Tag: budget

India reported to be releasing further credit to Maldives

Indian media has reported that the country will re-open its US$100million standby credit facility to the Maldives during the scheduled visit of newly elected President Abdulla Yameen later this month.

Whilst the President’s Office was unable to comment on the validity of the story, the New Indian Express has today reported that the Indian Government is expected to “unfreeze” the remaining part of the loan.

The Indian government agreed to grant the facility during an official state visit by Prime Minister Manmohan Singh in 2011, in order to help the Maldives meet short-term budgetary needs.

The first installment of US$30 million was granted in October 2011, with a further installment of US$20million released in time for the early 2012 visit of President Dr Mohamed Waheed to India.

A third installment of the facility however, was delayed after tensions between the Indian and Maldivian governments rose just weeks ahead of the eviction of the Indian GMR group which had been undertaking the development of Ibrahim Nasir International Airport.

Whilst the official reason given for the delay in the disbursal of the third loan installment was described as a result of the Maldives Government’s failure to complete the required paperwork, a diplomatic source at the time suggested that perceived anti-Indian rhetoric from senior political figures could yet have a bearing on future financial assistance.

The failure to secure the third credit installment was soon followed by the Indian government calling in US$100 million worth of debt.

Despite the current governing Gulhifaivaa Coalition comprising many of the parties that made up the previous administration, President Yameen has made improved relations with India a top priority after winning the November 16 run-off election.

Yameen’s PPM suggested the termination of the GMR agreement – currently the subject of a US$1.4 billion arbitration case in Singapore – was done against its advice.

In the weeks following his assumption of office, Yameen has talked openly of the potential of Indo-Maldivian relations, whilst the Indian High Commissioner to the Maldives has called the country’s bilateral ties “privileged”.

After Yameen had written to Indian PM Singh inviting him to visit the Maldives as soon as he was able, the President’s Office announced this week that Yameen would be visiting India on his first official state visit on December 22.

Budget support

Local media has today reported that a revised budget will be sent to the Majlis today, after repeated delays required to accommodate the campaign pledges of President Yameen.

Finance Minister Abdulla Jihad – reappointed to his position under the new president – had presented a MVR 16.4 billion budget for 2014 with a projected deficit of 2.5 percent of GDP to parliament on October 30.

Yameen has expressed concern over the economic vulnerability of the Maldives and pledged to reduce state expenditure by MVR 1 billion.

“State debt is sky high. The state budget’s expenses are extremely high. Hence, we have to prioritise reducing state expenditure. I will start work very soon to reduce budget expenses,” Yameen said during his inauguration speech.

The Maldives Monetary Authorities’ (MMA) most recent quarterly review noted that Government finances had “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure.

“These developments have resulted in a widening of the budget deficit as indicated by the large financing requirement of the government during the first six months of 2013. The difficulties in accessing long-term foreign funds to finance the budget deficit resulted in the government resorting to the Maldives Monetary Authority and other domestic sources to finance its growing deficit,” the report stated.

The Yameen administration also announced earlier this week the securing of 50 million yuan (US$8.2 million) in Chinese grant aid “for the implementation of developmental projects and the advancement of public services.”

The MMA’s November figures showed that gross international reserves had fallen in monthly terms whilst showing a slight year-on-year increase. The country was reported to have enough reserves to cover 2 and a half months’ worth of imports.

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STO head assures oil imports problem will be resolved

The Managing Director of the State Trading Organisation (STO) has assured that the country’s looming oil payment crisis will be resolved tomorrow after the central banking authority committed to financing overdue payments.

“MMA [Maldives Monetary Authority] has given certain commitments – we still need to arrange everything – tomorrow we are going to work on it,” Shahid Ali told Minivan News today.

Shahid told MPs last week that the STO would run out of oil as early as November 10 if it did not pay some of its US$20million oil debt.

“The exact amounts have not been agreed upon,” Shahid explained today (October 3). “Tomorrow we need to make at least some payments.”

During an emergency meeting of the Majlis Finance Committee last week – with both MMA Governor Dr Fazeel Najeeb and Finance Minister Abdulla Jihad in attendance – Shahid told MPs that government-owned companies owed the STO more than MVR600 million.

Jihad informed the committee that he had asked the MMA to provide MVR50 million to the STO but was told that the central bank could only arrange for MVR20 million as the public bank account was overdrawn.

The MMA governor said the state did not have the financial resources to provide the requested amount, adding that the central bank would be forced to print money to meet the government’s requirements.

In the event that the country runs out of oil on November 10, Jihad then said he would resign from his post.

“I am asking the MMA for cooperation to provide the funds. This is a basic necessity. Otherwise there is a fear that we could completely run out of oil. Funds have to be arranged for citizens’ basic needs even if the public bank account is overdrawn,” he said.

Minivan News was unable to reach Dr Najeeb at the time of press.

When asked if the MMA was printing money in order to finance the oil payments, Shahid simply repeated that the authority had “given certain commitments”.

The MMA’s quarterly figures show that the Maldives’ petroleum imports amounted to US$248.4 million in the first half of 2013 – representing 29 percent of the cost of all goods brought into the country.

Najeeb also told the Majlis Public Accounts Committee last week that state reserves were insufficient to balance the country’s growing deficit.

Local media reported Najeeb as warning that the state was on the verge of being forced to print money.

“Parliament must also consider ways to reduce the structure of the State. I think this is very serious. Or else, the value of our money will keep dropping,” the Governor was quoted as saying.

The MMA’s most recent Quarterly Economic Bulletin revealed that government finances had “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure.

After measures to raise 15 percent of total revenue budgeted for 2013 – MVR1.8 billion (US$116.7 million ) – failed to materialise, Finance Minister Abdulla Jihad was forced to seek parliamentary approval to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

In recent months, the government has become increasingly reliant on the issuance of short term treasury bills in order to plug gaps in the current budget.

Whilst introducing a proposed MVR16.4 billion (US$1 billion) budget for next year to the Majlis last week, the Finance Minister urged the government to pursue austerity measures.

In November 2012, a team from the International Monetary Fund (IMF) advised that strengthening government finances was “the most pressing macroeconomic priority for Maldives”.

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PPM manifesto released to criticism over economic plans

President Dr Mohamed Waheed’s running mate Ahmed Thasmeen Ali has said the Progressive Party of Maldives’ (PPM) “concerning” proposal to slash the state budget by MVR 4 billion ($259.9 million) lacks critical detail.

PPM released its three-part manifesto on Tuesday (September 3) – just four days before the presidential election.

Cautioning that such a large reduction required careful adjustments, Thasmeen said that the proposed cut would have a negative impact on development projects and subsidies, reported Haveeru.

Thasmeen added that minimizing waste and promoting operational efficiency in the government would not yield sufficient funds.

His critique echoed concerns voiced by other MPs, including PPM presidential candidate Abdulla Yameen, over last year’s budget cutbacks.

Yameen has promoted himself as being strong on economic policy, with posters across Male’ touting him as the electorate’s best choice for an economic recovery.

Budget cutbacks attracted sharp responses from political parties in December 2012, after Parliament’s Budgetary Review Committee reduced the state budget by MVR2.4 million ($1.5 million).

Government-aligned Dhivehi Rayyithunge Party (DRP) Deputy Leader and MP Abdullah Mausoom tweeted at the time that the cutbacks were “a deliberate attempt by MDP and PPM to ‘choke’ government and institutions by 2013”.

Yameen – then PPM’s Parliamentary Group Leader and a member of the review committee – observed that, based on the proposed budget cuts, the government’s policies were unclear.

Minivan News was unable to obtain comments from PPM spokespersons at time of press.

PPM Manifesto

The PPM’s ambitious proposals target legislation, administration and infrastructure in multiple areas. The party’s plans include a youth, a sports, and a ‘Yageen’ manifesto – the latter derived from the party’s campaign slogan ‘Yameen Yageen’, or ‘Yameen for Sure’.

The ‘Yageen’  manifesto outlines programmes targeting health, fisheries, decentralization, women’s rights, national security, agriculture, transport and tourism.

According the sports manifesto, athletic programs would receive new facilities and equipment, complemented by legislation to develop young talent. Sports administration would be facilitated by a Sports Act and a Maldives Sports PLC in partnership with all national sports associations, which would draft agreements to pay professional players.

The manifesto also states that all islands would receive a sports arena and Hulhumale’ would be developed as a youth entertainment city, including a National Aquatic Centre of olympic scale. Taxes on sports materials would be reduced from 25 to 5 percent.

According to the ‘Yageen’ manifesto, policies on education would expand teaching of the Quran and arabic language throughout the curriculum, and offer both expanded vocational and higher education opportunities. Educational centers would benefit from teacher training, expanded space, improved counseling services, and “modern libraries” equipped with digital facilities.

On the subject of women’s rights, the manifesto proposes subsidized childcare system, allowing women to work from home through the internet, and connecting them to employers. Gender quotas in the political arena and leadership skills courses for girls are also included, intended to equalize the workplace gender balance.

Other proposals include reviewing national legislation on women, particularly in the areas of marriage and divorce, property, and crime.

To build connectivity within and between atolls, the PPM “ensures” that every island will have access to air transport through regional airports, to be complemented by a ferry network. The party states that, in addition to expanding the services of Maldives Transport and Contracting Company (MTCC) and Island Aviation, it will invite private companies to operate transport facilities.

The manifesto did not detail budgetary provisions for these proposals.

Download the manifestos in Dhivehi.

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MMA slams state spending as government claims expenditure curbed

The Finance Ministry has said it has managed to reduce state spending over the last twelve months, despite the Maldives central bank raising fears over the current “beyond appropriate” levels of government expenditure.

Finance Minister Abdulla Jihad has told Minivan News yesterday that efforts had been successful over the last twelve months to curb recurrent government expenditure, while its borrowing had at the same time remained consistent.

According to Jihad, the government’s decision in April to suspend state-financed development projects had also helped to curb outgoings as the country looks to secure foreign finance for the purpose of budget support.

“We have had difficulties this year with spending, so we have taken these initiatives,” he said.

The suspension of development projects was taken after the state was found to have exhausted its annual budget for recurrent expenditure (including salaries, allowances and administration costs) in the first quarter of 2013

The decision was made in same month that currency reserves in the Maldives were found to have “dwindled to critical levels”, according to the World Bank’s bi-annual South Asia Economic Focus report.

State borrowing

Jihad said that state borrowing had remained consistent over the last year, after the Waheed administration had paid back US$100 million in treasury bonds to Indian authorities by a requested date of February 2013.

Earlier this month, President Waheed pledged that the country would be in a position to restart development projects next year as a result of his government repaying bills incurred through the previous administration’s borrowing.

While President Waheed had previously said he would not resort to borrowing from foreign governments in order to finance his administration, Jihad today confirmed the state was “moving ahead” with efforts to secure credit from overseas sources in Saudi Arabia and Sri Lanka.

Earlier this month, the government requested parliament approve a US$29.4 million loan from the Bank of Ceylon to finance the 2013 budget approved by parliament.

In July, the President’s Office confirmed that discussions had been held with Saudi Arabia seeking a long-term, low interest credit facility of US$300 million to help overcome the “fiscal problems” facing the nation.

Parliamentary approval would be required for the credit facility before it could be obtained by the government, Jihad added.

Vicious cycle

Governor of the Maldives Monetary Authority (MMA) Dr Fazeel Najeeb  (August 23) was quoted in local media as warning that “excessive” government expenditure was directly responsible for the country’s present economic issues.

Speaking during a function to celebrate three years since the formation of the Maldives Inland Revenue Authority (MIRA), Dr Najeeb claimed that increased government expenditure required large amount of loans that would put the country in a vicious lending cycle.

He also expressed concern at a perceived slow down in the country’s private sector and bank investments increasingly in government Treasury Bills (T-bills).

“The value of Rufiyaa is dropping because government accounts do not have the money, because it is a necessity to print large quantities of money,” he was quoting as saying by Sun Online.

Najeeb said that a long-term economic stability plan would be needed in the country as part of attempts to increase foreign investment, reduce inflation, and curb printing of the Maldivian Rufiyaa in order to calm an increase in prices.

“The plan shall include new foreign investments, aim to reduce inflation, decrease the printing of money and cease it altogether. This will decrease the pressure on the Rufiyaa”.

Minivan News was awaiting a response from Dr Najeeb at time of press.

Waheed Administration’s spending

In July 2012, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

However, the Finance Ministry in the same month announced its intention to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totaling MVR443.7 million (US$28.8 million), were to be paid back in monthly instalments starting immediately.

Meanwhile, the original budget proposed by the state for 2013 had also included salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, some MPs at the time estimated that the state wage bill would shoot up by 37 percent.

Parliament eventually passed a MVR15.3 billion (US$992 million) state budget on December 27 last year, after it was reduced by more than MVR1 billion (US$64.8 million) from the MVR16.9 billion (US$1 billion) proposal previously submitted by the Finance Minister.

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Budget shortfall leads Maldives to seek $US29.4 million Bank of Ceylon loan

President Mohamed Waheed has requested parliament approval to obtain a US$29.4 million loan from the Bank of Ceylon to finance the government’s budget and manage cash flow.

The Ministry of Finance and Treasury is seeking to secure the loan as a way to “enforce” the 2013 budget approved by parliament, stated a letter from the President’s Office read during a parliament session held on Tuesday (August 13).

The Finance Ministry informed the President’s Office that the Bank of Ceylon would provide the Maldives’ government a loan of US$29.4 million, at a six percent interest rate, to be repaid within six years in monthly payments of US$490,000, according to local media.

The Government of Maldives believes the short term loan offers “good terms” and will provide the support necessary to finance the state budget and cash flow. The President’s Office letter also noted that the graduation of the Maldives from least developed country status has made it “extremely difficult” to obtain loans with low interest rates.

Previously, upon parliament’s approval of the 2013 budget, it was agreed that the state could not take out loans with interest rates that exceed seven percent.

The President’s Office Bank of Ceylon loan request has been forwarded to parliament’s finance committee.

Foreign loans for “fiscal problems”

In 2012, President Waheed reportedly said he would not resort to borrowing from foreign governments in order to finance government activities.

“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn,” he was reported to have told the people of Nilandhoo Island.

However, the government has sought a number of foreign loans to supplement the state budget.

Last month, the government confirmed it was in discussions with Saudi Arabia, seeking a long-term, low interest credit facility of US$300 million to help overcome “fiscal problems”.

President’s Office Spokesperson Masood Imad confirmed President Waheed had held discussions with senior Saudi Arabian dignitaries including Crown Prince Salman bin Abdulaziz Al Saud over the proposed credit facility, during his recent visit to the country.

“The president has initiated the talks so it is just a matter of working out the details now,” Masood said, explaining that the funds would be used for “budget support” and development projects.

In September 2012, President Waheed told Reuters that China will grant the Maldives US$500 million (MVR7.7billion) in loans during his state visit to the country.

The loans, equal to nearly one quarter of the Maldives’ GDP, would include $150 million (MVR2.3billion) for housing and infrastructure, with another $350million (MVR5.4billion) from the Export-Import Bank of China, reported Reuters.

China’s aid was hoped to provide an immediate salve to the government’s financial ailments, which at the time included a MVR 9.1 billion ($590million) budget deficit.

Additionally, the government was seeking a US$25 million state loan from India required to support the state budget for the remainder of 2012. The loan was delayed after the Maldives’ government failed to submit the requested paperwork, a diplomatic source from the Indian High Commission in the Maldives previously revealed.

The US$25 million loan was agreed as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

It is not clear whether the foreign loans from India and China have been received, or whether parliament has approved the state obtaining loans from Saudi Arabia or Sri Lanka’s Bank of Ceylon.

Finance Minister Abdulla Jihad as well as Deputy Speaker, Parliamentary Financial Committee Head, and People’s Alliance (PA) MP Ahmed Nazim were not responding to calls at time of press.

Failure to fill budgetary gaps

Finance Minister Abdulla Jihad claimed back in late December 2012 that the MVR 15.3 billion (US$992 million) state budget approved by parliament might not last until the end of 2013 – requiring supplementary finance for the state.

In April 2013, Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditures.

Jihad warned that government offices and independent institutions might be unable to pay salaries orelectricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).

Earlier in April, Jihad also announced that the government had decided to delay all new development projects that were to be financed out of the state budget due to shortfalls in revenue.

The decision to suspend new projects was revealed after Housing Minister Dr Mohamed Muiz told local media at the time that he had been instructed not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

“Reckless financial management”: MDP

In July, Maldivian Democratic Party (MDP) MP and Spokesperson Hamid Abdul Ghafoor said that the heavily partisan parliament now effectively controlled state finances as a result of former opposition politicians – now part of President Waheed’s government – imposing tighter spending restrictions on former President Mohamed Nasheed’s administration.

Ghafoor argued that with the MDP failing to recognise the legitimacy of the present government due to the controversial transfer of power last February, he did not believe there would be support for approving the credit agreement with Saudi Arabia due to the government’s existing extravagant borrowing levels.

The party accused the current government of reckless financial management, pointing to a potential US$1.4 billion compensation bill facing the state for deciding last year to abruptly terminate a US$511 million airport development contract agreed with infrastructure group GMR.

The compensation claim amounts to four times that of the Maldives’ current state reserves should it be awarded by a Singapore court overhearing arbitration hearings between GMR and the government.

“Since we do not see this government as legitimate, we do not see why we should support them,” he said. “They have put us into debt with their handling of the airport development and another bill for a border control system.”

Earlier in July, Malaysian security firm Nexbis invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control system technology in the country, in line with a concession agreement signed in 2010.

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Yameen pledges to halve president’s salary, slash wages for political appointees

Progressive Party of the Maldives (PPM) presidential candidate Abdulla Yameen has pledged to halve the presidential salary and slash the wages of political appointees by 30-50 percent, should he be elected in September.

Yameen also pledged to cut the salaries of independent institutions – which include the Human Rights Commission of the Maldives (HRCM) and the Political Integrity Commission (PIC) – a step he described as pivotal for the country to avoid a sovereign default.

The MP also vowed to work towards reducing the salary and allowances of parliament members. At the same time, he pledged to increase the wages of civil servants.

The PPM presidential candidate also emphasised the need for youth employment, promising 90,000 new jobs for young people across the Maldives by the end of his five year term.

The numbers

The Maldives has one of the highest percentages of government employees to population of any country in the world, at around 11 percent.

Salaries and allowances have also rocketed up, unmatched by government revenue. Much of this growth occurred in the two years leading up to the 2008 election and the introduction of multi-party democracy.

An internal World Bank report leaked in 2010 showed that Increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

With the introduction of the new Constitution and its requirement for an assortment of independent institutions to oversee various aspects of government, the share of the wage bill to revenue soared to “an astronomical 89 percent.”

The President of the Maldives receives a base salary of MVR100,000 (US$6500) per month. During his government’s attempts to reduce civil servant spending on the urging of the International Monetary Fund (IMF), former President Mohamed Nasheed took a voluntary pay cut of 20 percent.

Despite this, the government’s attempt to impose austerity measures was blocked by the Civil Services Commission, leading to a series of scuffles between the Finance Ministry and the CSC.

The opposition at the time, now in power following Nasheed’s controversial resignation in 2012, contested Nasheed’s expenditure on 244 political appointees – a figure partly the result of the government’s early efforts to consolidate state employees under government-owned companies outside the purview of the CSC.

Figures released by the Ministry of Finance and Treasury showed that these 244 appointees were being paid MVR 99 million (US$6.4 million) a year, however Nasheed’s administration contested that this constituted just two percent of the state’s 2011 wage bill, comparing it to the 39 percent that went to the civil service, 24 percent to uniformed bodies, 17 percent to local councils, 10 percent to independent institutions, 5 percent to the judiciary, and 2 percent to parliament.

In comparison, President Waheed’s government during 2012 spent MVR 60 million (US$3.9 million) on 136 appointees, according to figures procured by Sun Online.

At the time, the monthly spend included 19 Minister-level posts at MVR 57,500 (US$3730), 42 State Ministers (MVR 40,000-45,000, US$2600-2900), 58 Deputy Ministers (MVR 35,000, US$2250), five Deputy Under-Secretaries (MVR 30,000, US$1950) and 10 advisors to ministers (MVR 25,000, US$1620).

Overall public expenditure in 2012 increased 12 percent on the previous year.  This was in large part due to measures such as the intensified recruitment and promotion of a third of the police force, and repayment of civil servant salaries cut during the Nasheed era.

The Maldives Monetary Authority (MMA) noted that while total expenditure for the year was three percent lower than 2011, this was only due to the government’s failure to pay a large number of bills. Total public debt at the end of 2012 was 72 percent on GDP, the MMA stated.

Meanwhile, the government’s wage bill was in May projected to increase by 37 percent in 2013 as a result of hiring more employees, notably 864 new staff for the police and military – an increase of almost 20 percent.

In its professional opinion on the budget submitted to parliament, the Auditor General’s Office also observed that compared to 2012, the number of state employees was set to rise from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.

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MP proposes amending constitution to limit parliament to 77 MPs

MP Ahmed Amir has proposed an amendment to the Maldives Constitution that would prevent any further increase in the number of the country’s MPs, as authorities prepare to create additional constituencies to be contested during 2014’s parliamentary elections.

Haveeru has reported that the proposal was submitted by MP Amir, a senior figure within the Maldives Development Alliance (MDA), after the EC announced in June that eight additional MPs would be elected next year on top of the existing 77 members.

This increase, mandated by the constitution based on population statistics received by the EC, would take the total number of lawmakers to 85 once polling scheduled for next year is compete.

Based on the basic salary and allowances MVR62,500 (US$4000) paid to the country’s MPs, local media predicted that eight additional parliamentary representatives would cost the Maldives MVR500,000 (US32,400) per month.

Representatives for the opposition Maldivian Democratic Party (MDP) today dismissed MP Amir’s proposals as being of limited concern to politicians and the wider public with a presidential election just under a month away.

Meanwhile, Dr Ahmed Didi, Deputy Leader of the Jumhoree Party (JP) said he personally believed the increase in MPs next year should go ahead as mandated within the country’s constitution.

However, he said that no formal decision had been taken by the JP on the issue, with the party’s council eventual deciding whether to support a proposed increase in MP numbers.

Government Aligned Progressive Party of Maldives (PPM) MP Ahmed Mahloof and Dhivehi Rayyithunge Party (DRP) Parliamentary Group Leader Dr Abdulla Mausoom were not responding to calls at time of press.

“Public disillusionment”

The decision create eight additional salaried parliamentarians was taken as civil society and senior political figures have raised concerns over the last year about accountability within parliament and a sense of “public disillusionment” with the country’s democratic system.

Findings compiled by NGO Transparency Maldives published shortly before last year’s controversial transfer of power found that a vast majority of a survey group of 1001 believed parliament to be the country’s “most corrupt” institution.

MDP spokesperson and MP Hamid Adbul Ghafoor told Minivan News today that proposal to limit the number of Maldivian MPs to 77 was not seen as a pressing concern for the party at present, with the general view taken that the party should try to make the constitution adopted in 2008 “work”.

“I would say this [issue] hasn’t sparked interest at a party level. As far as we are concerned the constitution says that boundaries should be withdrawn,” he said. “With the election coming we are not interested at the moment.”

When questioned over how a public reportedly disillusioned with parliament’s conduct might view an increase in the number of salaried MPs, Ghafoor dismissed suggestions there were any widespread concerns about the work of parliamentarians.

He expressed belief that parliament was “very popular” among the public compared to how the Maldives’ legislature had been viewed before the country’s first multi-party democratic election in 2008, where it operated as a body to rubber stamp the edicts of former President Maumoon Abdul Gayoom.

Ghafoor was also critical of Transparency Maldives, accusing them of failing to hold parliament to account and showing transparency themselves.

“Transparency Maldives is a big joke.  You may quote me on that,” he said, accusing the NGO, which oversees projects such as Majlis (Parliament) Watch, of failing to engage with the country’s parliamentarians.

Transparency Maldives Project Director Aiman Rasheed was not responding to calls at time of press.

Ghafoor claimed that the MDP represented a ‘new order’ for democratic politics, alleging all other parties in the country that came to power in February’s controversial transfer of power representing an ‘old order’ favouring autocratic rule.

“The old order doesn’t like that it lost control [of parliament]. The only way it can gain control now is through a popular vote,” he said.

Ghafoor claimed additionally that the MDP had itself in the past tried to resist efforts by the People’s Majlis to approve increased salaries and bonuses for MPs, arguing the party had “never initiated” increasing such incentives for elected officials in the Maldives.

He added that certain MPs including himself had rejected receiving a MVR 20,000 (US$1,298) per month allowance to cover a parliamentarians phone, travel, and living expenses.

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State reserves rise to US344.4 million: MMA

State reserves increased to US$344.4 million in July, according to the Maldives Monetary Authority (MMA), a figure worth approximately 2.7 months of imports.

The data was published in the MMA’s monthly economic review for July.

Total government revenue for the first six months of the year, excluding grants, was MVR 5.4 billion (US$350 million) while total expenditure (excluding net lending) was MVR 6.8 billion (US$440 million).

While the 2013 budget projected a decline in the budget deficit to 4 percent of GDP from 13 percent in 2012, the MMA noted that according to balance of payments estimates for 2013, the current account deficit was estimated to increase to US$690.7 million, equivalent to 28 per cent of GDP.

“Of this deficit, 62 per cent is to be financed through foreign financing while 38 per cent is to be financed through the sale of T-bills and other means,” the MMA noted.

Outstanding T-bills had meanwhile increased from MVR 5.5 billion (US$356.6 million) in November 2012, to MVR 9 billion (US$583.6 million) as of May 2013.

Total tourist arrivals meanwhile increased 18 percent on the first half of 2012, largely driven by Chinese arrivals, while the average duration of stay declined 12 percent.

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Police to hire 75 civil assistants as non-uniformed personnel

The Maldives Police Service (MPS) has made an announcement in the government gazette on Sunday (June 23) seeking to hire 75 “civil assistants” as non-uniformed personnel for administrative work.

A police media official explained to Minivan News today that the MPS planned to assign all administrative work to civil staff and free up “uniformed police officers for operations.”

While there were civil staff working for police at present, the media official added, uniformed personnel with police training were also carrying out administrative tasks, such as “answering the phone at police stations and writing reports.”

Shifting all administrative work to civil staff would allow uniformed personnel to attend to police work and election security matters ahead of the presidential election in September, the media official said.

According to the criteria listed in the job announcement, interested candidates must have at least two O’ Level C passes, must have passed Dhivehi and Islam, and must not have been convicted of a crime with a punishment prescribed in the Quran or theft, fraud, embezzlement, drug abuse or drug trafficking in the past five years.

In addition, applicants must not have sought treatment or rehabilitation for drug abuse during the past five years and must not be a registered member of a political party.

The deadline for submitting application forms, available on the police website and at the police headquarters, is 4:00pm on July 4.

The civil assistants will be paid monthly wages of MVR 3,470 (US$225) in addition to MVR 1,000 (US$65) a month as a service allowance and 35 percent of the salary as a non-practice allowance.

The new police staff will cost the state MVR 426,300 (US$27,645) a month and MVR 5.1 million (US$330,739) a year.

The announcement seeking 75 civil assistants followed the recruitment of new officers for a “special constabulary” reserve force in May this year.

Reserve force officers were to be paid 85 percent of the salary of a regular police officer of the same rank.

Budget crisis

Following the controversial transfer of presidential power on February 7, 2012 in the wake of a violent mutiny instigated by officers of the Special Operations (SO) command, more than 1000 police officers were promoted, 110 new police officers were hired, a housing scheme was introduced for police officers with 300 flats to be constructed in Hulhumale’, arrangements were made for cheap accommodation in Sri Lanka for police officers and their families and a loan scheme was set up for police officers.

The additional recurrent expenditure on wages for new police staff comes at a time when the country is facing a budget crisis, with island schools and hospitals understaffed, local councils unable to settle outstanding utility bills, and development projects stalled over lack of funds.

In April, Finance Minister Abdulla Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

Jihad warned that government offices and independent institutions might be unable to pay salaries or electricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).

Earlier in April, the cabinet decided to delay implementation of new development projects financed out of the state budget due to shortfalls in revenue.

Moreover, in a report on the Maldivian justice system released in May, UN Special Rapporteur for the Independence of Judges and Lawyers, Gabriela Knaul, expressed concern of an impending budget crisis for the judiciary.

“The immediate implications of the budget cuts on the judiciary are appalling. For instance, the Department of Judicial Administration only has funds to pay staff salaries until November 2013 and it had to cancel training this year,” Knaul noted.

“The Civil Court reported that it would not have sufficient funds to pay its staff salaries after October 2013; furthermore, existing budgetary resources would not be sufficient to pay for utilities and facilities after June 2013,” she added.

During the parliamentary debate last year on the state budget proposed for 2013, opposition Maldivian Democratic Party (MDP) MPs criticised budgeted salary increases for military and police officers as well as plans to hire 800 new personnel for the security services.

The state’s annual wage bill was projected to skyrocket by 37 percent in 2013 as a result of hiring more employees.

MDP MP Eva Abdulla claimed during the budget debate that the police and army hired 250 and 350 new staff respectively in 2012.

Consequently, the institutions spent more than MVR 75 million (US$4.8 million) in addition to the approved budgets for 2012, she claimed.

Meanwhile, in its professional opinion on the budget submitted to parliament, the Auditor General’s Office observed that compared to 2012, the number of state employees was set to rise from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.

This anticipated increase included 864 new staff to be hired by the security services, the Auditor General’s Office noted.

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