The Maldives has become financially and economically dependent on foreign parties to an extent that threatens the nation’s independence and sovereignty, President Dr Mohamed Waheed Hassan Manik warned in his address (Dhivehi) to the nation on Republic Day.
Speaking at a function at Dharubaaruge last night, President Waheed said the country has still not recovered from the devastation wrought by the tsunami in December 2004.
“The national debt has soared to levels it has never reached before. In the past four or five years, the country has become financially and economically dependent on foreign parties to an extent that undermines our domestic and economic independence,” he said.
The Maldives “faced challenges to domestic stability” with the post-2004 constitutional changes and democratic reforms, he added.
“During this time, the country’s constitutional framework was destroyed and the state started to function outside of legal bounds,” Dr Waheed said. “And in addition to this, after the events of February 7 this year, some people have created further challenges to the country’s economic development and diplomatic relations.”
Then-Vice President Waheed assumed office on February 7 following the resignation of former President Mohamed Nasheed in the wake of civil unrest and a police mutiny at Republic Square.
The Republic Day marks the abolishment of an 853-year-old monarchy and its replacement by a second republic under President Ibrahim Nasir on November 11, 1968.
President Waheed meanwhile said in his speech that the country was facing a trial “during hard economic times” to increase government revenue, improve services to the public, maintain diplomatic ties and “establish financial and economic freedom.”
These objectives had to be achieved in a “world without domestic walls, within a social fabric where protecting Islamic values and the nation’s independence has weakened,” Dr Waheed said.
In his speech at a ceremony to mark ‘Victory Day’ on November 3, President Waheed claimed that foreign parties were attempting to exert undue influence over the Maldives “in different ways, under different names and capacities, to exercise power over us.”
These foreign parties were “saying that we must turn to their ideologies and sending over waves of secularism [or secular ideologies] to the country,” Dr Waheed had said.
Meanwhile, in his address on Sunday night, President Waheed said sacrifices “such as those of our ancestors” were needed for peace and security and to ensure that “the economy is not destroyed through differences of opinion” and that “the social fabric is not unwoven through political antagonism.”
Important decisions needed to be made for next year’s budget to reduce expenditure and increase government revenue, he added.
President Waheed also announced his intention to convene a “National Conference” as a forum to discuss development strategies.
Ideas and opinions would be sought at the forum to chart a roadmap for development, he said.
Politicians, entrepreneurs, tradesmen, scholars, students, women, youth, judges, lawyers and private parties would be invited to participate in the conference, Waheed said.
In late October, Finance Minister Abdulla Jihad told local media that the Maldives would be unable to pay salaries and meet recurrent expenditure for the rest of the year without a further US$25 million loan from the Indian government.
The US$25 million was agreed upon in September as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.
Jihad told local media that he believed the loan was being delayed due to the ongoing controversy over Indian infrastructure company GMR’s development of the Ibrahim Nasir International Airport (INIA), which is opposed by all parties in the ruling coalition.
Since coming to power, Waheed’s government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to MVR443.7 million (US$28.8 million), to be disbursed in monthly instalments over 12 months from July 2012.
As of November 4, the overall fiscal deficit has already reached over MVR 2 billion (US$129 million). Jihad told the Majlis’ Finance Committee that he expected this figure to rise to MVR 6 billion (US$387million) by year’s end – 28 percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.
Former Minister of Economic Development Mahmood Razee told Minivan News that increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”
A delegation from the International Monetary Fund (IMF) meanwhile urged parliament’s Finance Committee and Economic Committee last week to expedite legislation on fiscal responsibility.