State Minister for Environment and Energy Abdul Matheen Mohamed has played down a report that his department yesterday slammed the proposed state budget for neglecting the “fundamental rights” of Maldivians, claiming there had been a “misunderstanding” with local media.
The Sun Online news agency yesterday reported that senior environment ministry officials had raised fears before the Majlis’ National Development Committee that it had been allotted an insufficient budget for proposed water and sewerage projects needed across the country.
Environment Ministry Permanent Secretary Ahmed Saleem was quoted as claiming that some 15 projects proposed by his department had been excluded from the budget is being debated within parliament this week. These projects were said to deal with issues including waste management, as well as supplying water and sewerage systems to more islands around the Maldives.
Saleem was reported as saying that complaints over the matter had also been sent to Finance Minister Abdulla Jihad, who had in turn had responded that any amendments to the budget would have to be made through the Majlis with support of MPs.
Both finance chief Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls from Minivan News at the time of press.
Speaking following yesterday’s meeting with the National Development Committee, Permanent Secretary Matheen claimed that Saleem’s reported comments had been the result of a “misunderstanding” by its author. He alleged that the journalist had focused on a few points of a long meeting with the committee.
While Matheen said that there were some “concerns” about the present status of the budget allocated to the Environment Ministry, he that alleged the article’s conclusions were “very misleading”.
“The budget issue is very sensitive right now, so i’m afraid I cannot make any comments about the matter at present,” he said. “The islands are all asking what they will have from the ministry.”
Matheen added that he was presently unable to comment on the exact nature of the “misunderstanding” contained within the Sun Online report due to the fact discussions on finalising the state budget were ongoing.
Jumhoree Party (JP) MP Hassan Adil, a member of the National Development Committee, was unavailable for comment when contacted on the challenges in trying to balance ministry expenditure in the current economic climate, asking Minivan News to call this evening. However, Adil was not answering calls at the time of press.
Budget discussion
Presenting the budget to parliament last week, Finance Minister Jihad explained that next year’s budget deficit was to be financed with MVR 971 million (US$62 million) as budget support and MVR 1.3 billion (US$84 million) from Treasury bill (T-bill) sales.
However, as debate on the budget commenced yesterday amidst, regularly coming to a halt due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies. these projects included developments such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.
Meanwhile, it was revealed last week that the proposed budget for defence expenditure for 2013 was found to be 14 percent higher than the funds allocated during 2012.
A total of MVR 930.9 million (US$60.3 million) was proposed for defence expenditure, which amounts to 5.5 percent of the total budget.
Balance of payments
With the Majlis currently contemplating the 2013 budget, an International Monetary Fund (IMF) mission to the Maldives last month noted that a ballooning fiscal deficit had “implied a rise in the public debt ratio, which now stands at over 80 percent of GDP.
According to the organisation, these developments also helped to boost national imports, thus worsening dollar shortages in the economy and putting pressure on MMA (Maldives Monetary Authority) reserves.”
The IMF forecast for the current account deficit was “nearly 30 percent of GDP this year.”
“Gross international reserves at the MMA have been declining slowly, [and] now account for just one and a half months of imports, and could be more substantially pressured if major borrowings maturing in the next few months are not rolled over,” the IMF mission warned.
The mission recommended formulating “a realistic and prudent budget for 2013″ to rein in the fiscal deficit, suggesting hiking taxes and “selectively” reversing import duty reductions.
According to an overview of the economy presented by the Finance Ministry along with the state budget (Dhivehi) proposed to parliament last week, the current account deficit in 2012 was expected to be 27 percent of GDP.
Water shortages
Following water shortages that authorities said affected over 100 inhabited islands back in May, Addu City Mayor Abdulla Sodig at the time claimed financial support was the key challenge in ensuring sufficient supplies of drinking water to the public, even with the assistance of local resorts and the Maldives National Defence Force (MNDF).
Minivan News reported back in April that in the country’s southerly Addu Atoll, an estimated 90 percent of the local population were reliant on rainfall to bolster their drinking water supplies.
Numerous islands in the atoll are said to experience severe supply issues for drinking water annually as a result.
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