Finance Minister Calls for Innovative Solutions to Address Global Economic Fragility

Finance Minister Moosa Zameer called on global leaders to embrace innovative thinking and strengthen collaborative efforts to address the economic fragility caused by conflicts and natural disasters.

He made these remarks during the closing address at the second edition of the Global Economic Policy Forum, hosted by the Confederation of Indian Industry on Thursday.

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Zameer highlighted the complex challenges facing the global economy and emphasised the importance of sustainability-focused strategies to drive recovery. He pointed to the ongoing impact of geopolitical tensions, particularly the Russia-Ukraine war and conflicts in the Middle East, which continue to disrupt global markets and exacerbate inflationary pressures.

He explained that inflation has had a particularly severe impact on Small Island Developing States (SIDS), such as the Maldives, due to their vulnerability to external shocks. Rising costs of imports, especially energy and food, have strained the Maldives’ limited fiscal resources, creating significant obstacles to economic stability.

Discussing the issue of debt, Zameer addressed the challenges arising from pandemic-era borrowing. He acknowledged that while borrowing was necessary during the pandemic, there is now an urgent need to manage debt levels sustainably. He stressed the importance of striking a balance between fiscal prudence and addressing political and strategic realities. He also underscored the critical role of international cooperation and concessional financing in enabling countries like the Maldives to meet their sustainability targets.

Turning to climate change, Zameer described it as an existential threat to nations like the Maldives. He highlighted the Maldives’ vulnerability to rising sea levels and extreme weather events. He also praised India’s advancements in renewable energy, particularly its milestone achievement of reaching 200 GW of renewable energy capacity this year.

The Maldives has committed to generating 33% of its energy from renewable sources by 2028, supported by investments in sustainable tourism and climate-resilient infrastructure. Zameer noted that achieving these goals would require substantial international support, particularly in financing and technology transfer.

Zameer concluded his address by stressing the need for policymakers to reconcile short-term political demands with long-term fiscal sustainability. He highlighted the Maldives’ heavy reliance on tourism, which makes its economy highly sensitive to external shocks. Ensuring macroeconomic stability and achieving debt sustainability will remain the country’s primary concerns for the decade ahead.

He emphasised the need for innovative thinking and global collaboration to overcome these challenges. He also highlighted the shared commitment of India and the Maldives to fostering a sustainable and resilient future. Zameer reiterated that moving forward will require careful balancing of fiscal prudence with political priorities.