Since the Presidential elections of 2013, our country’s situation is just going backwards. From a new wave of democracy, we are going back to dictatorship. But one thing which Maldives has never witnessed until now was the economic crises. And the PPM Government took it upon themselves to make us feel like living in a bankrupt nation which is otherwise known as the paradise of the world.
Financial situation of Maldives has deteriorated under Yameen’s Government so badly that Housing Minister had to announce sale of 19 prime plots in Male at cost of Mnimum MVR 15,000/- per Square feet to organize funding for salary payment of government employees. The salary of the staff of the government was paid with difficulty for the month of July 2017. Till the last date of submission of bids for the plots, there was no application received for purchase of any of the plots.
In June 2017, The government had borrowed MVR800 million from the Bank of Maldives to settle unpaid bills and salary of government employees . The finance ministry told the parliament’s public accounts committee that the government owed MVR627 million to various parties at the end of 2016 along with MVR377 million owed as of March 8, 2017. The loan was unforeseen in the 2017 budget and obtained despite record levels of tax revenue.>
The Maldives Inland Revenue Authority collected a record MVR2.2 billion (US$142 million) in January. Some MVR6.8 billion (US$446 million) of a projected MVR14.1 billion (US$914 million) in tax revenue for 2017 has been collected as of May. This means that we all paid our taxes well on time. But unfortunately, they weren’t enough for the Govt. to pay the salaries or use them for any other development. In Maldives, even the Mosques are sponsored by Foreigners!
Taxes are incurred from people in the name of development and still, the present Yameen Government looks up to China for even building a road. 91.4% of structural development projects in Maldives are being built through taking loans from China. And Saudi Arabia is giving loan or sponsoring mosques or military in our country! Why??? And if the economic structure of our country was so weak then how didn’t we need such huge amounts of loans before 2013? Nowadays Pres. Yameen is taking loans for even repairing his own chair! Who will be paying for all this?
Finance Ministry is mandated by the public finance law to provide information about loans and their usage. Finance Minister signed the loan agreement following approval from the President’s office With an interest rate of six percent payable monthly and a one-year maturity. The ministry estimates that interest payments would amount to MVR48 million (US$3 million). But Minority Leader Ibrahim Mohamed Solih proposed seeking assurances from the ministry that the money will be used to settle bills and outstanding payments. But again the laws are just a piece of paper for the present Govt. because they didn’t provide any data on how the loans were utilized.
According to the finance ministry’s letter, the government plans to repay the loan from the sale of sovereign bonds. Some US$200 million was raised earlier this month from the country’s debut sovereign bond issue in the international finance market. “This BML loan will have an interest and on top of that, the sovereign bond will also have an interest of seven percent. So it will become a double interest. Opposition is continuously expressing concern with public debt rising above the legal limit of 60 percent of GDP set by the fiscal responsibility law.
Last year International Monetary Fund warned that the Maldives is facing “a high risk of external debt distress” due to financing large-scale infrastructure projects entirely with foreign loans. The IMF and the World Bank predicts debt to reach 121 percent of GDP by 2020.
What Maldives is facing right now is a debt trap and by taking more loans, Yameen Government is making sure that our economy becomes unrecoverable from it. And the ultimate sufferers of this ordeal will be us. In order to repay these loans, the Government will increase the rate of tax and cut subsidies. Remember the time when Govt. cut down the subsidy on food and how we all were forced to suffer. That time could come back and become a never ending reality of our lives in Maldives. What should we do? Well, we should not stop raising our voices against this regime.
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