CSC defends restoration of civil servants’ salaries

The Civil Service Commission (CSC) has defended its decision to restore civil servants’ salaries and allowances in January to their former levels.

At a press conference today, Abdul Muhsin, vice-president of the commission, said the condition for restoring salaries to pre-October levels was the government’s revenue exceeding Rf7 billion (US$545 million) as it was the main indicator to determine whether the “special economic circumstances” that made the pay cuts necessary had passed.

Muhsin said a statement on the budget published on the finance ministry website stated that income for government offices alone would exceed Rf7 billion.

In the discussions with the finance ministry before the pay cuts were enforced in October, he added, it was agreed that salaries would be restored “automatically” when revenue reached Rf7 billion.

Moreover, the CSC regulations state that changes to salaries must be reviewed every three months.

The finance ministry “has been told” of the decision to restore salaries, he said.

In August, the government introduced a raft of austerity measures, including pay cuts for political employees, reduction of overtime and cutting back on travel, to alleviate the inherited budget deficit.

Last month, the parliamentary committee selected to review the budget made a recommendation to inject Rf617 million to restore civil servants’ salaries.

Muhsin said the commission received a letter from parliament informing them that salaries had to be restored if CSC believed the economic circumstances had passed.

Speaking to Minivan News today, Ahmed Assad, state minister for finance, said the commission did not consult either with the ministry or the Maldives Monetary Authority (MMA) before making its decision.

“Our indicators don’t show that the economic circumstances have passed,” he said.

Assad said the ministry would “respect the decision of parliament” on the issue of restoring salaries.

Muhsin said all expenditure from the budget was made under the assumption that the projected revenue would materialise. “So the commission’s thinking is why should civil servants’ salaries not be restored from the first day assuming that the income will be received.”

Mohamed Fahmy Hassan, spokesperson for the commission, said the changes were valid for a three-month period and would automatically be restored in January.

“The finance ministry has not discussed with us to maintain the reduction,” he said, adding the restoration was not a decision made by the commission so much as an automatic reversal.

Asked whether the commission believed the “special economic circumstances” had passed, Muhsin said it was beyond the CSCs “area of competence”.

But, he added, statements on the finance ministry’s website and fiscal indicators were publicly available.

The commission only looked to see whether government revenue reached Rf7 billion, he said.

Fahmy said he believed the finance ministry would respect the law and issue funds to restore salaries to their former levels.


Civil servants’ salaries to be restored

The Civil Service Commission (CSC) has decided to restore salaries and allowances of civil servants to its levels before the pay cuts enforced in October.

A circular issued by the commission yesterday states that the cuts were made on the request of the president and the finance ministry, which informed CSC it did not have enough funds in the budget for employees’ remuneration.

“Since the finance minister had estimated in the state budget for 2010 submitted to the People’s Majlis that government revenue would exceed Rf7 billion (US$544 million) and because the commission does not believe reduction of civil servants’ salaries for three months could be prolonged as a measure due to the economic circumstances facing the country…the commission has decided that civil servants will receive the full salaries determined for their posts from 1 January 2010,” it announced.

It adds that government offices and departments have been informed of the decision.

Following negotiations with the finance ministry in September, the CSC imposed pay cuts under clause 43(c) of its regulations, which authorises the commission to alter salaries subject to a three-month review based on “special economic circumstances”.

When pay cuts of up to 20 per cent were enforced in October, the commission and the finance ministry agreed that the economic circumstances would be considered over when the government’s annual income increases beyond Rf7 billion.

Special circumstances

Speaking to Minivan News today, Adam Zahir, a member of the executive committee of the Maldives Civil Servants’ Association, said parliament made amendments to include additional funds in the budget to restore salaries and the CSC has now said it will follow the budget.

Parliament passed the budget for 2010 with an additional Rf617.6 million (US$48 million) to restore the salaries.

“I believe we have now got 100 per cent guarantee that salaries will be restored,” he said. “But, with the way things have been going, we will believe it when it happens.”

MPs had informed the association that were enough funds in the original budget to pay the salaries, he continued, but now it has been confirmed “in a more certain and transparent way”.

Zahir said the association found it hard to accept the “special economic circumstances” because of the government’s actions and failure of either independent institutions, parliament or the judiciary to enforce similar pay cuts.

The administration continuing to make political appointees “showed that the money was there”.

Moreover, he said, both MPs and independent institutions have refused to accept the special circumstances and the government has not adequately proven that the situation warranted the austerity measures.

“So we don’t believe it because the people who would know these things best don’t believe it either,” he said.

Austerity measures

In August, the government announced it would be introducing a raft of austerity measures, including reduction of overtime, cutting down the number of overseas trips and releasing government rented properties where possible, to alleviate an inherited budget deficit.

In addition to civil service wage cuts, the president said he planned to halve the 32,000-strong civil service by 2011.

Both decisions caused an angry backlash from opposition parties who petitioned the CSC to refuse the wage cuts, which they argued would adversely impact the lives of many citizens.

In his maiden speech at the 64th UN General Assembly on Thursday, President Mohamed Nasheed said the Maldives had “suffered badly” from the global economic recession.

“Moreover, since assuming office, it has become clear to us that in the run-up to last year’s election, the former government engaged in highly irresponsible economic policies in the hope of buying their way to victory,” he said.

Nasheed said government planned to tackle the economic crisis by reducing the civil service, privatising public utilities, and promoting private enterprise and trade.


CSC refutes media reports of condition attached to IMF aid

The Civil Service Commission (CSC) has denied media reports the International Monetary Fund (IMF) approved financial assistance of US$92.5 million on the condition that salaries and allowances for civil servants are reduced.

A press release issued by the CSC yesterday states that the commission did not believe the IMF imposed the condition that salaries are reduced solely for civil servants.

It quotes from a statement issued by the IMF on Friday, which states the government was taking action to reduce expenditure, “including unwinding part of the recent large wage increases” and had “taken steps to reform the civil service”.

The commission points out that the IMF statement does not exclude or single out a particular area for salary reductions.

“Since it does not define the outcome of the reform when it refers to the civil service reform, we believe the opportunity would remain for employees’ salaries to be increased,” it reads.

Last week, the CSC sent letters to both President Mohamed Nasheed and parliament requesting civil servants’ salaries be restored to their former levels.

In August, the government introduced a raft of austerity measures, such as pay cuts for political appointees up to 20 per cent, to alleviate the budget deficit.

Following negotiations between the finance ministry and the CSC, the commission agreed to reduce salaries of civil servants up to 20 per cent subject to a review in three months.

When the pay cuts were enforced in October, it was agreed that the salaries would be restored to former levels once government revenue exceeds Rf7 billion (US$544 million).

The mid-term budget for 2010 was proposed to parliament with projected revenues of Rf7.3 billion (US$568 million).

The commission’s press release states that as section 43 of the CSC regulations empower the commission to alter salaries, other government authorities could not sign agreements stipulating reductions for civil servants’ salaries.

Presenting the budget to parliament, Finance Minister Ali Hashim said the IMF, World Bank and Asian Development Bank had recommended reductions to the civil service.

Mohamed Zuhair, president’s office press secretary, told Minivan News last week that salaries would only be restored once the revenue “physically” reached Rf7 billion.

The civil service pay cuts sparked outrage from the opposition, which accused the government of unfairly targeting civil servants as they were sympathetic to the former government.

The opposition further denied that the economic circumstances warranted the pay cuts and criticised the government for “economic mismanagement”.