MP allowances unjustified in current economy: GIP

If the state is unable to reimburse the amount reduced from civil servants’ salaries for MP allowances, then allowances must be reduced, said the Gaumee Iththihaad Party (GIP) in a statement today.

GIP called on the general public to work with the government in reducing state expenditure, while Vice President Dr Mohamed Waheed Hassan Manik specifically objected to the Rf20,000 committee allowance currently designated for MPs by the Parliamentary Finance Committee, Haveeru reports.

MPs who attend 75 percent or more of parliamentary meetings are eligible for this allowance.

On Thursday, a court case was allegedly filed for a court order asking the Finance Ministry to halt the budget for an MP allowance, which was approved on August 9.

In recent weeks, the Finance Committee also approved a lump sum of Rf140,000 as back-pay for MPs. The bonus would cost the state Rf10 million; the state deficit is currently Rf1.3 billion.

The decision to give the Rf20,000 committee allowance has been protested by politicians and civil society members. Concerned citizens also protested the recent bonus of Rf140,000 last month.


Police retain four suspects in custody as “Facebook blackmail” investigation continues

Police are monitoring four individuals suspected of involvement in the alleged blackmail of several political figures though graphic images obtained via social network site Facebook, as they press ahead with the case.

The Maldives Police Service today confirmed that out of the remaining seven suspects held for questioning over the investigation, three had now been released, while another three had been put under house arrest, leaving one individual in police custody.

The case first came to light in February, when police revealed that 14 individuals including a minor had been arrested on suspicion of obtaining hundreds of nude pictures and videos that were stored on computers and external hard drives.  It was alleged that these images had been obtained through fake Facebook profiles that used the identical image of a young woman.

Police said at the time that two profiles with the names of ‘Lyshiaa Limanom’ and ‘Angelic Sharrown’ respectively were used by the suspects to gather files of individuals pictured in some cases performing explicit acts in the presence of minors. Investigators stated that they would also be investigating people pictured in the files for committing crimes.

Speaking today to Minivan News, Police Sub-Inspector Ahmed Shiyam claimed that despite the release of three suspects, the investigation was “very much continuing” with additional suspects now wanted for questioning.

However, he added that due the “complicated” nature of the case, which relates to allegations of public indecency, police have said that they remain unable to reveal further details of advances that may have been made until the investigation was concluded.

Shiyam added that this could still potentially include actions being taken against any individuals depicted in the seized files if they are found to be in violation of state laws. Unconfirmed reports allege the possible involvement of civil servants and parliamentarians.

“We really can’t say anything yet [about the case],” he said. “However, once the investigation has been completed, we will be sending information to the Prosecutor General’s Office on who to charge with possible offences.”

No arrests have been made in the case as yet, though it was revealed last month that a senior civil servant working at Male’ Municipality has been suspended by the Civil Service Commission (CSC), reportedly in connection to an explicit video obtained by police during the investigation.

CSC Commissioner Fahmy Hassan confirmed to Minivan News at the time that the civil servant had been suspended pending an investigation into the offending video, which had been leaked to the internet and reported to the CSC.

The police investigation has not been without controversy though, with the editor of local newspaper Haveeru questioning the motivation of law enforcement officials in the country over the questioning of two of its journalists.  The questioning was said to concern the identity of sources used in a story said that reportedly identified persons within some of the images and videos.

Haveeru Editor Moosa Latheef told Minivan News that although police had acted politely and professionally in questioning two of its journalists, he believed there was the possibility that the actions taken against his staff could have been “politically motivated” to protect certain reputations.

Police officials responded at the time to the allegations by claiming that the journalists’ questioning was not a ‘political attack’ on media freedom, but a means to try and aid its investigations through interviewing the unnamed sources in the article.

Haveeru said that its journalists had not given the identities of the sources used in the article to police.


Mahloof cautious, but happy, over civil service salary reinstatement

Newly reinstated civil service salary rates that revoke wage cuts introduced back in 2009 should be affordable under the latest state budget, even amidst pressure to reduce the nation’s spending, Dhivehi Rayyithunge Party (DRP) MP Ahmed Mahloof has claimed.

Mahloof, who has been outspoken over some of the amendments passed into the 2011 state budget, said that he was “very happy” that the government had moved to revoke a 15 per cent reduction in civil servant salaries that were approved as part of the final budget within parliament.

The MP said he believed that the additional levels of expenditure could be well managed within the budget, especially if the government cut down on the number of political appointees it employed.

“We have been managing these wage levels for a long time, I don’t see there should be any difficulty in maintaining them,” Mahloof said. “However, the government could cut the number of appointees to reduce the budget further.”

Following the decision to reinstate the wages of civil servants and political appointees to similar level before respective cuts of 15 per cent and 20 per cent were made back in 2009, the government estimates that expected revenue for the year will ensure the salaries are sustainable.

The government has come under considerable pressure from the International Monetary Fund (IMF) to reduce the country’s budgetary deficit, which it has aimed to cut to about 16 per cent in its finance plans for 2011 from a figure of 26.5 per cent announced by President Mohamed Nasheed in November.

However, Mahloof told Minivan News that he was “deeply concerned” about how long the government would consider retaining the wages for after upcoming council elections had been concluded in February.

“I am really happy about the salaries reinstatement, but I see this as a political stunt,” he said. “The president has increased the salaries of the civil service before; the last time ahead of parliamentary elections. We will have to see if they remain in place and for how long.”

The passing of the budget has not been without controversy over the last week, leading to protests involving NGOs, political activists and civil service workers on Male’s streets over proposed amendments to increase the wages and privileges afforded to MPs.

According to Mahloof, the civil servant wage rises had been the result of recommendations forwarded by opposition members.

The DRP MP claimed he would now be turning his attention to addressing concerns over the affordability of possible rises in the salary of his peers in the Majlis that have proved unpopular amongst demonstrators outside of parliament last week.

“Amendments have also be sent concerning the proposed Rf20,000 wage increases,” added Mahloof.

Despite Mahloof’s concerns over the length of government commitment to the salary levels, acting Finance Minister Mahmood Razee said the reinstatement of civil service wages had been an important commitment for government that had not previously been affordable.

“We have had to match our expenditure to revenue,” the acting Finance Minister said. “We are working with the civil service closely on our plans.”

However, in considering other budget recommendations passed by parliamentary majority, such as increasing the salaries and privileges afforded to MPs, Razee said that they would “certainly have to be reviewed” in terms of affordability within the current projected budget of about Rf12.6bn.

“I will be saying the same to the president,” he added.

Razee had previously said that presidential approval would still be required for any amendments to be passed relating to salaries within the Majlis.


Parliament called to arbitrate civil servant pay dispute

The ministry of finance has asked parliament and the Maldives Monetary Authority (MMA) to arbitrate a dispute between the ministry and the Civil Service Commission (CSC) over the restoration of civil servants’ salaries.

Parliament has been asked to act as a mediator as the ministry “does not believe a satisfactory solution can be found through discussions with the commission”.

Until the dispute is resolved, “employees will receive the salary that was reduced due to the economic circumstances,” the finance ministry’s statement said.

The CSC meanwhile criticised the ministry for a lack of communication and unwillingness to meet for discussions.

“They could ask us to sit down and discuss this tomorrow morning and we would be there,” said CSC member Mohamed Fahmy Hassan.

“We’ve sent many letters and made many requests for them to submit information but they have not submitted it to us,” he said.

The CSC was not opposed to the involvement of third parties such as the MMA, he said, but having another government institution like the MMA acting as a go-between “sounds a bit odd.”

“We can discuss the issue with MMA or the People’s Majlis, but there’s going to be no decision made without the involvement of the finance ministry.”

Parliament broke for recess in December and will begin its first session of the year in March.

Waiting game

On 30 December, the CSC issued a circular announcing that civil servants’ salaries and allowances had been restored to their former levels.

Since it was agreed that the pay cuts will be rescinded once government revenue exceeds Rf7 billion, the CSC argued, the salaries would have been “automatically reversed” when parliament approved this year’s budget with a revenue of over Rf7 billion.

However the finance ministry’s statement criticised the commission for the announcement as it came after the ministry had declared that the economic circumstances had not changed.

“And while it did not consult with the ministry, the fact that the Civil Service Commission did not seek the advice and counsel of the Maldives Monetary Authority, the most appropriate independent institution to approach before making such a decision, is regrettable,” it said.

No deal

The pay cuts of up to 20 per cent for civil servants were made necessary due to a fall in government income and an increase in expenditure, the ministry claimed.

In August, the government introduced a raft of austerity measures – including cutting back on travel, controlling capital items purchases, halting renovation and repairs unless necessary and pay cuts of 20 per cent for political appointees ranked higher than deputy minister to alleviate the inherited budget deficit.

Recurrent expenditure on salaries and allowances for government employees was 34 per cent of total expenditure in 2008, a 62 per cent increase from the previous year.

The International Monetary Fund [IMF] has noted that this puts the Maldives in first place among small island nations for the highest expenditure on government employees as a percentage of GDP.

Pay cuts for civil servants were enforced in October following protracted negotiations with the CSC.

The commission exercised clause 43[c] of its Act, which authorise it to alter salaries based on “special economic circumstances” subject to a review in three months.

“The measure proposed by this ministry to determine the special circumstances was the state’s income and expenditure,” the ministry’s statement read. “It was therefore agreed that the economic circumstances would be considered to have passed once the state’s annual income exceeds Rf7 billion, while it was also agreed that the state’s total income does not include foreign aid once-off revenue.”

It further added that the pay cuts were not made for a three-month period, but would be subject to a review to determine if the economic circumstances had changed.

The inclusion of foreign aid in the government’s budget is a particular point of contention, as it pushes the total revenue over Rf7 billion. Actual government revenue excluding foreign aid and once-off revenue was projected to be Rf6.8 billion in the budget.

“We understood it was the total revenue of the government. The ministry’s press release on 25 September said they were not going to exclude anything. This issue needs to be resolved,” said Fahmy.

Special circumstances would be considered to have improved when the state’s “recurring income” reaches Rf7 billion, the ministry said, and “not when it is estimated that Rf7 billion will be received in income.”

Scaring off donors

The opposition-dominated committee selected to review the budget made a recommendation to inject Rf617 million to restore civil servants’ salaries as the proposed budget had Rf7.05 billion in revenue.

While the original budget submitted to parliament had a deficit of 14.8 per cent and was acceptable to the IMF, the alternations made by parliament increased it to 18.8 per cent.

The ministry now estimates the deficit by the end of the year will exceed 18.8 per cent as the government will lose Rf150 million in revenue due to parliament’s failure to pass taxation legislation.

Increasing expenditure at the beginning of the year based on projected revenue was “not sensible at all”, the ministry insisted.

There were four ways the government could plug the deficit – printing money, financial assistance from international monetary organizations, obtaining commercial loans and devaluing the rufiyaa – all of which would have adverse effects of the economy.

Printing money would lead to inflation and a dollar shortage, taking commercial loans would make it harder for the private sector to secure loans and devaluing the currency would increase inflation and the price of imports.

Instead, the ministry reached agreements with the IMF, World Bank and the Asian Development Bank to obtain loans to plug the deficit.

However hiking salaries for government employees without increasing the revenue base was not “a sustainable fiscal or monetary policy”, and these international organisations have since informed the government that they are reconsidering the loans, the ministry’s statement said.

If the Maldives does not have an economic framework that is acceptable to the IMF, it continues, it would not be possible to obtain assistance or loans from other financial institutions.

Apart from potentially losing Rf755 million in assistance from the World Bank and ADB, the donor forum organised by the World Bank and scheduled for March could be canceled.

“Therefore, the ministry believes reducing expenditure is the wisest and most economically sensible way,” it said, adding that expenditure on wages had to be kept low until the economy rebounds.

Fahmy said the CSC was willing to negotiate and wished to meet the finance ministry “to hear their views on the economic circumstances.”

“We have always said that if there is a national crisis we will put the national interest above the interest of civil servants,” he said.

“But it is difficult to justify that to 29,000 civil servants if the government is spending on all the other items in the budget.”


CSC asks govt to restore civil servants’ salaries

The civil service commission (CSC) has sent a letter to parliament requesting civil servants’ wages be restored to their former levels as the proposed mid-term 2010 budget anticipates a revenue of more than Rf7 billion (US$544 million).

CSC Spokesperson Mohamed Fahmy Hassan said a similar letter was also sent to President Mohamed Nasheed, reminding him of his remarks in October.

In his weekly radio address, Nasheed said civil servants’ pay cuts were a temporary measure and would be restored once the economy recovered and the government had increased its revenue beyond Rf7billion (US$544 million).

“The president’s message was very clear. In this case where so many are involved and it’s a promise that he made…I am very sure that in January they will be given their full salaries,” said Fahmy.

Ismail Shafeeq, permanent secretary of the finance ministry, said that according to the law, the finance ministry has to review the pay cuts every three months with the next evaluation coming at the end of the month.

Projected Revenue

Addressing MPs last week, Finance Minister Ali Hashim said the projected revenue for 2010 was Rf7.3 million (US$568 million).

Measures to increase government revenue, including the introduction of new taxes such as corporate tax and a goods and services tax to be imposed on tourist resorts, are still awaiting the passage of legislation in parliament.

Speaking to Minivan News today, Mohamed Zuhair, president’s office press secretary, said civil servants’ salaries would only be restored
when the government’s revenue “physically” reached Rf7 billion (US$544 million).

“If we reach it by September then September we will do it,” said Zuhair.

Acknowledging that the government may not reach its expected revenue, Fahmy said civil servants’ salaries should only be reduced if the government fails to attain its target.

In August, the government unveiled a raft of austerity package to help ease the budget deficit. Measures included pay cuts of up to 20 per cent for civil servants, a reduction in overtime as well as cutback on foreign travel.

The pay cuts have sparked outcry and several protests among civil servants and opposition groups who have accused the government of economic mismanagement.

“We will hold another demonstration on 10 December outside the finance ministry to back up the commission,” said Abdullah Mohamed, spokesperson for the civil servants’ association.

“We believe this damage was done to civil servants as a punishment and if there really were special economic circumstances, members of parliament and independent institutions too should have taken a pay cut,” he added.

Last month, an informal meeting of MPs on pay cuts ended in a heated argument after opposing parties accused each other’s government of mishandling the finances. All MPs Minivan News spoke to said they would be willing to take a salary reduction.

Pay cuts for independent institutions came into effect this month.


In their letter, the commission also noted that civil servants asked to work overtime should be paid accordingly.

“If and where and when they are asked to do overtime, they are entitled to be paid overtime under the employment law,” said Fahmy.

He added that the CSC had received “lots of complaints” from civil servants who had been asked to work overtime but had not been paid.

“The work should be organised in such a way so that nobody should do overtime. In very specific cases where it’s needed to complete a
crucial task then that person has to be paid,” he said.

Zuhair said the government’s policy was that overtime should not exceed 15 per cent of the total hours worked and that all staff
working overtime should be paid.

If this was not the case, he continued, civil servants “should just refuse to work overtime.”