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Maldives national budget is on a collision course with a cash crisis, as warned by International Monetary Fund (IMF). Actually IMF need not have bothered: All the signs of an impending crisis are painfully obvious to all of us.
All major sources of government revenue are ebbing. While a global economic crisis has decimated tourist arrivals, Mother Nature has also not been kind to us in the fisheries sector. Fisheries earnings have come down 54% from $46.1 million to $18.6 million in the first quarter of this year. Tourist arrivals have come down 10% from 266,877 to 239,355.
As a consequence of this, Government revenue has gone down 34% in the first 3 months of this year compared to the corresponding period last year. However the expenditure has been uncontrollably escalating during this period. As a result, the gap between revenue (Rf 1.6 billion) and expenditure (Rf 2.28 billion) has widened to Rf 937 billion.
The crisis is largely due to a series of ill-advised and unrealistic pay hikes. In the search for a solution to this the government is stuck between a rock and hard place. One solution is an across-the-board salary cut of about 30%. The other is a devaluation of the Rufiyaa by the same percent. Politically speaking, both are equally unpalatable.
How did we land in this impasse? Here is the timeline for the genesis of the crisis:
- January 2008: Government employees' salary increased by 16 to 60%.
- February to April 2008: A reckless spree of double and triple promotions to senior government employees adds to the salary burden.
- April 2008: Majlis passes Employment Law, which introduced unaffordable overtime payments.
- May 2008: Salaries of magistrates and judges increased.
- June 2008: Majlis Members decide to hike their own salary, triggering a series of strikes by different sectors for further salary increases.
- September 2008: Majlis endorses a salary hike for independent commissions.
- February 2009: New salary structure implemented, which cost the exchequer an additional one billion rufiyaa for the year.
- March to May 2009: Civil Service introduces a wide range of allowances, adding to the burden of unpaid wages.
13 comments:
Should you in good conscience not list the wages/salaries of the increasing number of political appointees (state ministers and especially the atoll and island councillors) as having contributed to this..
There is still a lot of wastful expendture on corrupt contracts. this must be cut.
Many offices have not paid overtime to thier employees. They also don't have money to pay salary for coming months. on top of that finance ministry is cutting budgets further. the buget is already in chaos.
Nothing to worry. Goverment will recover 1 billion from corrupt former government officials. We will also get money from our frinds abroad. The utility companies will start making profits soon. So this is the time to increase salaries to boost economy.
So no hope of fulffilling the 5 promises. Boan ulhunu bondi thi thibee bovifa. then lalala
offices are still spending money like hell. they don't seem to think anything has happened. nobody cares. all newly appointed officials are busy buying brand new aircons and laptops. there is no control.
Why is the 'Time Bomb' General not issuing a report on the budget situation? He did it last year when maumoon was ruling. We know Auditor general will keep quiet this time. we also know why.
Radical solution.
Anni and the Government take a 30 day no pay holiday. Only, hospital,airport,seaport and other very essential services will remain open.
When they come back from holiday,working hours should be reduced to six hours and no overtime.Fresh water(desalinated) should be cut off from mosques,government offices.
Airconditioners should not be used in Government Offices for atleast 3 months.
Use as much as possible , natural sunlight and good ventilation.
Severely Limit the number of Hajj piligrims. this year to save foreign currency.
Privitize all mosques. Islamic Ministry should be abolished altogether.
IOntroduce legislation limiting how much dollars can be taken out of the country, while on holida and to foreing banks. etc. etc
any other ideas, folks?
Abolish all the Independent commissions and revert to the old way. you can save loads of money.
Muleeaage BIG kitchen should be abolished. Instead a small kitchen where First Lady will cook should be allowed. President can be given a food allowance. He can get food delivered from restaurants. Much cheaper and more delicious.
Anni should eat at Sifainge with the officers.
What about the unnecessarily high number of political appointees and their excessive salaries under the current administration. You have to balance your articles. Former regime initiated the economic mess, but the current administration is not putting a significant effort to reverse the situation either. Instead, it seems that, they are continuing Maumoon's legacy. This is ridiculous!
You dont have a balanced view on this matter.Talk straight on the face, your favourite president has told to criticise him too, so talk about all the extra political appintees,wasteful trips abroad,
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