Translated from Dhivehi article by Moosa Latheef
Before writing this column I asked an economic expert, “I was trying to guess what would be cut from my salary, but the government is increasing salaries. Won’t ordinary people think like me?”
He replied that most ordinary people won’t think that way. That’s because Maldivians have never been known to live within their means, and further the government has been hesitant to explain to the people the reality of the economic situation. Because of this, salaries have been increased even though it is not feasible. This has confused the public, he said.
It’s worth recalling that we are today in a very different economic scenario. As Salah Shihab, a tourism and agriculture entrepreneur and a high official in the government of former President Gayoom, has said, no one under 50 years of age would have experienced an economic crisis of this magnitude. This means nobody born after 1959 would have seen such a thing. In fact, the current crisis is perhaps graver than the great depression of the 1930s.
The reality of the current situation is that we can’t afford to increase government salaries by even one rufiyaa. According to economic experts, if salaries are increased it would increase money supply. Maldivian rufiyaa will be chasing the dollar, the expert said. Even now most people say the dollar sells for over Rf. 13.50 in the black market.
It is the practice abroad to go for a deficit budget in times of economic crisis. However, in the Maldives caution is necessary. One must also consider whether the increased salary will have any real benefit. When the dollar sells for a rate higher than the fixed exchange rate, it would increase the prices of goods. In view of this inflation, economic experts are not of the opinion that the increased salary will benefit the overall economy.
The need of the hour is for everybody to accept the reality –everybody including the government and its employees, the traders and their customers. However, even now certain employees like teachers are claiming that they have not got a fair increase in their salaries. They believe this because perhaps they are not aware of the situation. Thus the government must explain the economic status to everyone. Whatever the political challenges, the details of the economy must be revealed. Whether the employees agree or not the government is not in a situation to increase salaries. If such a decision has been taken it is not a wise decision.
This year I will not request my office to increase my salary by even one year. Instead, if I want to see my company survive I must see what could be reduced from my salary. And if I have the guts I must ask them to reduce that much. If one thinks this way, we should not be considering salary increase, but contemplating how we will get in the next one and half years, what we are getting today.
Even while shedding a tear, there is no other choice but to accept the situation. According to the expert who talked to me, it is unlikely that the government will accept this reality before the Majlis elections. But that is the reality.