Maldives President Mohamed Muizzu. File
| Picture Credit score: PTI
Maldives President Mohamed Muizzu will take a 50% wage reduce as a part of his authorities’s efforts to chop prices, because the nation braces itself for a probably extreme monetary crunch.
President Muizzu introduced “particular measures” in keeping with his authorities’s “financial reform agenda” proposed as a part of the 2025 nationwide price range. “As an preliminary step, the President said he is not going to be taking 50% of his wage,” his workplace stated in a press release on Tuesday (October 22, 2024) . Additional, the wage of all political appointees and employees of state-owned enterprises, excluding banks, will likely be lowered by 10%.
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“When the 2025 price range is introduced, below the financial reform agenda, a lot of measures will likely be taken to cut back authorities spending…for a interval of two years,” Mr. Muizzu stated on social media platform ‘X’.
Dwindling reserves
His announcement comes within the wake of rising concern over the island nation’s dwindling overseas reserves. In its newest replace, the World Financial institution stated the Maldives’s overseas change reserves have declined to “critically low ranges”, with rising liquidity dangers, pushed by an elevated Present Account Deficit and rising exterior debt repayments. “Official reserves fell from $590.5 million at end-2023 to $443.9 million at end-August 2024, as a consequence of rising debt compensation obligations and excessive import wants,” the Financial institution famous in its October 2024 replace.
Official reserves are at their lowest degree since 2017, enough to cowl just one month’s value of imports to the Indian Ocean archipelago. The nation’s debt reached $8.2 billion or an estimated 115.7% of GDP within the first quarter of 2024, it stated.
Earlier this month, India signed a vital forex swap settlement with the Maldives for $750 million, after Prime Minister Narendra Modi met with President Muizzu in New Delhi.
The swap association for $400 million and a further ₹3,000 crore ($357 million), signed between the Reserve Financial institution of India and the Maldives Financial Authority below the South Asian Affiliation for Regional Cooperation (SAARC) Foreign money Swap Framework, will stay till 2027. It’s geared toward serving to the Maldives address its overseas forex crunch, officers stated.
Printed – October 25, 2024 03:15 am IST
