Page added on October 30, 2012
The government has said it is “not aware” of a Civil Service Commission (CSC) request to cease recruiting for any position higher than the role of assistant director until 2013, despite reports in local media to the contrary.
President’s Office Media Secretary Masood Imad said he had not been made aware of any requests to amend government recruitment practice and would need to clarify the matter, and referred Minivan News to the CSC.
Minivan News was awaiting confirmation at time of press both from Masood and CSC President Mohamed Fahmy Hassan over whether an official request had been made to curb government offices hiring senior civil servants.
However, local media, citing an an named government source, speculated that the reported CSC request was linked to “financial difficulties” currently facing the state.
The government official told the Sun Online news service that despite the need for new employees within the Finance Ministry, the recruitment process for such roles had been halted in line with the CSC’s request.
Earlier this week, Minister of Finance and Treasury Abdulla Jihad claimed the government was currently unprepared to meet its recurrent expenditure – including salaries – for the final three months of 2012 without a US$25 million loan promised by the Indian government.
While unable to confirm if the reported CSC request was linked to Finance Ministry fears over insufficient funding for state wages, key economic figures within the government of President Dr Mohamed Waheed Hassan have maintained that more drastic budget cuts are required to balance expenditure.
Despite government commitments to cut departmental budgets by 15 percent in 2012, Jihad told Minivan News last month that even with financial assistance promised from China and India, further cuts would need to be made to state salaries over the next year to deal with deficit concerns.
Jihad and Economic Development Minister Mohamed Ahmed were not responding to calls at the time of press.
CSC President Fahmy said in September 2012 that as no request had so far been made by the government to reduce the size and budget of civil society organisations, it did not have concerns about potential job cuts.
“Our mandate is to provide human resources to the government. As long as there is no effect on the salaries or number of civil servants, we will not seek to intervene in the policy of government,” he said.
With state income lower and expenditure higher than predicted, this year’s budget deficit had been forecast to reach MVR6billion (US$389 million), equivalent to around 28 percent of real GDP.
Despite this deficit, President Waheed has been campaigning this week in Faafu and Dhaalu Atolls, reportedly to reassure the public that the economy was running smoothly, whilst criticising those who he claimed sought to weaken it.
Waheed is also reported as having said that he would not resort to borrowing from foreign governments in order to finance government activities.
“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn”, he was reported to have told the people of Nilandhoo.
“The Maldivian economy is fine. Don’t listen to whatever people say. We don’t have to [worry] about the Maldivian economy being in a slump,” he was quoted as saying during a rally in Meedhoo.
US$25 million in funding from India was agreed upon last month as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.
However, despite president Waheed’s reassurances, a number of state owned institutions have this month faced disconnection from the capital’s power grid as bills amounting to around MVR 150million (US$9.7million) were said to be owed to the State Electricity Company (STELCO).
Responding to blaming of his ministry, Jihad told Sun that the finances were simply not there, pointing to the adoption of spending policies of the previous administration.
“We are not receiving foreign aid as was included in the budget. How can we spend more than we receive? That’s why those bills are unpaid. We can’t spend money we don’t have,” he told the paper.
Former Minister of Economic Development Mahmood Razee has previously told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”
“If they don’t get the loan, they will have to cut travel expenses, stop certain programs – take drastic measures or get another loan,” said Razee, claiming that the only alternative would be to sell treasury bills.
Following reports in August that the government was attempting to raise funds through the sale of treasury bills, former Finance Minister Ahmed Inaz said that this would not address the concerns of the IMF, prolonging economic uncertainty.
China has also made large commitments towards the Maldives’ economic development in recent months, although Razee said he believed that current changes within the Chinese government in the upcoming month made this an inopportune time to look there for additional financial aid.
In August, the current Finance Ministry announced its own austerity measures intended to wipe over MVR2.2billion (US$143 million) from this year’s budget deficit though few of these propositions have as yet been followed through.