Finance Committee begins reviewing salaries of independent institutions, judges, MPs

Parliament’s Finance Committee Chair Abdulla Jabir has said that the parliamentary select committee has begun reviewing the wages and salaries of members of independent institutions, judges and members of the parliament.

During a committee meeting held last Wednesday evening, Committee Chair Jabir stated that it was responsibility of the Finance Committee to review wages and salaries annually. He added that the new initiative by the committee was part of the cooperation extended to the new government of President Abdulla Yameen Abdul Gayoom who has promised to a cost reduction policy.

Article 102 of the constitution states, “The President, Vice President, members of the Cabinet, members of the People’s Majlis, including the Speaker and Deputy Speaker, members of the judiciary, and members of the Independent Commissions and Independent Offices shall be paid such salary and allowances as determined by the [Parliament]”

The task of determining salaries and allowances is entrusted to the Finance Committee under section 100(a) of the parliamentary rules of procedures.

President Yameen previously announced publicly that he would voluntarily be taking a fifty-percent pay cut, a promise which he made during the campaign for presidency. The president also at the time promised to slash the wages of political appointees by 30-50 percent, should he be elected in September.

Furthermore he at the time also pledged to cut the salaries of independent institutions claiming that it was a pivotal step for the country to avoid a sovereign default.

Two propositions were made to the Finance Committee which includes a proposition by interim Dhivehi Rayyithunge Party (DRP) Leader Mohamed ‘Colonel’ Nasheed’s proposition to reduce the wages of a parliament member to MVR 20,000 (US$1300).

The second proposition was put forth by the opposition Maldivian Democratic Party (MDP) MP Ilyas Labeeb who suggested that the committee to collectively bring down the wages of all state institutions including the parliament, the judiciary, the executive and Independent Institutions.

Neither of the propositions was put for a vote during Thursday evening’s Finance Committee meeting.

MP’s Remarks

Speaking during Thursday evening’s committee meeting, Judicial Service Commission (JSC) member and MDP MP Ahmed Hamza suggested the wages of judges and magistrates be brought down before doing the same for members of independent institutions and the parliament.

“President Yameen himself has taken a pay-cut. Right now we must all follow that example shown by him. Else, we would not be able bring down the recurrent costs [in the national budget],” the Biledhdhoo MP told the committee.

The ruling Progressive Party of Maldives (PPM) MP Ahmed ‘Redwave’ Saleem also spoke in support of the committee’s initiative but disagreed with the idea of cutting down salaries of specific institutions such as judges and the judiciary with the intent to undermine such an institution.

MP Saleem argued that should the committee wish to bring down the wages of state institutions, then it must be done with thorough research and without discriminating against specific institutions.

“Such efforts must be sincere. This should not be done with the motive to reduce the pay for the judiciary or any specific institution,” MP Saleem told the committee.

However, opposition MP Abdul Ghafoor ‘Gabey’ Moosa openly disagreed to the idea of pay cuts citing that it could lead to more educated Maldivians taking up employment abroad. He added that based on the current inflation rates, it cannot simply be said that the current wages of state institutions are too high.

Deputy Speaker of Parliament – who is also a member of the committee – also spoke in a similar fashion where he criticised the proposition to bring down the wages of just parliament members, members of the independent institutions and the judges.

He also argued that due to how certain laws have been framed, it was not possible for parliament to bring down wages of some positions. Although the committee must move forward with the pay-cut initiative, the Deputy Speaker stressed that the committee needed to identify the positions which it intends to bring down the wages of.

“We ought to thoroughly research and foresee the outcomes of our decision to bring down the wages of state institutions. We need to assess what changes need to be brought in order to do such a thing,” the Deputy Speaker noted.

Wednesday evening’s committee meeting was forced to conclude after Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed arrived in the meeting room and begun disrupting it, taking points of order in which he complained to the Committee Chair for not informing him of the meeting.

Things became heated when Committee Chair MP Abdulla Jabir decided to call off the session without giving attention to the complaints by MP Riyaz Rasheed. Verbal abuses and physical confrontations ensued between Riyaz Rasheed and Jabir.

The committee meeting concluded with the Committee Chair MP Jabir announcing that it will reconvene in three days time after collecting necessary documents and information regarding the work. The committee also agreed to commit two hours of its time to the matter.

Previous efforts

Last December, Parliament passed revisions to the pay scheme approved by the Finance Committee for senior officials in the executive, judiciary and independent institutions.

The revisions included a MVR 5,000 (US$324) pay raise for board members of the Maldives Inland Revenue Authority (MIRA). MIRA board members now receive monthly pay of MVR 15,500 (US$1,005).

Among other  changes brought at the time by the committee to the pay structure originally passed on December 28, 2010 was a monthly phone allowance of MVR 1,000 (US$65) for MPs, ministers, judges of the High Court and Supreme Court, members of independent commissions, the Prosecutor General, the Attorney General and the Governor of the Maldives Monetary Authority.

According the revisions, should the phone bills exceed MVR 1000, the officials were allowed to claim compensation for the cost of phone calls made for official purposes.

The Finance Committee at the time also decided to discontinue monthly salaries for drivers of cabinet minister’s cars (MVR 7,500) as well as an allowance for petrol cost (MVR 1,000). Ministers were instructed to settle the expenses out of their salaries from April 2013 onwards. However, the committee did not terminate similar expenses for other officials provided state cars.

The revisions also saw increment of the health insurance premium given for judges and their parents from MVR 4,500 (US$292) to MVR 7,000 (US$454).

Despite the calls, the committee at the time also decided against making any changes to the remuneration of parliament members.

The revised pay scheme was passed with 38 votes in favor, two against and five abstentions.


The Maldives has one of the highest percentages of government employees to population of any country in the world, at around 11 percent.

Salaries and allowances have also rocketed up, unmatched by government revenue. Much of this growth occurred in the two years leading up to the 2008 election and the introduction of multi-party democracy.

An internal World Bank report leaked in 2010 showed that increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

With the introduction of the new constitution and its requirement for an assortment of independent institutions to oversee various aspects of government, the share of the wage bill to revenue soared to “an astronomical 89 percent.”

The President of the Maldives receives a base salary of MVR100,000 (US$6500) per month. During his government’s attempts to reduce civil servant spending on the urging of the International Monetary Fund (IMF), former President Mohamed Nasheed took a voluntary pay cut of 20 percent.

Despite this, the government’s attempt to impose austerity measures was blocked by the Civil Services Commission, leading to a series of scuffles between the Finance Ministry and the CSC.

The opposition at the time, now in power following Nasheed’s controversial resignation in 2012, contested Nasheed’s expenditure on 244 political appointees – a figure partly the result of the government’s early efforts to consolidate state employees under government-owned companies outside the purview of the CSC.

Figures released by the Ministry of Finance and Treasury showed that these 244 appointees were being paid MVR 99 million (US$6.4 million) a year, however Nasheed’s administration contested that this constituted just two percent of the state’s 2011 wage bill, comparing it to the 39 percent that went to the civil service, 24 percent to uniformed bodies, 17 percent to local councils, 10 percent to independent institutions, 5 percent to the judiciary, and 2 percent to parliament.

In comparison, Nasheed’s successor former President Mohamed Waheed Hassan’s government during 2012 spent MVR 60 million (US$3.9 million) on 136 appointees, according to figures procured by Sun Online.

At the time, the monthly spend included 19 Minister-level posts at MVR 57,500 (US$3730), 42 State Ministers (MVR 40,000-45,000, US$2600-2900), 58 Deputy Ministers (MVR 35,000, US$2250), five Deputy Under-Secretaries (MVR 30,000, US$1950) and 10 advisors to ministers (MVR 25,000, US$1620).

Overall public expenditure in 2012 increased 12 percent on the previous year.  This was in large part due to measures such as the intensified recruitment and promotion of a third of the police force, and repayment of civil servant salaries cut during the Nasheed era.

The Maldives Monetary Authority (MMA) noted that while total expenditure for the year was three percent lower than 2011, this was only due to the government’s failure to pay a large number of bills. Total public debt at the end of 2012 was 72 percent on GDP, the MMA stated.

Meanwhile, the government’s wage bill was in May projected to increase by 37 percent in 2013 as a result of hiring more employees, notably 864 new staff for the police and military – an increase of almost 20 percent.

In its professional opinion on the budget submitted to parliament, the Auditor General’s Office also observed that compared to 2012, the number of state employees was set to rise from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.


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”.


EC requests finance ministry to reconsider pay cuts

The Elections Commission (EC) has sent a letter to the finance ministry in protest against pay cuts for their employees, arguing their salaries are already lower than staff in other independent institutions.

EC Vice President Ahmed Fayaz Hassan told Minivan News that there was “widespread dissatisfaction” among staff at the commission.

“While a labourer in the Elections Commission would get Rf4,000 to 5,000 (US$300 to US$400) a month, someone in the same job at the Human Rights Commission would get Rf10,000 (US$800),” said Fayaz. “There’s a huge difference in salaries.”

He added that the interim EC had requested the finance ministry raise the salaries of their staff earlier this year.

In August, the government announced it planned to undertake a series of austerity measures to offset the yawning budget deficit, including pay cuts for civil servants of up to 20 per cent.

Fayaz said that while the pay cuts were reasonable in principle, the EC’s 52 employees were “unhappy” because “they know staff in other commissions get better pay than them.”

He said employees expressed this grievance at a meeting on the new commission’s first day in office but added he did not think any would leave their jobs given the country’s economic climate.

Speaking to MInivan News today, Ismail Shafeeq, permanent secretary at the finance ministry, said it was up to independent institutions to decide upon the salaries of their employees.

“We have nothing to do with that. We have no control over them,” he said, adding he did not think the EC would increase salaries considering the economic difficulties being faced by the country.

But, said Shafeeq, the finance ministry had informed all independent institutions of pay cuts between 10 and 20 per cent effective this
month for all civil servants, which would be up for review at the end of the month.

In October, Ahmed Assad, state minister of finance, said independent institutions were “making excuses” to avoid lowering salaries and
allowances of employees.

His remarks came after independent institutions argued they were not legally obliged to cut their employees’ salaries.


CSC asks govt to restore civil servants’ salaries

The civil service commission (CSC) has sent a letter to parliament requesting civil servants’ wages be restored to their former levels as the proposed mid-term 2010 budget anticipates a revenue of more than Rf7 billion (US$544 million).

CSC Spokesperson Mohamed Fahmy Hassan said a similar letter was also sent to President Mohamed Nasheed, reminding him of his remarks in October.

In his weekly radio address, Nasheed said civil servants’ pay cuts were a temporary measure and would be restored once the economy recovered and the government had increased its revenue beyond Rf7billion (US$544 million).

“The president’s message was very clear. In this case where so many are involved and it’s a promise that he made…I am very sure that in January they will be given their full salaries,” said Fahmy.

Ismail Shafeeq, permanent secretary of the finance ministry, said that according to the law, the finance ministry has to review the pay cuts every three months with the next evaluation coming at the end of the month.

Projected Revenue

Addressing MPs last week, Finance Minister Ali Hashim said the projected revenue for 2010 was Rf7.3 million (US$568 million).

Measures to increase government revenue, including the introduction of new taxes such as corporate tax and a goods and services tax to be imposed on tourist resorts, are still awaiting the passage of legislation in parliament.

Speaking to Minivan News today, Mohamed Zuhair, president’s office press secretary, said civil servants’ salaries would only be restored
when the government’s revenue “physically” reached Rf7 billion (US$544 million).

“If we reach it by September then September we will do it,” said Zuhair.

Acknowledging that the government may not reach its expected revenue, Fahmy said civil servants’ salaries should only be reduced if the government fails to attain its target.

In August, the government unveiled a raft of austerity package to help ease the budget deficit. Measures included pay cuts of up to 20 per cent for civil servants, a reduction in overtime as well as cutback on foreign travel.

The pay cuts have sparked outcry and several protests among civil servants and opposition groups who have accused the government of economic mismanagement.

“We will hold another demonstration on 10 December outside the finance ministry to back up the commission,” said Abdullah Mohamed, spokesperson for the civil servants’ association.

“We believe this damage was done to civil servants as a punishment and if there really were special economic circumstances, members of parliament and independent institutions too should have taken a pay cut,” he added.

Last month, an informal meeting of MPs on pay cuts ended in a heated argument after opposing parties accused each other’s government of mishandling the finances. All MPs Minivan News spoke to said they would be willing to take a salary reduction.

Pay cuts for independent institutions came into effect this month.


In their letter, the commission also noted that civil servants asked to work overtime should be paid accordingly.

“If and where and when they are asked to do overtime, they are entitled to be paid overtime under the employment law,” said Fahmy.

He added that the CSC had received “lots of complaints” from civil servants who had been asked to work overtime but had not been paid.

“The work should be organised in such a way so that nobody should do overtime. In very specific cases where it’s needed to complete a
crucial task then that person has to be paid,” he said.

Zuhair said the government’s policy was that overtime should not exceed 15 per cent of the total hours worked and that all staff
working overtime should be paid.

If this was not the case, he continued, civil servants “should just refuse to work overtime.”