Ministry of Finance on Wednesday ordered all state institutions, excluding local island councils, to take measures on cutting down costs since the government may not generate the initially estimated revenue due to the novel coronavirus (2019-nCoV) outbreak in China.
As per a circular signed and publicised by Finance Minister Ibrahim Ameer, the state requests to cut down costs in five main areas including employee expenses, capital expenses, travel expenses, administrative expenses and maintenance and operational expenses.
To cut down employee expenses, the ministry prohibits the introduction of any new job positions and granting any allowances that are not already being issued. This is applicable till the end of this year, even though it is included in the budget. The ministry also stated that the salary structure cannot be modified without permission from the Finance Ministry following an investigation by the pay-review board.
Moreover, the state advises to only fly abroad for necessary trips, choose the cheapest options for travel domestically and reduce the costs of VIP lounge services as well. In addition, Finance Ministry ordered to halt any fairs, study tours and short training programmes funded by the state budget for the time being.
The circular also requests all institutions to only carry out maintenance work that has already commenced or is necessary. If the maintenance work costs over MVR 35,000, the circular outlines that the project must be submitted to Finance Ministry with the approval of the top official of the sector.
Furthermore, government institutions are urged to finish their workday early so that employees will not need to work overtime. If any institution wishes to host celebrations on national occasions by utilising the state budget, they must acquire Finance Ministry's permission in writing.
In order to cut down capital expenses, the ministry is only allowing capital expenses stated in the Program for Strategic Industrial Projects (PSIP)s. Finance Ministry's permit must be acquired for any such expenses that exceed the MVR 35,000 limit.
The circular states that the global economy is being affected by the virus outbreak and the Maldivian economy may face the same challenge as well.
Due to the outbreak, many tourists have cancelled their bookings to the country, the state formerly revealed.
Maldives has now restricted the entry of all persons who have China as their port of embarkation or have transited through Mainland China, regardless of their nationality. The largest number of tourist arrivals to Maldives are from China.
Prior to this, the government also temporarily suspended all incoming direct flights from China and released a travel advisory for all Maldivians warning against all non-essential travel to China and all other countries where the virus has been detected.
In the Presidential address delivered last Monday, President Ibrahim Mohamed Solih stated that the country's economy will be affected due to the aforementioned measures taken to protect the public's general health.
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