MP Riyaz Rasheed threatens to sue Finance Minister, Attorney General over state benefits to former President Nasheed

Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed threatened to sue Finance Abdulla Jihad and Attorney General Azima Shukoor at parliament today for providing state benefits to former President Mohamed Nasheed under the Privileges and Protection for former President’s Act of 2009.

Riyaz’s remarks came during introduction of a bill the MP for Thaa Atoll Vilufushi has submitted to bring amendments to the 2009 law, specifying circumstances where the financial benefits could be denied to ex-Presidents.

Riyaz contended that former President Nasheed was not eligible for financial benefits under the law as he had not completed a full five-year term.

While the government had initially questioned Nasheed’s eligibility, the Finance Ministry began providing the financial benefits to the former President in May 2012.

“Even though the Finance Minister is doing it [releasing the funds] based on legal advice from the Attorney General, they have to answer for this,” Riyaz said today. “There will come a day when these two will face a lawsuit over this. We are waiting for the day when this government ends. We will sue the Attorney General and Finance Minister on that day.”

He however added that it was “not easy to proceed with this now” as the DQP was part of the ruling coalition.

Riyaz’s amendments meanwhile state that ex-Presidents would not be eligible for state benefits if they committed or participated in an unlawful act or encouraged such an act.

Moreover, former Presidents would be deprived of all privileges and protection if they commit or encourage an act that threatens the country’s independence; commit an act that leads to the loss of Maldivian territory; commit or encourage an act of terrorism, join a terrorist organisation or call for others to join such a group; and commit, encourage or call for “an act that could pulverize the country’s economy”.

If a former president is convicted of corruption, embezzlement or misappropriation of public funds during his or her tenure, Riyaz’s amendments state that he or she would be deprived of state benefits for a period of 10 years.

If the amount embezzled or misappropriated exceeds MVR 10,000 (US$650) the amendment proposes extending the period by one month for each additional MVR 1,000 (US$65).

In addition, if a former president is convicted of a criminal offence committed while in office, state benefits would be discontinued for a period of 10 years.

If a former president is convicted of a criminal offence committed after leaving office, he or she would be deprived of state benefits for five years.

During today’s debate, MPs of the formerly ruling Maldivian Democratic Party (MDP) claimed that the purpose of Riyaz’s amendments was to terminate state benefits to former President Nasheed, accusing him of personally targeting the MDP presidential candidate.

Government-aligned Jumhooree Party (JP) MP Alhan Fahmy – former vice president of MDP before defecting to the JP – agreed with his former colleagues that the bill was “politically motivated” and submitted “out of personal animosity.”

Progressive Party of Maldives (PPM) MP Ilham Ahmed however supported the amendments and suggested that Nasheed should not receive state benefits based on the former President’s disrespect of courts, alleged sale of national assets and call for a tourism boycott.

Meanwhile, the office of former President Nasheed last week accused the government of “negligence” in providing the legally mandated monthly allowance to cover expenses of the office.

In a press release on Thursday, the former president’s office noted that article 8 of the Privileges and Protection for Former President’s Act (Dhivehi) states, “In the event that a former president wishes to conduct social work beneficial to the community, the state shall provide up to MVR175,000 (US$11,350) a month to arrange for an office, employees and other matters.”

Article 128 of the constitution states that a former president “serving his term of office lawfully without committing any offence, shall be entitled to the highest honour dignity, protection, financial privileges and other privileges entitled to a person who has served in the highest office of the land.”


Government withholding allowance, claims office of former President

The office of former President Mohamed Nasheed has accused the government of “negligence” in providing the legally-mandated monthly allowance to cover expenses of the former’s president’s office.

In a press release on Thursday, the former president’s office noted that article 8 of the Privileges and Protection for Former President’s Act (Dhivehi) states, “In the event that a former president wishes to conduct social work beneficial to the community, the state shall provide up to MVR175,000 (US$11,350) a month to arrange for an office, employees and other matters.”

The social work to be carried out by the former president’s office included “efforts to develop and strengthen democracy,” the press release explained.

Article 128 of the constitution states that a former president “serving his term of office lawfully without committing any offence, shall be entitled to the highest honour dignity, protection, financial privileges and other privileges entitled to a person who has served in the highest office of the land.”

The Privileges and Protection for former Presidents Act of 2009 was the first piece of legislation passed by the 17th parliament elected in May 2009.

The press release meanwhile revealed that the government first provided the state benefits due to the former president by law “four months after he left office” when a letter was sent to the Finance Ministry on April 30.

However, the financial benefits were discontinued four months later in August 2012.

Officials of various rank at the Finance Ministry as well as Finance Minister Abdulla Jihad were approached “repeatedly” regarding the benefits and all requested information was provided in a letter on August 27, 2012.

While Finance Minister Jihad had said that the ministry would send a letter seeking further information concerning the work of the former president’s office, the press release noted that the said letter had not been sent as of November.

On Jihad’s claim to local media that he was unaware of the location of the office and had sent a letter seeking clarification, the press release stated that “the minister should believe that a letter sent to an office whose address he did not know would not be delivered.”

“We note that this office has not been informed of the reasons for the sudden discontinuation of the benefits previously provided,” the former president’s office said, adding that a “verbal explanation” by ministry officials that the benefits were discontinued on orders from the Finance Committee of parliament was refuted by the committee.

While the amounts to be paid as benefits were specified in the law, the press release alleged that the Finance Ministry had not deposited the full amounts.

The law stipulates a monthly allowance of MVR 50,000 (US$3,243) for a president who has served one term.

The former president’s office expressed concern with the ministry’s failure to adhere to the law and called on the government to “respect the laws” and ensure “administrative fairness” by the state.

In October, local media gave conflicting statements regarding the reasons for the withholding of Nasheed’s office allowance.

Sun Online reported Jihad as saying that the issue was related to the unknown location of Nasheed’s office whereas Haveeru said that the suspension of privileges was related to a disagreement over whether former presidents were required to conduct charitable activities.

“In reality, the office should be involved in holding social activities. However, the concern of these members is that there is no social work to be seen by the (Nasheed’s) office,” Jihad was quoted by Haveeru.

“It has to be clarified. Hence the financial allowances have been halted for the time being. We still haven’t been provided with the information we sought in relation to the office,” Jihad told the paper.

Meanwhile, in March, the government had questioned Nasheed’s eligibility for state benefits on the grounds that he had not completed a full five-year term in office.

In June, Maldivian Democratic Party (MDP) MP Ahmed Hamza revealed that the state had spent MVR 1.3 million (US$84,300) on healthcare costs for former President Maumoon Abdul Gayoom and his wife from 2010 to April 2012.


Finance Minister to be summoned to committee

Parliament’s Finance Committee decided on Wednesday to summon Finance Minister Abdulla Jihad to the committee before the annual state budget for 2013 is submitted to parliament.

Local daily Haveeru reported last week that members of the public accounts oversight committee decided that the minister should be questioned over MVR 31 million (US$2 million) withheld from the Male’ Health Corporation (MHC), which was reportedly allocated to pay electricity bills for the Indira Gandhi Memorial Hospital (IGMH).

The committee did not however set a date for summoning the minister.

At a meeting of the Government Oversight Committee on Tuesday night, state institutions with overdue electricity bills blamed the Finance Ministry for withholding funds.

The health corporation had the largest unpaid electricity bill with MVR 31 million (US$2 million) owed to the State Electricity Company (STELCO).

STELCO officials informed the Government Oversight Committee that various state institutions owed the government company a total of MVR 174 million (US$11.3 million) in unpaid electricity bills.

Auditor General Niyaz Ibrahim meanwhile told Sun Online last week that the annual budget was submitted to parliament with only three weeks to assess the planned expenditure, which was not enough time to seek expert advise for a comprehensive assessment.

“We believe that the budget should be presented to parliament latest during the first week of October,” Niyaz was quoted as saying.

Niyaz suggesting that passing the budget before the end of December resulted in problems with executing the budget items.

Niyaz also insisted that government projects should only be financed by government revenue.

“The law states that expenses can only be made if they are included in the budget. Anyone who releases funds otherwise, is committing a crime. Legal action should be taken against them. The government will not be responsible for that. It is the person’s fault,” he said.

Niyaz went on to say that he did not agree with the government obtaining loans to pay civil servants’ salaries.

“Loans should be obtained for capital expenses. These problems can only be solved by reducing recurring expenses,” the Auditor General was quoted as saying.


Finance Minister estimates budget deficit will reach MVR6billion

Minister of Finance and Treasury Abdulla Jihad has told parliament’s Finance Committee that this year’s budget deficit can be expected to be double the original estimate of MVR3billion (US$195million), reported Haveeru.

Jihad is said to have explained that the bulk of  the deficit came from unpaid bills left over by the previous government, amounting to MVR2billion (US$130million).

During the committee’s meeting, which continues regardless of the status of the Majlis (currently suspended), Jihad also said that an additional MVR800million (US$52million) had been paid out from this year’s budget.

He said that this year’s revenue is expected to be MVR11.5billion (US$746million), whilst total expenditure is MVR14.6billion (US$948million).

Meanwhile, he reported that state spending this year, MVR9billion (US$590 million), had outstripped earnings by 28percent.

These figures represent an improvement on the Finance Committee’s earlier estimates which, in May, had anticipated a deficit of MVR9.1billion (US$590 million) after meeting with Jihad.

The committee is also reported to have given the go ahead to take out a further US$25million loan from India.


“Time for everyone to tighten their belts”: Finance Minister Jihad

Minister of Finance and Treasury Abdulla Jihad has said the state must brace to enact austerity measures in the long-term if authorities are to address the country’s fiscal deficit – with further budget cuts anticipated in all government departments over the next 12 months.

Jihad has told Minivan News that previous commitments by government institutions to cut their budgets by 15 percent would need to be followed by further reductions to state and civil service spending in next year’s budget, regardless of financial assistance secured from China and India.

The minister’s comments were made as Parliament’s Finance Committee – reconvening for the first time since July – agreed this week to provide an additional MVR 12 million (US$780,000) in budget to the Auditor General’s (AG’s) Office, according to local media.

Auditor General Niyaz Ibrahim said that under the existing state budget, an agreement was reached that an additional MVR 58.8 million (US$3.8 million) would be provided to the AG’s Office, though it was decided to request a smaller proportion of these funds, the Sun Online news service reported.

People’s Aliance (PA) party MP and Finance Committee Chair Ahmed Nazim was not responding to calls from Minivan News at the time of press.

However, Jihad claimed that the decision to provide the extended budget was a “concern” considering the state was not getting enough direct revenue at present to justify its spending.

“We need to be fair when it comes to the budget, everyone should have to follow the same rules,” he claimed. “Otherwise this would mean that I could only reduce the budget of the Finance Ministry in future. It is time that everyone should tighten their belts.”

According to Jihad, provisions for the extension of funds to the AG’s Office had been included in the state budget, but he claimed that the country needed to work together in reducing state spending where possible.

Regarding claims that further cuts to the state budget wuld be required during the next 12 months, Chairman of the Civil Service Commission (CSC) Mohamed Fahmy Hassan said that it had “managed” with the 15 percent cuts already made to its expenditure.

Fahmy added 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 MVR9.1billion (US$590 million), equivalent to around 28 percent of nominal GDP.

Financial assistance

In the last few months, authorities in India and China had both pledged to provide financing to the Maldives. Finance Minister Jihad said that of these funds, US$25 million being provided by India would be put into “budget support” to try and address state spending. A large amount of the funding meanwhile from China, which would total US$500 million, was expected to be put towards development projects such as housing construction, the Finance Ministry added.

The Indian government had announced that it would be granting the Maldives an additional as part of the US$100 million standby credit facility agreed last year under the previous government.

China has also pledged funding to the government of President Dr Mohamed Waheed Hassan following an official state visit to the country.

The loans, equal to nearly one quarter of the Maldives’ GDP, are said to include $150 million (MVR2.3billion) for housing and infrastructure, with another $350million (MVR5.4billion) from the Export-Import Bank of China, reported Reuters.

Jihad has maintained that the state still needs to reassess where further spending cuts can be made going forward.

Just last month, the Finance Ministry forwarded proposals it claimed would cut MVR2.2billion (US$143million) form the national budget.

The austerity measures include raising Tourism Goods and Services Tax (TGST) to 15 percent,  terminating electricity subsidies in Male’, increasing import duties on alcohol and imposing a 3 percent  duty on oil, “reforming” the Aasandha health insurance scheme, and reducing the budget of every Ministry and independent institution by 15 percent – among other measures.

The original budget for 2012 envisioned that revenue would rise to MVR11.4billion (US$740million) with expenditure anticipated to be MVR14.5 billion (US$941million). This would have resulted in a budget deficit of around MVR3billion (US$194million), representing 10 percent of GDP.

However, several resort managers voiced concern at the time that the proposed revenue amendments would serve only to  affect the financial viability of the country’s tourism industry, while providing little improvement in service or support in return.


Ruling coalition to reverse own restrictions on sale and lease of state property

The government is seeking to reverse restrictions concerning the sale and lease of state properties, that the ruling coalition parties themselves passed while in opposition.

Finance Minister Abdulla Jihad said the government requested parliament amend the Public Finance Act to remove the requirement for parliamentary approval for the sale or lease of any government property.

The controversial amendments to the Act, passed in June 2010 prior to the airport being award to Indian infrastructure giant GMR, sparked the resignation of then-President Mohamed Nasheed’s cabinet over the opposition-majority parliament’s “scorched earth politics”.

Jihad told local media that the request to amend the Act was made as government faced “difficulties” leasing and selling its property, including land, buildings, and infrastructure, as the law currently demanded that such transactions could only proceed after parliament approval.

Speaking to Minivan News, Jihad said he sent the request to parliament’s public finance committee, and that the government would propose the bill to the parliament floor as soon as parliament sessions reconvened.

“We will send the bill as a high priority bill to the parliament as soon as parliament reconvenes. This is a very important bill for the government,” he said.

He also added that it although the government did have an MP representing President Mohamed Waheed Hassan’s party – to present legislation on behalf of the  government – this was not required as the matter was “not a revenue bill”.


The amendment concerning the requirement for a prior parliamentary approval was brought to the act on June 2010, by then opposition-controlled parliament.

The amendments were brought to article seven of the Public Finance Act: “any relief, benefit or subsidy by the state” must be given in accordance with laws passed by the parliament.”

The amendment to article 10(a) reads that financial benefits provided by the government in order to pursue its policies must also be issued in line with laws passed by parliament.

However, article 10(c) of the amendment bill states that the government could grant “some financial assistance” from the emergency funds allocated in the state budget under certain circumstances, such as to provide relief after natural disasters.

Meanwhile, 10(d) states that assistance could still be given “if the government believes providing financial assistance to a businessman or a business facing financial difficulties was in the public interest” or if the financial difficulty is believed to impact “the lives of a sufficiently large number of people in society”.

Moreover, article 34(c) stipulates that the government must implement recommendations of the parliamentary committee that reviews the state budget.

The Maldivian Democratic Party (MDP), the ruling party at the time, blasted the opposition claiming that the bill was passed to “obstruct the public private partnership policy of the government.”

Several MDP MPs expressed concern over the move, alleging that the opposition wanted to hinder the running of the government.

Among the concerned parliamentarians, MP Mohamed ‘Colonel’ Nasheed at the time said he regretted the bill had been passed and that he was “very concerned” over its approval.

”All the services the MDP has planned to provide for the people will be disrupted according to this bill,” said Nasheed.

”Right now there is a hung parliament and it is very difficult to bring out sufficient results from it.”

Nasheed said that responsibility for the country’s financial condition was the duty of the President and the Finance Ministry, according to the constitution.

”The bill was not approved in the best interests of the country,” he added. ”I regret the approved amendments [governing privatisation].”

MDP Spokesperson at the time, Ahmed Haleem, also echoed similar concerns claiming the bill was approved “according to the self-interest of two or three businessmen in parliament.”

”This bill will obstruct the public and private partnership policy of the government,” said Haleem. “It was not passed for the benefit of the people of the country.”

However, then main opposition Dhivehi Rayyithunge Party (DRP) dismissed the claims made by MDP.

DRP MP Abdulla Mausoom said at the time that the government was required to govern the country “according to the wishes of its people.”

”The parliament represents the people,” Mausoom said, “and according to the bill, the government will now need the approval of the parliament when leasing state assets or taking loans from other countries.”

Mausoom said the parliament “belongs to the people” and would only make decisions “for the benefit of the people.”

“I do not see any article in the bill that disrupts the government’s pledges,” he said. “Privatising Male’ International Airport was not a pledge of the government.”