Minister Shafeeq stated that the government is serious about employing measures to reduce expenses and revealed that they are fully prepared to proceed with the work. He stated that the administration 'has the guts' to do it and expects efforts to begin soon.
Minister of Finance, Dr Mohamed Shafeeq has declared that the government is serious about implementing measures to reduce expenses and declared that they 'have the guts' to do it.
Speaking at the ceremony held yesterday to launch the World Bank Maldives Development Update 2024, Shafeeq stated that the expected reform outcomes were not observed last year due to failure in complying with the steps determined to reduce expenses at the time.
The title of the World Bank report this year is 'Scaling Back & Rebuilding Buffers'. This report also emphasizes that a reform plan is necessary to maintain the economy across the long-term and highlights the importance of quickly implementing measures to reduce expenses.
Shafeeq said that Maldives is currently in a very difficult economic status and said that due to the country's extreme debt, the economy cannot be course corrected without implementing reformation measures.
He stated that the government has the ability to reduce expenditure and insisted that they must have the guts to proceed it. He assured that the new government will prove as such to the people.
"Should have the guts to do it. And priority must be given to implement the most beneficial actions for the people. Therefore we need to become very serious in the reform work," he said.
"Cannot delay reforming SOEs. These reformations will be brought. Aasandha will be reformed through the health sector. We will reduce wastefulness in Aasandha," Shafeeq continued.
He assured that special precedence will be given to bring forth a system that will allocate subsidies to the people that need it most after altering the policy for subsidy allocation. MVR 600 million has been allocated from the annual state budget to determine targeted subsidies for the people in most need. With this change, the provision of subsidies for electricity, oil, staple foods and sewerage services will also be altered.
Shafeeq revealed that the government is fully prepared to reform the State Owned Enterprises (SOEs) and assured efforts to implement it will be begun soon.
He added that although the World Bank noted that the reform agenda of the government is ambitious, the government wishes to implement these steps without further delay to resolve the economy at the possible earliest.
The World Bank report predicts the country's economy to grow by 4.7 percent. The report further indicates the low economic growth rate within the country to be caused by lower tourist spending and reduced durations of their stay.
The report also expects state expenditure to remain higher than the country's income during the year as a consequence of the current fiscal reform agenda.
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