MP Falah Says Maldives Is ‘Not As Wealthy’ As Public Believes Amid Budget Debate

Parliamentary Group Leader of the ruling People’s National Congress (PNC), Ibrahim Falah, has said the Maldivian state is not as financially strong as many people believe, citing persistent budget deficits and rising public debt.

Falah made the remarks during Monday’s parliamentary debate on a resolution submitted by Maldivian Democratic Party (MDP) MP for Kendhoo constituency Mauroof Zakir. The resolution alleged that state-owned enterprises (SOEs) were dismissing employees for political reasons under the guise of rightsizing.

“The Maldivian state is not as wealthy or prosperous as many people believe. During former President Maumoon Abdul Gayoom’s administration, the national budget was around MVR 4 billion to MVR 6 billion,” Falah said.

He said government revenue currently amounts to around MVR 34 billion to MVR 35 billion annually, leaving the state to finance annual deficits of between MVR 12 billion and MVR 15 billion through borrowing. According to Falah, this has contributed to national debt reaching between MVR 160 billion and MVR 180 billion.

Falah also responded to opposition claims that the government’s planned MVR 2.4 billion treasury bill transaction involving the Maldives Pension Administration Office amounted to money printing.

He argued that the transaction was comparable to the way a bank would use customer deposits to provide loans and said such financial activity should not be described as printing money.

Falah further said the current administration had not introduced a supplementary budget, unlike the previous administration led by former President Ibrahim Mohamed Solih, which he said regularly required additional spending approvals before the end of the fiscal year.

The MVR 2.4 billion transaction has attracted public attention after media reports, citing financial experts, said the Pension Office planned to sell previously purchased government bonds to the Maldives Monetary Authority (MMA) before reinvesting the proceeds into new long-term government securities.

The Pension Office has defended the move, saying it would strengthen the fund’s investment portfolio by increasing long-term returns while creating foreign currency reserves without purchasing foreign exchange from the market.

The transaction has also coincided with the resignation of several senior officials from the Pension Office. According to media reports, multiple senior employees resigned last Thursday, following the earlier resignations of Chief Executive Officer Sujatha Haleem and Chief Financial Officer Hawwa Fajwa.