Munawwar expresses concern over additional loan taken to expedite projects

Former Finance Minister Ahmed Munawwar has expressed his concerns over the Government’s decision to taken an additional US$ 100 million to expedite projects.

In a Facebook post, the former Minister said that it was the first time that a country took over US$ 100 million further credit line on top of existing loans to expedite projects.

He was referencing to the latest round of loans signed between the Maldives and India. In the ongoing four-day trip, Prime Minister Narendra Modi announced this loan. In thanking him, President Ibrahim Mohamed Solih said the discussions will facilitate implementing ongoing projects.

In addition to this, the two governments signed a letter of intent for US$ 119 million to complete 2,000 housing units in Hulhumale’.

These revelations came in spite of the Government pledging not to start any projects or take new loans, given the current economic challenges facing the country and rising prices. The Government had set some stiff austerity measures. However, these seem to be ignored at will, with the President and senior administration figures exempted from them.

The total amount of debt taken on during this so far is US$ 219 million or MVR 3.3 billion.

In light of this, Munawwar raised further worries over the general paralysis of checks and balances, and the freezing of Fiscal Responsibility Act.

The Government had suspended some clauses of the Fiscal Responsibility Act, citing covid-19. It is yet to be lifted. Since the clauses were suspended in 2020, the Government had printed a significant amount of money, contributing to the devaluation of the Rufiyaa.

“Maldives economy is in serious mishaps and further risks are forthcoming while the whole public attention is diverted using social media towards other issues,” he said.