Tag: civil servants

Maldives Green Fund to merge “scattered” climate finance

Transparency Maldives has called for stronger anti-corruption climate finance safeguards, following the government’s declaration it would establish a ‘green fund’ that would merge all climate change, conservation, and sustainable development project trust-funds.

President Mohamed Waheed Hassan Manik’s cabinet proposed a Maldives “Green Fund” be established, which would merge all the currently established trust funds in accordance with the government’s Biosphere Reserve sustainable development policy.

The purpose for merging the funds would be to enable cost reductions and strengthen operational efficiency for foreign investments for waste management, water management and renewable energy projects.

Shortly following this April 30 announcement, Transparency Maldives called for “stronger anti-corruption safeguards in climate finance” as part of the civil society recommendations presented to the Minister of Environment and Energy Dr Mariyam Shakeela during the “NGO Forum on Environment and Sustainable Development 2013” held May 5.

During the NGO forum, Transparency Maldives Chairperson Mohamed Rasheed Bari called on the government to strengthen governance mechanisms by including stronger standards of transparency, accountability and integrity.

Currently, climate funds are “scattered” because there is no consolidated national governance mechanism with a proper internationally governed governance structure in the Maldives, Transparency Maldives Climate Governance Senior Project Manager Azim Zahir told Minivan News today (May 19).

“In principle establishing a ‘green fund’ to consolidate climate change mitigation and adaptation money is ‘ok’ as long as it adheres to international best practices and good governance standards,” said Zahir.

The Environment Ministry had not responded to inquiries at time of press.

No overarching climate policy

“The government lacks an overarching climate change policy,” a civil society source familiar with the challenges facing climate governance in the Maldives, told Minivan News. “There are no specific goals, which has resulted in project-based, ad hoc and climate change mitigation and adaptation initiatives.”

The source explained that conflicting ministerial mandates and unclear rules have created redundancies and left civil servants “confused”.

“The root cause of the problem is administrative – the lack of clear mandates between who is doing what,” the source said. “There are also ministerial rivalries regarding certain projects because clear mandates are lacking.”

“I find it strange the Ministry of Environment does not have a climate change department, considering they are the people in charge of the entire amount of funds,” the source added.

“One person is in charge of massive [amounts] of funds. There is a lack of human resources within the Environment Ministry. Only a couple of people have dominated [climate change projects] since the 1990’s,” claimed the source.

Some people within the ministry working on foreign aid projects write themselves in as project staff as well to in order supplement their “really low” monthly government salaries of MVR 6000 to MVR 8000 (US$ 389 to US$ 519), alleged the source.

“The same people work on each project, they don’t have new people,” the source claimed.

“These senior civil servants say the Environment Ministry lacks capacity and young people with knowledge and technical skills, however they are not providing training and opportunities [to the newer civil servants].

“They have a complete monopoly on knowledge” which is not being properly diffused, the source added.

Politics and bureaucracy

After the Foreign Ministry has signed a bilateral agreement the funds are transferred to the Finance Ministry, which then allocates the money to the applicable ministry or government agency, according to the source.

Most climate projects were handled under the Ministry of Housing and Environment during former President Mohamed Nasheed’s administration, the source explained. Additionally, the President’s Office also undertook many climate change initiatives and established the Presidential Advisory Council on Climate Change in 2009.

“The council still exists on paper and while some people within the President’s Office said the council members have been changed [following the controversial transfer of power February 7, 2012], no one has been informed if they have been fired. They have no idea what’s going on,” alleged the source.

Additionally, the National Planning Council (NPC) – chaired by the president and consisting of various ministers and civil society representatives – was formed in February 2009 to coordinate equitable sustainable development nationwide.

Currently the NPC website states: “Due to the change of the Government , the work of the National Planning Council is currently under reform. Therefore all proposals and issues submitted to Department of National Planning/ National Planning Council is on hold for the time being.”

Under President Waheed’s government the Ministry of Housing and Environment was split to form two new entities, the Ministry of Housing and Infrastructure as well as Energy and Environment.

Due to the these changes and ongoing government instability “There has been a significant change in the process of how the project [cycle] works,” explained the source.

“For various political reasons – and the delicate nature of politics since February 2012 – climate change funds have not been consolidated,” the source continued. “It takes a lot of work to channel climate funds. Even under Nasheed’s previous administration there were the same problems.”

An additional reason Waheed’s administration “differs” from Nasheed’s is the current government “has not been ‘very keen’ on cooperating with civil society,” alleged the source.

“Previously they behaved really unprofessionally toward certain NGOs, however since the latter half of 2012, the government has started to try and engage NGOs and civil society – maybe to increase the administration’s legitimacy,” the source continued.

“A positive is the Environment Ministry under Waheed’s administration has been very active. They actually try to do things,” the source noted.

“However, the government consults civil society stakeholders after they’ve already decided everything. They invite NGOs to listen to their opinions, but do not seek their input during the project planning phase,” the source added.

“Ultimately, most [climate finance] problems apply to both administrations, under Nasheed and Waheed,” the source added.

Existing trust funds

“There are three umbrellas – the Maldives Environmental Management Project (MEMP), the Climate Change Trust Fund (CCTF), the Sustainable Renewable Energy Project (SREP) – under each there are different components,” Environmental Protection Agency (EPA) Environment and Social Safeguards Coordinator Ibrahim Mohamed told Minivan News earlier this month.

“The idea is that these projects be developed in such a way that the entire nation becomes a biosphere reserve, that’s the overall goal,” he added.

The MEMP umbrella is a US$ 13.88 million World Bank loan, approved in 2008 and set to close in 2014.

“The MEMP is a soft loan in the sense the interest is very less, and this project also has several components,” said Mohamed.

“Only one component is solid waste management, focused in Ari Atoll. Other areas include environmental monitoring, training and capacity building, and a bachelor of environmental science was established at the Maldives National University (MNU),” he continued.

“There is also a renewable energy component to install solar roofing of public buildings on Thinadhoo [Island in Huvadhoo Atoll], so at least 25 percent of their energy will come from solar. That component also has awareness and training on energy efficiency and conservation of energy.

The US$ 9.5 million CCTF picks up where MEMP left off, according to Mohamed.

“Under the CCTF umbrella we have three components: clean energy for climate mitigation, wetland conservation and coral reef monitoring, as well as solid waste management,” Mohamed explained.

“The World Bank is managing the donor money from the CCTF. They don’t finance directly to the government, because they want it to be managed by a reliable, transparent, international fiduciary system.

“The CCTF idea is that the project(s) we develop becomes an exemplary example for other small island states,” he added.

The CCTF was established in 2010 after the signing of an MOU between the Maldives government, the World Bank Group and the European Union with the aim of targeting solid waste management, capacity building for environmental management, and technical assistance for monitoring and managing key natural assets.

The US$138 million SREP was established in 2012 to generate 16 megawatts of renewable energy on 50 islands in the next five years.

The SREP scheme was directly related to the Scaling-up Renewable Energy Program (SREP) originally planned to be submitted to the World Bank in February 2012, but was not due to the political upheaval that resulted from Nasheed’s controversial resignation February 7, 2012.

Additionally, the Maldives has received Global Environment Facility (GEF) grants totaling US$14,443,426 – that leveraged US$35,176,820 in co-financing resources – for 10 national projects, four regional projects, and eight small grants. The project areas focus on climate change, biodiversity, international waters, land degradation, persistent organic pollutants, and the ozone layer.

The GEF is an independently operating financial organisation that supports national sustainable development initiatives and addresses global environmental issues by working in partnership with the United Nations, United Nations Development Programme (UNDP), and Asian Development Bank (ADB) as well as civil society organisations and the private sector.

The GEF “unites” 183 countries with these actors and claims to be the largest public funder of projects to improve the global environment.

“The EU has suggested that the Maldives’ government look at one atoll with the potential for populations to move and to live and do more projects there – such as waste management, clean energy, protection, preservation, adaptation – all things in one big area, so that these things will be more visible,” said Mohamed.

“If all the components go into one atoll they will become more climate resilient,” he added.

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Government “not aware” of request to temporarily halt hiring of senior civil servants

The government has said it is “not aware” of a Civil Service Commission (CSC) request to cease recruiting for any position higher than the role of assistant director until 2013, despite reports in local media to the contrary.

President’s Office Media Secretary Masood Imad said he had not been made aware of any requests to amend government recruitment practice and would need to clarify the matter, and referred Minivan News to the CSC.

Minivan News was awaiting confirmation at time of press both from Masood and CSC President Mohamed Fahmy Hassan over whether an official request had been made to curb government offices hiring senior civil servants.

However, local media, citing an an named government source, speculated that the reported CSC request was linked to “financial difficulties” currently facing the state.

The government official told the Sun Online news service that despite the need for new employees within the Finance Ministry, the recruitment process for such roles had been halted in line with the CSC’s request.

Earlier this week, Minister of Finance and Treasury Abdulla Jihad claimed the government was currently unprepared to meet its recurrent expenditure – including salaries – for the final three months of 2012 without a US$25 million loan promised by the Indian government.

While unable to confirm if the reported CSC request was linked to Finance Ministry fears over insufficient funding for state wages, key economic figures within the government of President Dr Mohamed Waheed Hassan have maintained that more drastic budget cuts are required to balance expenditure.

Despite government commitments to cut departmental budgets by 15 percent in 2012, Jihad told Minivan News last month that even with financial assistance promised from China and India, further cuts would need to be made to state salaries over the next year to deal with deficit concerns.

Jihad and Economic Development Minister Mohamed Ahmed were not responding to calls at the time of press.

CSC President Fahmy said in September 2012 that as no request had so far been made by the government to reduce the size and budget of civil society organisations, it did not have concerns about potential job cuts.

“Our mandate is to provide human resources to the government. As long as there is no effect on the salaries or number of civil servants, we will not seek to intervene in the policy of government,” he said.

With state income lower and expenditure higher than predicted, this year’s budget deficit had been forecast to reach MVR6billion (US$389 million), equivalent to around 28 percent of real GDP.

Despite this deficit, President Waheed has been campaigning this week in Faafu and Dhaalu Atolls, reportedly to reassure the public that the economy was running smoothly, whilst criticising those who he claimed sought to weaken it.

Waheed is also reported as having said that 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.

“The Maldivian economy is fine. Don’t listen to whatever people say. We don’t have to [worry] about the Maldivian economy being in a slump,” he was quoted as saying during a rally in Meedhoo.

US$25 million in funding from India was agreed upon last month as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

Unpaid bills

However, despite president Waheed’s reassurances, a number of state owned institutions have this month faced disconnection from the capital’s power grid as bills amounting to around MVR 150million (US$9.7million) were said to be owed to the State Electricity Company (STELCO).

Responding to blaming of his ministry, Jihad told Sun that the finances were simply not there, pointing to the adoption of spending policies of the previous administration.

“We are not receiving foreign aid as was included in the budget. How can we spend more than we receive? That’s why those bills are unpaid. We can’t spend money we don’t have,” he told the paper.

Former Minister of Economic Development Mahmood Razee has previously told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”

“If they don’t get the loan, they will have to cut travel expenses, stop certain programs – take drastic measures or get another loan,” said Razee, claiming that the only alternative would be to sell treasury bills.

Following reports in August that the government was attempting to raise funds through the sale of treasury bills, former Finance Minister Ahmed Inaz said that this would not address the concerns of the IMF, prolonging economic uncertainty.

China has also made large commitments towards the Maldives’ economic development in recent months, although Razee said he believed that current changes within the Chinese government in the upcoming month made this an inopportune time to look there for additional financial aid.

In August, the current Finance Ministry announced its own austerity measures intended to wipe over MVR2.2billion (US$143 million) from this year’s budget deficit though few of these propositions have as yet been followed through.

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Finance Ministry orders all institutions to pay back former govt’s civil servant salary cuts

The Finance Ministry has today issued a circular informing all institutions to pay the amount cut from civil servants from January 2010 to December 2012 by the former government, staring from July onwards.

The circular said the money should be paid monthly and not in a lump sum, and advised all institutions to pay the amount from the annual budget for wages. If the money in budget was not enough, the finance ministry advised the institution to cut the money from the budget allocated for other expenses.

The circular was signed by the Ministry’s Financial Controller, Mohamed Ahmed.

The reduction in civil servant pay was introduced by the previous government in an attempt to manage a financial crisis back in 2009. The initial deduction, agreed between the Finance ministry and the Civil Service Commission (CSC), was only due to last for three months until the government’s income had risen above Rf7billion (US$544 million).

However, after the Finance Ministry refused to restore wages to the previous level, the CSC took the case to the courts.

The Civil Court ruled that the Finance Ministry did not have the authority to reduce the salaries, a cut of up to 20 percent in some cases. The CSC at the time interpreted this as a decision to restore the deducted salaries, a decision upheld by the High Court in May of last year.

In April this year the Civil Service Commission said the wage repayments, amounting to Rf443.7 million (US$28.8 million), will be disbursed in monthly installments over 12 months from July 1 this year. This money has not been accounted for in this year’s state budget, the deficit of which has already drawn concern from the International Monetary Fund.

In January 2010 the International Monetary Fund (IMF) warned that international funding to the Maldives would be threatened if civil servant salaries are restored to former levels.

“One of the primary drivers of the large fiscal deficit has been government spending on public wages, which has more than doubled between 2007 and 2009, and is now one of the highest in the world relative to the size of the economy,” Rodrigo Cubero, IMF mission chief for the Maldives said at the time.

“Measures that would substantially raise the budget deficit, such as a reversal of previously announced wage adjustments, would also put the program off track, jeopardising prospects for multilateral and bilateral international financing,” he warned.

The Maldives is currently facing a foreign currency shortage, plummeting investor confidence, spiraling expenditure, a drop off in foreign aid and a crippling budget deficit of 27 percent.

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Government silent over Maldives bankruptcy claims

The government has refused to comment on claims made in local media by leader of the coalition-aligned Jumhoree Party (JP) that the Maldives was now bankrupt and already unable to pay some civil servants.

JP Leader and MP Gasim Ibrahim claimed that despite government efforts, the Maldives was now bankrupt and unable to pay some civil servants after steady economic decline within the nation, according to newspaper Haveeru.

Just last month, Parliament’s Financial Committee revealed that expected revenue for 2012 had plunged 23 percent, whilst spending was set to increase by almost 24 percent.

President’s Office Spokesperson Abbas Adil Riza today said that he was unaware of the bankruptcy comments linked to Gasim and could not comment on the matter, referring Minivan News to Minister of Finance and Treasury Abdulla Jihad.

Both Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls by Minivan News at the time of press.

Although the country’s Civil Service Commission (CSC) said that it had been involved in discussions with the Minister of Finance to try and overcome economic concerns, Chairman Mohamed Fahmy Hassan said that there had as yet been no issue with payments to staff.

“As of last month, all payments have been made in full, however it is the Finance Ministry who would know about the current situation,” he said.

Speaking to Minivan News on Saturday, Maldives National Defence Force (MNDF) spokesperson Major Abdul Raheem said despite some reports circulating to the contrary, he was not aware of any problems with payments to military officers.

Spending review

In attempts to counter its present spending shortfall, the government has unveiled proposals such as a revision to the country’s import duties and Goods and Services Tax (GST) to alleviate its financial difficulties.

The proposals have come under criticism from former finance chiefs serving under the previous government, who allege that such changes “do not make sense”.

Whilst committed to reducing state expenditure, Jihad recently announced his aim to avoid cutting the salaries of civil servants in order to tackle the nation’s budget deficit, seeking to make savings in other areas of expenditure first.

“Civil servants are the lowest ranking of all government employees. We will try to cut all non-wage expenditure by 15 percent. Salaries will be considered after this,” he said at the time.

Despite this pledge, Jihad added that a review of public salaries was set to be conducted by a pay review board that would also focus on independent commissions in order to reach an agreement on the necessary reductions.

Civil Service salaries

Between 2004 and 2009, the country’s fiscal deficit increased exponentially on the back of a 400 percent increase in the government’s wage bill.

The year’s 2007 to 2009 included the most significant largesse as the World Bank found wage expenditure to have increased from Rf 2 billion to almost Rf 5 billion even as revenues began to recede.

According to statistics from the Civil Service Commission (CSC), the number of permanent civil servants has more than halved between 2006 and June 2011.  There has been some contention in the past, however, that the transfer of many civil servants to state owned companies under the previous government masked the true figures.

The Maldives Monetary Authority (MMA) published figures for May that estimated the government will spend Rf2.6billion (US$168 million) on salaries and wages in 2012.

Maldives Bankrupt?

JP Leader Gasim – himself a former finance minister – claimed the Maldives had already been bankrupted after steady economic declines in recent years. He said that the evidence of the country’s troubled economy may not be immediately apparent, but would be seen in the “near future” as the state lacked the “necessary finance” to settle debts, according to Haveeru.

Gasim was reported as saying that “pointing fingers and blaming others” would not provide the country with an economic solution, calling instead for parliament to pass bills to alleviate the economic situation. The nature of these bills were not specified in local media.

Gasim’s phone was today switched off, while JP presidential candidate Ibrahim Didi was not responding to calls.

However speaking to local media, the JP leader added that the “actions of some” had negatively impacted on the nation’s economy, pointing to what he claimed were calls for a boycott of the Maldivian tourism industry.

Gasim, Maldives Vice President Waheed Deen and Progressive Party of the Maldives (PPM) MP Abdulla Jabir are among a number of figures associated with the present coalition government that are included in a list of resort owners included in the Maldives Tourism Advisory (MTA).

The advisory, established by the Friends of Maldives NGO, has a website utilising a ‘traffic light’ system recommending guests avoid resorts alleged by the Maldivian Democratic Party (MDP) to be directly linked in bringing about February’s controversial transfer of power.

Travel associations in the country have in turn criticised the MTA, expressing “serious concern” over what it alleged was a “concerted international campaign against several of the country’s resort operators.

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Supreme Court upholds High Court’s ruling to allow civil servants to take part in political activities.

The Supreme Court has today ruled that article 53 of the Civil Service Act is inconsistent with article 30[a] of the constitution, and has supported the High Court ruling invalidating the article 53 of the Civil Service Act.

The case was appealed by the Attorney General at the Supreme Court, after the High Court determined that the article 53 of the Civil Service Act was inconsistent with article 30[a] of the constitution.

Article 53 of the Civil Service Act states that Civil Servants cannot participate in any political activities while article 30[a] of the constitution states that it is a right of every citizen to take part in political activities.

The Supreme Court’s verdict read that section 77[a] to [d] of the Civil Service Act that defines political activities, which has mentioned every single activity that would come to a person’s mind when they think of political activities, and that article 77[a] to [d] was defined as definitely inconsistent with the constitution’s article 30[a].

Local media reported that the case was lodged with  the High Court by a former civil servant who worked at the Youth Ministry named Mohamed Haanim, who was dismissed from his position after he took part in an opposition Dhivehi Rayyithunge Party (DRP) rally.

The case was logged to the Supreme Court on March 2009 and the case reached to a conclusion yesterday.

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Concerned citizens seek court order against committee allowance

A group of concerned citizens protesting a controversial Rf20,000-a-month (US$1,290) committee allowance, approved by MPs for themselves in December 2010, have filed a case at Civil Court seeking a court order to stop the Finance Ministry from releasing the funds to parliament.

A loose association of concerned citizens and members of civil society organisations launched a campaign last month after parliament’s Public Accounts Committee (PAC) decided to issue a lump sum of Rf140,000 (US$9,000) as committee allowance back pay for January through July this year.

Speaking to press outside the court building, lawyer Mohamed Shafaz explained that the grounds for the claim were constitutional provisions on non-discrimination (article 17) and equal protection and benefit of the law (article 20).

“For example, the reduced amount from civil servant’s salaries was in the 2010 budget [to be paid back] and in the 2011 budget as well if you look at it properly,” he said, arguing that Finance Ministry could not release funds for MPs’ committee allowance, which was approved in December 2010, without paying back civil servants.

“The money is coming from the same place,” Shafaz continued. “If something the civil servants have not received is going to be given to others, which was approved much later, the chance of civil servants receiving the reduced amount will be very slim.”

A court order was sought to halt the release of the funds until a court of law delivers a ruling on the issue, Shafaz said.

Shafaz also referred to article 43 of the constitution, which states that “Everyone has the right to administrative action that is lawful, procedurally fair, and expeditious.”

Austerity or bust

In October 2009 – almost a year into the new administration – unpopular pay cuts of up to 15 percent for civil servants were enforced as part of austerity measures to alleviate the country’s ballooning budget deficit – among the highest in the world at 26 percent of GDP in 2009 (the International Monetary Fund had refused financing to Sri Lanka because the country’s fiscal deficit reached 10.5 percent).

However the austerity measures were met with a severe political backlash. In December 2009, the opposition-controlled parliament added Rf800 million (US$62 million) to the 2010 state budget, including the restoration of civil servant salaries to previous levels and subsidies for sectors ranging from fishing and agriculture to private media.

“One of the primary drivers of the large fiscal deficit has been government spending on public wages, which has more than doubled between 2007 and 2009, and is now one of the highest in the world relative to the size of the economy,” Rodrigo Cubero, IMF mission chief for the Maldives, said in January 2010.

“Measures that would substantially raise the budget deficit, such as a reversal of previously announced wage adjustments, would also put the [IMF-backed structural adjustment] programme off track, jeopardising prospects for multilateral and bilateral international financing,” Cubero warned at the time.

After weeks of legal wrangling over restoring civil servants salaries, the Ministry of Finance accused the Civil Service Commission (CSC) of hiding “a political agenda”, and in February 2010 filed a case with the police asking them to investigate it on suspicion of trying to topple the government “and plunge the Maldives into chaos.”

At the height of the dispute in early 2010, permanent secretaries were ordered to submit different wage sheets by both the Finance Ministry and the CSC.

In April 2010, the Civil Court ruled that Finance Ministry did not have the legal authority to overrule the CSC. Although the government contested the ruling and refused to restore salaries to previous levels, the High Court upheld the lower court ruling in May this year.

Consequently in November 2010, the IMF delayed its third disbursement under the US$92.5 million programme, citing “fiscal slippages” caused by insufficient progress towards reducing the wage bill and passing tax legislation.

In March this year, Cubero told Minivan News that the IMF saw “bringing the fiscal deficit down as the key macroeconomic priority for the Maldives.”

“A large fiscal deficit pushes up interest rates, thereby undermining private investment and growth, and also drives up imports, putting pressure on the exchange rate and inflation, all of which hurts the Maldivian people, particularly the poor,” he said.

“With the government borrowing at the rate it has [to plug the deficit], it reduces the amount of credit available to the private sector, and that constrains the ability of the private sector to provide jobs and employment,” Cubero explained. “That then constrains economic growth. Furthermore, by spending more than it earns, the government is putting pressure on imports and the exchange rate.”

An internal report by the World Bank obtained by Minivan News observed that the Maldives was “facing the most challenging macroeconomic situation of any democratic transitions that has occurred since 1956.”

Civic action

Volunteers for the civic campaign meanwhile distributed information leaflets at bus stops in Male’ yesterday.

“Two of our group went on the bus and talked to passengers,” said Badr Naseer, a senior activist in the effort. “Ninety-nine percent of people support [the cause].”

Badr said he had personally filed a complaint at the Anti-Corruption Commission (ACC) requesting an inquiry into claims by some MPs that they functioned as “welfare officers” for their constituents.

Earlier this month, Transparency Maldives (TM) condemned remarks by MPs justifying the inflated allowance, noting that “such actions fall under article 3 of of the anti-corruption law and article 13 of the Anti-Corruption Commission Act regarding bribery.”

Badr revealed that the group had met MP Ibrahim Mohamed Solih, parliamentary group leader of the ruling Maldivian Democratic Party (MDP) and MP Ahmed Thasmeen Ali, leader of the opposition Dhivehi Rayyithunge Party (DRP) as part of diplomatic efforts alongside the street activism.

He added that the citizens group also hoped to meet former President Maumoon Abdul Gayoom – who is in the process of forming a new party with a number of MPs previously in the DRP – to discuss the committee allowance issue.

The awareness raising campaign is set to continue from 4:30pm to 6:00pm today at bus stops and ferry terminals in Male’.

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High Court upholds Civil Court’s ruling in favor of CSC regarding salary issue

The High Court has today ruled that Finance Ministry does not have the legal authority to overturn the salaries and allowances of civil servants against the will of the Civil Service Commission (CSC).

In April last year the Civil Court ruled in favor of the Civil Service Commission in a case against the Ministry of Finance regarding civil servants’ salary cuts. The CSC successfully contended that the Finance Ministry did not have the legal authority to make amendments to civil servant salaries.

Delivering the verdict at the time, Civil Court Judge Aisha Shujoon said that the Finance Ministry was not authorised to order offices to prepare salary sheets according to its revised (lower) salaries, and also ruled that the Ministry could not issue an order narrowing the powers of the commission to decide the civil servants’ salaries under articles 6, 18(a) and 43 of the Civil Service Act.

The salaries of the Civil Servants were reduced in October 2009 for three months, after an agreement between the Finance Ministry and CSC, part of austerity measures favoured by the International Monetary Fund (IMF).

After the three months duration was over, the Finance Ministry extended the duration for another three months without the consent of the CSC.

In January 2010, the CSC ordered permanent secretaries to submit the sheets with salaries at the levels prior to the government’s reductions in October, while the Finance Ministry threatened legal action against any civil servants who filled in salary sheets according to the restored amount.

Civil servants held protests in Male’ over the salary reduction, with the support of the opposition, after the government refused to restore the salaries to pre-cut levels citing the poor economic condition of the country.

The situation became especially heated that Feburary after the Finance Ministry filed a case against the CSC with police, alleging the commission was attempting to “to sow discord between the government and public”, and “bring the government to a halt.”

The Finance Ministry further claimed that certain members of the CSC were using the issue as a cover to attain “a hidden political agenda.”

“The CSC is making it difficult for the government to implement the necessary economic policies [and are therefore] indirectly trying to damage the economy,” the Ministry said in a statement, at the time.

“[The CSC’s actions] will result in an increased budget deficit, make it difficult to maintain the value of the rufiyaa against the dollar and will damage the Maldivian economy, affecting each and every citizen of this country.”

After the matter descended into the court system, the government appear to accept that it was unlikely to shake the CSC’s hold on the salary issue, as demanded by the IMF, and instead embarked on an ambitious program of corporatisation whereby entire departments were transformed into 100 percent government-owned corporate entities, outside the jurisdiction of the CSC.

More recently, cabinet launched a program to encourage civil servants to leave the government and enter the private sector or further their education, a move welcomed by the CSC.

Under the scheme, civil servants and government employees were eligible for one of four retirement incentive packages: no assistance, a one time payment of Rf 150,000 (US$11,700), a payment of Rf 150,000 and priority in the small and medium enterprises loan scheme (for those 18-50 years of age), or a lump sum of Rf 200,000 (US$15,600) and priority in government training and scholarship programmes (for those 18-40 years of age).

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Civil servants opt to strike

The Maldives Civil Servants Association (MCSA) has said that a large numbers of its members have requested to take strike action over reduced public sector salaries.

The government had pledged to reduce the salaries of civil servants along with the amount it pays independent commissions as part of attempts to slash costs during an era economic uncertainty.

By last year, civil servants demanded to have their salaries restored by 2011 and also demanded to add the restored salaries to this year’s budget.

President Mohamed Nasheed had said that the civil cuts were possibly to have been revoked by the end of last year.

However, it is the salaries of independent commissions that have been restored, alongside proposed hikes in the wages and privileges afforded to MPs, leading to protests across Male’ during the last few days from various groups.

”The majority of the civil servants want to be on strike, they are unhappy about the reduced salaries,” said Abdulla Mohamed, Spokesperson of the MCSA. ”They wish to stop work for five days.”

Mohamed said that the association had informed the Civil Service Commission (CSC) about the strike last Thursday, but added that it had yet to responded to the association on the matter.

”We do not have much hope that the salaries will be restored,” Mohamed said. ”Nobody seems to realise the importance of civil servants, so when they stop their work, people will understand the services they deliver.”

The MCSA has said that it hopes the strike action will bring the issue of civil service cuts to the attention of the government and the wider international community.

”We know the strike will not restore salaries for the sector and we also understand it is no solution,” the MCSA spokesperson added. “But we just want to bring it to the attention of the international community and the government.”

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CSC demands restored salaries be included in next year’s budget

The Civil Service Commission (CSC) has called on the government to include the restored salaries for the civil servants in next year’s budget.

In September last year the Finance Ministry and the Civil Service Commission agreed to reduce the salaries of civil servants for three months because of the country’s poor financial circumstances. The matter became controversial towards the end of September when the Finance Ministry refused to restore all of the salaries to former levels.

The CSC has since taken the Finance Ministry to court, winning the first round in the civil court and forcing the government to appeal in the High Court.

At the same time, in its Country Report for the Maldives, the International Monetary Fund (IMF) acknowedged the “intense political pressure” but maintained that the restoration of public sector wages “would have a large fiscal impact”, and prevent economic recovery “in the near term”.

President of the CSC, Hassan Fahmy, said today that the commission had met with President Mohamed Nasheed to discuss the issue, and that he had told the commission that the salaries “could be restored soon.”

“Nine months have passed, and we have been trying to resolve the issue through the legal system,’’ Fahmy said. “When the Civil Court ruled that the Finance Ministry does not have the authority to give out orders to decrease the salaries of civil servants, instead of implementing the verdict, the government has appealed in the High Court.”

The High Court has yet to rule on the issue.

Fahmy said the commission wanted “the original salaries of civil servants to be included in the budget next year.”

“It cannot be said that salaries were ‘increased’,” Fahmy said. “It will be the ‘original’ salary of civil servants.”

He said the commission had also sent a letter to the president yesterday as well.

“If it is included in the budget, then it will be for the MPs to approve it [and not the government],’’ Fahmy said. “We hope the government will understand and take leadership to restore the salaries of civil servants.”

The President has meanwhile established a committee to hold discussions between the governtment and the CSC, according to a statement issued by the President’s office.

The Committee will be chaired by the President and will include Minister of Finance and Treasury Ali Hashim, Minister of Economic Development Mahmood Razee, Attorney General Ahmed Ali Sawad, Minister of Fisheries and Agriculture Dr Ibrahim Didi, President of CSC Mohamed Fahmy Hassan, Vice President of CSC Ahmed Hassan Didi, CSC member Dr Mohamed Ali, CSC member Khadheeja Adam, Secretary General of CSC Abdulla Khaleel.

The President’s Press Secretary Mohamed Zuhair and State Minister for Finance Ahmed Assad were not responding to calls at time of press.

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