Some salaries restored, rest to follow in April

The reduced salaries of staff at independent commissions, courts, parliament and the judicial services have been restored while civil servant salaries will follow in April, the government has said.

State Minister for Finance Ahmed Assad said the salaries had been increased in line with the budget approved by parliament and that the salaries of civil servants and staff at other government institutions would follow when the government’s economic condition stabilised.

“The government intends to restore salaries sooner than April if possible,” Assad said, adding that he would have preferred all salaries to be restored at the same time.

Speaking during his weekly radio address, the president said the government’s present situation was “unsustainable” and the Maldives had “the highest wages in the world relative to expenditure over income”.

“Despite criticisms and calls for protests by several people, public servants appreciate the value and importance of public sector reforms undertaken by the government,” he claimed.

“Fiscal adjustments” were necessary, he said, because of the country’s large financial deficit.

“I [therefore] wish to thank all civil servants very much.”

The president’s press secretary Mohamed Zuhair said he expected that the government’s economic condition to improve by April.

He further added that the decision to restore the salaries was “not related” to Thursday night’s protest outside the president’s residence, Muleeage.

Spokesperson for the Civil Service Commission (CSC) Mohamed Fahmy Hassan sounded disappointed and said it was hard for him to trust the president’s words because they differed from the actions of the finance ministry “and the way things have gone.”

“We do not know what to [do] now,” he said, adding that it was unfair for government staff other than civil servants to receive the restored salaries.

”We have been repeatedly begging the finance ministry,” he said. “The president wishes the best for civil servants, but these things are happening without the knowledge of the president.”

Spokesperson for the Civil Servants Association (CSA) Abdulla Waheed said the government was ruling the Maldives “as if there was no law.”

He said that the CSA was planning to hold a protest in front of finance ministry on Tuesday.

Many civil servants were “afraid to come out for protest because they might be fired,” he added.


IMF warns restoring salaries will “jeopardise” international financing

The International Monetary Fund (IMF) has 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,” said Rodrigo Cubero, IMF mission chief for the Maldives.

“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.

State minister for finance Ahmed Assad confirmed that international funding might be at risk if the salaries were restored in the manner demanded by the Civil Servants Commission (CSC).

“The IMF have been saying that for a while,” Assad said, reiterating that the government was not capable of increasing civil servants salaries this month.

Permanent secretaries of various ministries had been submitting two salary sheets, he said, “so we know the difference.”

Spokesperson of the CSC Mohamed Fahmy Hassan said according to Maldivian law, the finance ministry had to pay the increased salary this month.

”For instance, if give you  work to do and say I will pay you 100rf when the work is done, after you complete the work is it fair for me to say, ‘Oh, I cant give you Rf100, I only have Rf50′,” he asked.

In response Assad said the IMF only gave economic advice, and was indifferent to a country’s law.

During talks between the CSC and finance ministry yesterday no agreements were made beyond a decision to continue negotiations.

In its statement, the IMF warned that “the Maldivian economy continues to face serious challenges. In particular, addressing the very large fiscal deficit is of paramount importance to secure a stable economy, equitable growth, and lasting poverty reduction.’

“A larger fiscal deficit would drive up interest rates, deprive the private sector of the credit it needs, and threaten growth and employment. It may also stoke inflation and erode the purchasing power of all Maldivians, including civil servants. It is to avoid such undesirable outcomes that the fiscal deficit needs to be reduced.”