Tag: budget

Controversial salary amendments not yet approved, say MPs

MPs “have not taken pay increases”, Deputy Speaker of Parliament Ahmed Nazim has said, despite the Rf20,000 wage hikes for MPs included in the 2011 state budget approved yesterday.

Deputy Speaker Nazim said the proposed wage hikes must receive additional approval by the Majlis before they can take effect.

Despite “cross party support” for budgetary amendments allowing additional MP privileges like salary increases, he said, no wage hikes have actually been approved. Nazim anticipates that the proposals, considered a possible means of improving parliament’s “productivity”, would come under review in March after the recess.

The claims were made at the first session of the Mjalis since it passed the 2011 state budget. It opened to chants of “We need cash” from protesters gathered near the parliament building, angry over the salary amendments passed as part of a budget said to be aimed at cost-cutting.

However, acting Finance Minister Mahmood Razee said he believed the budget had been passed relatively well. He added that any amendments such as those suggested for MPs’ salaries – passed yesterday by a majority of members – would still ultimately require presidential approval.

In addition, the acting Finance Minister said, all amendments would ideally fulfil the commitment to keep the budget at about Rf12.37bn for the year ahead.

These commitments are also focused on trying to ensure a budget deficit of around 16 per cent, which has been sought in an attempt to appease institutions such as the International Monetary Fund (IMF), which suspended finance to the country earlier this year over concerns about it living beyond its means.

However, Nazim, who also serves as Deputy Leader of the opposition People’s Alliance (PA) party, rebuked the optimism shown by the acting finance Minister. He added that concerns remained among some “opposition and independent MPs” over a lack of detail in the budget, such as in the funding of enterprises like the Maldives National Broadcasting Corporation (MNBC).

Addressing the topic of MPs salaries outlined under amendments to parliamentary privileges, Nazim claimed  the salaries were not solely a “money issue”, but were also part of an attempt to test methods for improved “productivity” among the Majlis.

“The amendments were not to do with spending cuts, the salary structures have been amended as part of measures to increase productivity among members, which will be reviewed by parliament’s Public Accounts Committee,” he said. “The figure of Rf20,000 is an upper ceiling level that parliament will look to see whether it can be increased, it doesn’t mean anything has been passed.”

“We are not taking a pay rise,” Nazim added.

In looking at the wider budget, Nazim stressed that there remained concerns among some MPs over a number of proposed amendments to the budget, such as those concerning MNBC, that had been dismissed by Parliamentary speaker Abdullah Shahid as “not in the budget”.

Citing the 2010 budget that he claimed had not outlined funding for the MNBC, Nazim said  the government still provided a total of Rf54m for monthly salaries to the broadcaster, which had not been accounted for once again in the latest state finances.

The Deputy Speaker also noted that the state-owned Maldives National Shipping Limited, which  had required Rf84 million from the government’s contingency budget in 2009 had also required another Rf48 million so far this year.

In light of the recent privatisation agreement with Indian infrastructure group GMR to manage Male’ International Airport, Nazim asked why the government had “not sold off” the shipping enterprise to aid finances.

“The government refused to give this contingency budget out before it was brought to the Majlis,” he said. “They have not cooperated with parliament. Though there have been improvements since the acting [Finance] Minister came in, we still believe there has been systematic abuse of the system.”

From a government perspective, Acting Finance Minister Razee claimed that he believed budget discussions had “actually gone quite well”.

He said the approved budget was within the Rf12.37bn first projected earlier this month, but amendments would require it to “take some funds from existing programmes” so they could be invested elsewhere.

Razee said he remained hopeful that the funding would not significantly impact the proposed target for an annual budget deficit of 16 per cent.

However, he conceded that possible amendments to programmes within the budget could yet “be more significant” in terms of their financial impact than anticipated.

When asked if passing proposed amendments to parliamentary privileges such as increased wages for MPs was a failure for a budget aimed at cost reduction, Razee said that the proposals were not part of the government’s original plan.

“These [privileges] were amendments to existing bills,” he said. “Obviously, these amendments that have been provided would have to be approved by the president, who would decide if there was enough revenue to support such an increase.”

Razee added that he did not have the figures on the exact numbers of MPs and party members who had voted to approve the amendments that included the privileges, though he confirmed they “had been passed by the majority”.

“I can’t say why people voted for it, the amendments had included allowances to independent institutions so perhaps they were confused,” he claimed.

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Police strategy launch focused on challenges of expansion and “emerging” crimes

Despite uncertainty over funding allocated by the 2011 budget, the Maldives Police Service has today unveiled commitments to try and expand its services among a wider number of islands in the Maldives, whilst also prioritising the prevention of “emerging” threats like cyber crime and human trafficking.

The commitments were announced as part of a new strategic plan outlining key focus areas for police between 2011 and 2013. These focuses include aims to extend measures on the prevention of cyber crime, human trafficking, “extremist ideologies” and piracy, along with more day to day crimes such as theft, violence and drug abuse.

Yoonus Sobah, head of the Bureau of Criminal Records and a member of the Police Service’s strategic development department, told Minivan News that any new commitments outlined for policing the nation were tied, and perhaps limited, to the 2011 state budget that had just been passed yesterday.

Saboh said that the force had not therefore outlined any additional projects in the “short run”, such as new island-based police stations or other service extensions.

“Our goal is to have our services increased across the islands, though this has to be linked to the budget,” he said. “Initially, this means there will be no new police stations constructed, though there are five additional structures in development across a number of islands that were already planned.”

According to Sobah, as part of strategy to try and improve delivery of policing across the country, the service is moving ahead with “decentralisation plans” to try and create a strong presence across the country’s capital islands. Such a focus is expected to allow for cases that were previously transferred to Male’ to be examined on a more local regional basis instead, according to the Police Service spokesperson.

On a wider national scale, Sobah said that the new police strategy would aim to increasingly deal with “emerging” larger-scale crimes such as financial misconduct, people smuggling and even maritime protection in conjunction with groups like the Maldivian National Defence Force (MNDF).
“Alongside our commitments to street crime, we will try and prioritise on bigger cases that we are not as experienced in solving, such as cyber crime,” he said.

Sobah added that so called larger or “emerging” crimes also involved potential external threats such as terrorism, piracy and financial crime.

Speaking today during the unveiling of the new three year police strategy at the Iskandhar Koshi bulding, Commissioner Ahmed Faseeh highlighted the importance of serving the people with loyalty and integrity and how the new strategic plan could help met these aims.

“The purpose of the police is to enforce the law and maintain a peaceful environment in the society,” said Faseeh. “This strategic plan was established after conducting research with the practical assistance of the Scottish police.”

In addressing the challenge of “emerging” criminal activity in the Maldives such as cyber crimes, the commissioner said he believed progress was already being made.

”The police have achieved satisfying progress in the last three years when we worked under the recent strategic plan,” he added.

Home minister Afeef claimed that although the last police strategic plan was not fully successful in meeting its aims, police achieved satisfying results nonetheless.

”Other institutions related to the work of the police should also cooperate more to achieve their best,” said Afeef. ”Police are ready to take the risk, although they have to deal with the most violent criminals in the country.”

He also appealed for witnesses at crime scenes to be more cooperative with the police when providing information.

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Anti-Majlis protests hit the capital’s streets

Hundreds of protesters have today gathered near parliament to call on the abolition of the Majlis, citing anger over the passing of a bill to extend MP privileges within the state budget.

Activists, which sources have claimed support a number of political parties, joined civil servants, NGOs and other workers near the parliament building to protest against the actions of the Majlis, leading police to restrict access to some streets around the area.

The outrage was said to have been sparked yesterday when parliament passed allowances for parliamentarians that the protesters believe is ‘’way too much’’.

According to the new bill, parliamentarians will receive an additional Rf20,000 to their salary for attending committees, while also being allowed to import vehicles without paying any duty on them. The parliament also approved measures to reinstate the salaries of independent commissions, while failing to address the reduced salaries of civil servants.

This decision has led protesters to claim that MPs were working for their self-interest in the name of working for the nation and citizens in their work.

By this afternoon, a group of protesters brought a box written “Majlis Fund” that was passed beyond the police barrier, before they joined others in heavily criticizing the country’s MPs.

As a result, local media reported that tempers also flared within parliament, as rival MPs clashed with each other forcing speaker Abdulla Shahid to cancel today’s sitting. Haveeru said that some MPs had argued to withdraw the bill for amendment, with Dhivehi Rayyithunge Party (DRP) MP Ahmed Maloof one of the names said to support a repeal of the privileges bill on claims that it was against the “pulse of the people”.

Today’s street protests follow on from similar action undertaken last night by the ‘Tortured Victims Association’, which was disrupted after some people present clashed with the Maldivian Democratic Party (MDP) parliamentarian group leader Moosa ‘Reeco’ Manik, verbally assaulting him over the issue of budget.

The protest, which involved around 20 to 30 people over practices of torture allegedly committed under the rule of former President Maumoon Abdul Gayoom, ended up as a protest against all the parliamentarians. A few protesters then marched towards the house of Speaker of the Parliament Abdulla Shahid later in the evening.

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Razee confident budget aims can be met as voting day looms

With voting to finalise the 2011 state budget expected to take place later today, acting Finance Minister Mahmood Razee said he remains confident that the government remains on target to meet its financial objectives, though stressed it was too early to say without “seeing amendments” suggested by parliament.

Despite criticisms by some opposition MPs regarding what they see as a lack of detail in the budget over the exact nature of government spending – particularly in areas of decentralisation and broadcaster funding – Razee said this morning that he believed any potential member-submitted amendments would not set back proposed aims of trying to reduce spending.

“We would only be concerned [by the amendments] if the total budget goes over the 12.37bn (US$962.6 million) originally set,” he said.

Razee added that it would also be vital to try and ensure the predicted 2011 budget deficit remained at about 16 per cent, after coming under pressure from financial institutions like the International Monetary Fund (IMF) to cut the current figure of around 26.5 per cent.

“We would need to maintain the deficit at that level [16 per cent].  Most of the discussions we have had about the deficit have been in line with this,” he said. “However, I don’t know what will happen until voting.”

The passing of the annual budget is constitutionally required to be completed before the end of the previous calendar year, with the government having claimed to be focused on spending cuts as part of plans to try and reduce the country’s budget deficit.

There has been concern over whether the budget will be passed on time, with debate taking place within parliament over the last few days as members have attempted to add amendments to the annual expenditure before passing it through the Majlis.

Budget criticism has come from both opposition MPs like Ahmed Nazim and independent members like Mohamed ‘Kutti’ Nasheed over claims that there is insufficient detail about the exact nature of certain government spending projects.

Nazim has claimed that although opposition members were just as committed to ensuring the country’s budget was completed within the deadline, there remained concerns over issues such as the government supplying about Rf54 million to the Maldives National Broadcasting Corperation (MNBC) without seemingly including it in the budget.

“There are so many problems with the budget, which is lacking details regarding a number of projects and figures,” he said.

Nasheed, an independent MP, also said last week that he had identified some preliminary concerns over spending allocation in the budget, particularly in areas such as decentralisation, despite claiming he was optimistic that the finance document would be passed before the New Year deadline.

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Afternoon deadline set for MPs’ budgetary amendment proposals

MPs had been given until 4pm this afternoon to recommend amendments for the 2011 State budget after the completion of a parliamentary joint committee evaluation on Thursday, Ahmed Nazim, the Deputy Speaker of Parliament has said.

Nazim has said that following a multi-party evaluation that took place last week by both members of the country’s finance and economic committees, the 2011 budget is expected to be tabled tomorrow in front of parliament, with discussions expected to take a few days.

The passing of the annual budget is constitutionally required to be completed before the end of the previous calendar year, with the government said to be keen on spending cuts as part of plans to try and reduce the country’s budget deficit to about 16 per cent.

There had been concern over when the evaluation process was set to be completed; however, it is thought that there will be a few days worth of debate as within parliament as members attempt to ensure amendments within the final expenditure document before passing it through the Majlis.

The government is under considerable pressure from the International Monetary Fund (IMF) to reduce the budget deficit, which President Mohamed Nasheed last month said was around 26.5 per cent.

Acting finance minister Mahmood Razee today said that he believed there had been “no major changes” to the main objectives of the budget during the evaluation, particularly in regards to the predicted deficit.

“We believe that the 16 per cent figure will be maintained,” said Razee in relation to the government’s stated aim of trying to cut the deficit.However, with a deadline on member-supported amendments set for this afternoon in parliament, Razee added that there could be a number of recommended changes yet imposed on the final budget.

“Any potential changes will now depend on amendments being supplied by MPs,” he said. “We expect the final vote to take place about December 29.”

However, there has been some criticisms of the budget – both among opposition MPs like Ahmed Nazim and independent members like Mohamed ‘Kutti’ Nasheed – over claims that there is insufficient detail about the exact nature of certain government spending projects.

Nasheed, an independent MP who was not involved with the evaluation committee, said last week that he had identified some preliminary concerns over spending allocation, particularly in areas such as decentralization, despite stating optimism the budget would be passed before the New Year deadline.

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Opinion divided over budget evaluation deadline

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.

IMF concerns

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.

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Speaker seeks legal advice after Acting Finance Minister presents 2011 budget

Speaker of Parliament Abdulla Shahid has told local media that he is seeking legal advice after Acting Finance Minister Mahmoud Razee presented the 2011 State Budget to parliament.

Finance Minister Ali Hashim resigned on Friday following the Supreme Court’s ruling that ministers rejected by parliament could no longer hold their positions. President Mohamed Nasheed appointed Economic Development Minister Mahmoud Razee as acting minister in Hashim’s stead.

Haveeru reported Shahid as saying the budget would not be debated on Monday as he was seeking legal advice on the matter. Shahid was not responding to calls at time of press.

“We need to find ways to carry out this task without disrupting the state,” Haveeru reported Shahid as saying, despite observing that Deputy Speaker of Parliament Ahmed Nazim had told the paper that Razee would be able to present the budget as he had been endorsed by parliament.

Independent MP Mohamed ‘Kutti’ Nasheed told Minivan News that he believed there had been a move towards tabling the budget during tomorrow’s session of parliament.

The text of the Constitution requires the “Minister of Finance” to submit the budget for approval “prior to the commencement of each financial year” – in the Maldives, the calendar year.

Nasheed said that this was a specific responsibility of the Finance Minister, and that the Constitution did not appear to allow for an acting or state minister to present the budget, however he noted that “there is cross-party support to get the budget moving. It is likely they would approve whomever the President nominates as Finance Minister.”

The Speaker had consulted him on the issue, Nasheed said, adding that he had suggested that irrespective of whether there was a finance minister, the budget had already been released into the public domain and there was nothing preventing parliament from starting an informal deliberation.

It was, he said, entirely normal for committee hearings to conduct informal discussions prior to obtaining quorum, such as when a member was late or absent, and then conduct the formal debate and speech once quorum was achieved.

“In view of the Supreme Court’s decision [on Thursday], an appointed minister is a de facto employee until approval by parliament, whereupon he ripens into a fully-fledged cabinet minister. The easiest way may be for the President to just appoint a Finance Minister.”

Nasheed added that he did not think the issue was critical, as if the budget was delayed parliament had the potential to pass an emergency budget to ensure the functioning of basic services in the interim, as it did when the new government took office.

Theoretically, Nasheed noted, there was nothing preventing the President from simply reappointing dismissed ministers in perpetuity, although he suggested that this would be “unproductive” and run against the “spirit of the constitution”.

The President today reappointed Dr Ahmed Ali Sawad as Attorney General (AG), following Sawad’s resignation on Friday.

The Supreme Court ruled on Thursday that cabinet members rejected by parliament could not remain in their posts. Sawad was among the members of cabinet not endorsed by the opposition majority parliament.

“There’s nothing in the rules, but this has to come to an end some time,” MP Nasheed said. “If disaappoved again, the Attorney General could be appointed a third time – the Constitution doesn’t go into such detail.”

Similarly, Nasheed added, the potential for repeated rejection of appointed ministers by a vindictive opposition “goes with the Presidential system of government that we have. It’s unlikely that a president [in the Maldives] will command a majority, and it’s the same situation faced by US President Barack Obama [with a Democrat executive and Republican Congress].”

During the original appointment of ministers, “the President did it very beautifully,” MP Nasheed said. “He proposed the names and sent them to parliament, and then they were appointed, which was the responsible way to proceed.”

The loss of seven ministers, Nasheed suggested, was an “extreme situation” and unlikely to reoccur.

“The results might have differed if the MDP had taken part in the vote,” Nasheed said. “They may have been able to salvage more [without the boycott]. To let go of seven cabinet ministers must have been a huge decision.”

Meanwhile, President Nasheed has ratified the First Amendment Bill to the Public Finance Act, following a ruling from the Supreme Court for early ratification of the bill.

In a statement on the President’s Office website, the President said the bill was ratified in compliance with the Supreme Court’s ruling “despite legal issues [that] would negatively affect government’s social protection system.”

The newly reappointed Attorney General has filed a case in the Supreme Court seeking a ruling of of several articles in the Act as contradicting the Constitution.

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Majlis impasse may obstruct passing of 2011 Budget

The 2011 State Budget to be deliberated by parliament next week will target more funds for island development, provide soft loans for small business and encourage private sector job growth, President Mohamed Nasheed said yesterday in his weekly radio address.

A shift from line-item to programme budgeting makes next year’s budget “very different from previous years” as it will direct more resources to islands for managing development programmes.

The budget for individual islands “will be much higher than it was in the past”, Nasheed explained, as the government anticipated “the work of ministries will be reduced and especially, when atoll councils and island councils start functioning, the government believes it will have, that it should have, responsibilities to carry out.”

While the budget includes a programme to offer government guarantees on soft loans to small and medium-sized enterprises, he added, economic policies will aim to spur job growth by strengthening the private sector.

“For example, the transport network – 300 new jobs have been created within that system,” he said, reiterating the government’s policy of pursuing public-private partnerships.

Moreover, the Human Resources Ministry is currently compiling a national employment registry to track monthly rates of job losses and employment gains, he revealed.

Gridlock

As the final sittings of the year are set to resume on Monday, parliament remains at loggerheads with the executive over the endorsement of cabinet members, with forced cancellations paralysing the legislature for the past three weeks.

While the opposition majority insist that ministers must be approved individually, MPs of the ruling Maldivian Democratic Party (MDP) favour a ‘block vote’ for all ministers and moreover argue that the issue must be removed from the agenda until parliamentary rules of procedure is amended in light of the landmark Supreme Court ruling last month.

The Supreme Court ruled that while article 171(i) of the parliament’s rules of procedure, which allows nominees to be questioned by committee, does not contradict with constitution, it cannot be used in endorsing cabinet ministers.

Addressing supporters during a campaign rally last week, opposition Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali said that although the party engaged in official talks with the government and international mediators “in the end after three months when there is still no way to hold ministers accountable, and when these ministers do as they please, the result ultimately is adverse effect on the lives of the Maldivian people.”

Writing in his website in September, the parliament majority leader argued that parliament was “unable to effectively provide the checks and balances necessary for the system to work democratically” and exercise oversight powers with the cabinet awaiting parliamentary consent.

Thasmeen further claimed that “failure of government officials to appear before the parliament is part of a series of deliberate acts by the government to pave way for autocratic rule,” adding that the opposition “should seriously consider taking legal action against government officials who ignore requests to appear before the parliament.”

The cabinet was reappointed by President Nasheed in July after resigning en masse in protest of the “scorched-earth policies” of the opposition, which it accused of obstruction and attempting to wrest executive control from the government.

DRP MP Ahmed Nihan told Minivan News today that “no MP would obstruct the passing of the budget, but they should advocate on behalf of their constituencies.”

Nihan said that the party would seek to “make adjustments and change some components” as with the 2010 budget, claiming that opposition MPs’ constituencies were neglected by the government.

He further criticised the government for revenue shortfalls due to “failed projects such as privatising IGMH (Indira Gandi Memorial Hospital) and not collecting the full amount for the sale of Dhiraagu shares”.

While he expressed confidence that MPs would “fulfill their constitutional responsibility to pass the budget and ensure that services are provided to the people”, Nihan backed the DRP Leader’s stance on resolving the cabinet issue as the first priority.

“According to the constitution, the Finance Minister has to submit the budget,” he explained. “But we don’t believe there is a Finance Minister right now. What [Thasmeen] is saying is how can we go forward without resolving this. So let’s finish this first.”

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Budget 2011 will drop fiscal deficit to 10-15 percent, President tells media

President Mohamed Nasheed has said the country’s crippling budget deficit of 26.5 percent will drop to 15 percent in the upcoming 2011 state budget, and potentially 10 percent by the end of the year.

The government’s aim had been 18 percent, Haveeru reported the President as saying following the laying of the foundation stone for 1000 flats in Hulhumale’ last week.

Nasheed noted that when the present government came to power in 2008, “the deficit was 44 percent compared to net national productivity.”

The government is under considerable pressure from the International Monetary Fund (IMF) to reduce the deficit, and earlier this month delayed its third disbursement to the country because of the government’s inaction on the matter this year, 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.

While acknowledging the political pressures faced by the government during 2010, particularly regarding its ability to cut a crippling public sector wage bill which increased 400 percent between 2004 and 2009, the IMF has stated throughout 2011 that the country is “living beyond its means.”

In June 2010, the IMF published its Country Report for the Maldives, and calculated that if the government continued to pursue economic reform at its current pace and policy, the country’s fiscal deficit would increase by one percent of GDP in 2010 and 4.5 percent of GDP in 2011.

Attempts to increase revenue by passing a Business Profit Tax bill has been obstructed in parliament by vested business interests, while the Civil Service Commission has taken the Finance Ministry to court over its refusal to restore a 15 percent salary cut.

The forthcoming 2011 budget, explained leader of the Maldives IMF delegation Rodrigo Cubero, was “a crucial opportunity for the government to implement the austerity measures much needed. At the moment, the current policy stance is not sustainable.”

The government has not yet revealed how the 2011 budget intends to reduce the deficit by such a margin as stated by the President.

Last year, parliament’s Finance Committee, headed by the opposition-aligned People’s Alliance MP Ahmed Nazim, amended the budget to include an additional Rf 800 million (US$62 million) in order to aid the restoration of civil servant salaries following a 15 percent pay cut, and subsidies for sectors ranging from fishing and agriculture to private media.

Finance Minister Ali Hashim had not responded to Minivan News at time of press.

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