MTA).
The advisory, established by the Friends of Maldives NGO, has a website utilising a ‘traffic light’ system recommending guests avoid resorts alleged by the Maldivian Democratic Party (MDP) to be directly linked in bringing about February’s controversial transfer of power.
Travel associations in the country have in turn criticised the MTA, expressing “serious concern” over what it alleged was a “concerted international campaign against several of the country’s resort operators.
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