Monday 22nd Jul 2024
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Government Committed to Reducing Expenditure and Increasing Revenue: MP Azaan

Hithadhoo Central MP Ahmed Azaan stated that the government is focused on reducing expenditure and increasing revenue to address the country's financial challenges. Speaking on the 'Raajje Miadhu' program on PSM News, Azaan highlighted the significant economic issues faced by the Maldives.
Azaan noted that when President Mohammed Muizzu took office, the national debt was RF 120 billion, with RF 52 billion added during President Ibrahim Mohammed Solih's administration. He emphasized that the country's reserves were at $93 million, insufficient for three months of imports. This situation was not only acknowledged by local parties but also highlighted by international financial institutions like the World Bank and IMF.
“One of the first actions taken by President Muizzu was to stop printing money despite differing opinions. This decision was made to ensure long-term economic stability,” Azaan said.
He revealed that the Maldives must pay $500 million this year, another $500 million next year, and $1 billion the following year. Half of this year's debt has already been paid, but the country remains in a difficult financial situation.
To address these challenges, Azaan mentioned that the government is formulating plans to increase revenue and cut expenditure. He stated that detailed plans would be announced soon. Key strategies include expanding the tax base, diversifying the economy, and increasing private sector jobs, as recommended by the World Bank and IMF.
Azaan also emphasized the need for reforms in State-Owned Enterprises (SOEs) and social services like Aasandha and the National Social Protection Agency (NSPA). He criticized the previous government's borrowing practices, stating that loans were taken for operational expenses rather than development projects with significant economic benefits.
“The economy reached this point due to the irresponsible actions of the previous MDP government, which borrowed excessively over the last five years,” Azaan concluded.
The government's commitment to financial stability and economic reforms aims to navigate the Maldives through its current economic challenges and set the stage for sustainable growth.