Details lacking in government expenditure statement: DRP

The first of weekly government expenditure and income statements made public by the Ministry of Finance and Treasury this week lacks detail and does not serve to promote transparency, contends the main opposition Dhivehi Rayyithunge Party (DRP).

DRP MP Dr Abdulla Mausoom, also a member of the parliament’s Public Accounts Committee, told Minivan News today that the party “welcomed” the government following through on its pledge to publicise government expenditure on a weekly basis.

“But half the truth is often more deceptive than lies,” he said. “First of all, there were no details in the statement. It was just categorised expenditure without any detail of the expenditure.”

While the Health Ministry has spent Rf744 million (US$48 million) this year, said Mausoom, “we don’t know what the money was spent for or where it went.”

“The whole health sector was corporatised,” he said. “But basic health services have not improved. There is a lack of equipment or facilities that need to be renewed and there’s always talk of how more doctors are needed.”

DRP Deputy Leader Ahmed ‘Andey’ Mohamed meanwhile explained that if a household servant was given Rf100 for shopping and asked to provide details of expenditure “for him to say I spent Rf50 at shop A, Rf30 at shop B and Rf20 at shop C does not mean he provided any details of what he bought.”

Citizens should be made aware of details of expenditure and the services provided with public funds, he added.

One of the “main areas of concern”, said Dr Mausoom, was Rf1.9 billion (US$123 million) spent out of the Finance Ministry’s contingency budget.

“That is almost Rf2 billion. Where did that money go?” he asked, adding that reduced amounts from civil servants salaries that the government was ordered to pay back by the courts had not been released.

The DRP MP for Kelaa also questioned whether the Rf489 million (US$31.7 million) released to state-owned enterprises so far this year could be categorised as “investment.”

A number of “dodgy companies” were dealing with domestic corporations, such as regional utilities and health corporations, he continued, and planning for “unfeasible business projects” with surveys and Memorandums of Understanding.

“A lot of cost would be incurred for that and it can’t really be considered investments,” he argued, revealing that there were 62 government-owned corporations.

Moreover, as a footnote of the expenditure and income summary stated that the figures were taken from reports that “have not been reconciled or audited,” Dr Mausoom suggested that “the numbers are likely to be understated” and subject to change.

“So there are a lot of unanswered questions,” he said. “But it is good that this has been made public because we are able to raise these issues. If the government wants to dispel all doubts, they should provide full details down to the last laari, which won’t be that hard to do.”

Finance Minister Ahmed Inaz was not responding at the time of press.

Deficit spending

Meanwhile among the highest spending line ministries and institutions were the Education Ministry with Rf1.2 billion (US$77.8 million), the Home Ministry with Rf751 million (US$48 million), Housing Ministry with Rf652 million (US$42 million) and local councils with Rf359 million (US$23 million).

According to the statement put out by the Finance Ministry, government expenditure (Rf7.5 billion) outstripped revenue (Rf6.3 billion) by 20 percent between January 1 and September 8, 2011.

As a consequence, the fiscal deficit reached Rf1.3 billion (US$84 million) at the end of last week.

In addition to Rf3.2 billion (US$207.5 million) spent on salaries and allowances for state employees – the single largest source of expenditure – Rf2.4 billion (US$155.6 million) was needed to cover recurrent expenditure or administrative costs.

Capital expenditure was meanwhile Rf1.2 billion (US$77.8 million) while spending on debt service reached Rf563 million (US$36.5 million).

DRP Deputy Leader Ahmed Mohamed observed that capital expenditure – capital outlays for local component of development projects, fixed assets maintenance and investments for state-owned enterprises – was “only 17 percent of the budget” while recurrent expenditure was over 75 percent.

In December 2010, parliament approved a Rf12.37 billion (US$802 million) annual state budget with a projected revenue of Rf8.8 billion (US$570.7 million) and recurrent expenditure of Rf9.8 billion (US$635.6 million) – 49 percent of which was to be spent on salaries and allowances.

The forecast for recurrent expenditure was 79 percent of government spending.

In March this year, the International Monetary Fund (IMF) warned that “significant policy slippages” have undermined the country’s ability to address its unsustainable budget deficit.

“On the expenditure side, there have been no net fiscal savings from public employment restructuring, public sector wages will be restored to their September 2009 levels earlier than expected, and the new Decentralisation and Disability Bills will lead to considerable spending increases,” the IMF noted in a statement.

The IMF said that while it recognised “the difficult political situation facing the authorities”, “decisive and comprehensive adjustment measures” were required to stabilise the economy, allow sustainable growth and reduce poverty. In particular, it raised concern about the “lack of significant progress in public employment restructuring.

Dr Mausoom meanwhile insisted that as government revenue was expected to exceed previous forecasts because of new tax revenue and reach almost Rf10 billion (US$648.5 million), “the deficit should be reduced by a corresponding amount to the boost in income.”


MDP declares support for mandatory presidential primaries

The ruling Maldivian Democratic Party (MDP) will back a proposal to make presidential primaries mandatory in the political parties bill, currently at committee stage.

MP Ibrahim ‘Ibu’ Mohamed Solih, MDP parliamentary group leader, announced the decision at a press conference yesterday, two days after the main opposition Dhivehi Rayyithunge Party (DRP) declared it would not support the General Goods and Service Tax (G-GST) bill up for a final vote tomorrow.

“We believe that as many members as possible should have a say when a presidential candidate of a political party is determined,” Ibu Solih said. “In our party, we have a general vote among members to select the presidential candidate. When a bill on political parties gets passed, we believe that principle should be included in the law.”

Speaking to Minivan News today, MP Ahmed Mahlouf of the DRP’s Z-faction and spokesperson of the ‘joint opposition parliamentary group’ said that the opposition MPs would “welcome” the MDP’s move.

“But the bill should have been passed a long time ago,” Mahlouf said, reiterating a claim the Z-DRP has made in the media over past months that the bill had been parked at committee as part of “a deal between [DRP Leader Ahmed] Thasmeen [Ali] and MDP.”

The political parties bill has been stalled at committee stage since May 19, 2010.

Mahlouf said that Thasmeen was the one who stood to lose from stipulating mandatory presidential primaries.

“Thasmeen has no backbone,” Mahlouf continued. “At first he said he would support the tax bills and now he’s saying he doesn’t support it anymore.”

The opposition parliamentary group would support any amendment to the political parties bill stipulating mandatory primaries, Mahlouf said.

In June, the breakaway Z-faction called for an “emergency congress” to determine the party’s presidential candidate after ‘Honorary Leader’ and former President Maumoon Abdul Gayoom withdrew his endorsement of Thasmeen.

Thasmeen was selected as the party’s presidential candidate in the DRP national congress in March 2010 after he ran uncontested for the post.

At a press conference today, DRP Deputy Leader Ahmed Mohamed said that he did not believe the MDP’s announcement had any relation to the DRP’s stance on the tax bills.

“Perhaps it might be an effort to shake us up a bit,” he speculated. “We are really not against a primary. We at the Dhivehi Rayyithunge Party are not opposed to a primary. What we’re saying is that the DRP charter does not say anything about a primary.”

Ahmed Mohamed noted that proposal to hold a presidential primary did not pass at the party’s last congress. The DRP charter states that the party’s presidential candidate shall be its leader, he said.

“So we can’t go against the DRP charter,” he stressed, adding however that the DRP would not oppose a presidential primary if it was stipulated in a law. “But we can’t do it now no matter how much some people might want it.”