Finance Minister Dr. Mohamed Shafeeq has acknowledged significant challenges in financing this year's budget, emphasizing the need for urgent reforms.
Speaking at the Parliament's Public Finance Committee on Wednesday, Dr. Shafeeq highlighted that resolving the Maldives' debt issues is crucial for financing the state budget. However, he noted that there are obstacles to implementing the budget as planned for this year.
The minister said the government should accelerate changes in the management of government-owned companies and reduce subsidies provided to these companies to cover government expenditure. Noting the extremely high operating costs of the companies, the minister stressed that the reform of the companies cannot be delayed further.
Dr. Shafeeq said companies have no choice but to cut costs amid the current economic crisis. He cited the Road Development Corporation (RDC) as an example to be followed, noting that the company had saved MVR 17 million through recent cost-cutting measures.
The minister said the implementation of the government's reform agenda to improve the country's economy cannot be delayed. He indicated that the government would review the subsidy policy this year and introduce a targeted subsidy system for essential needs. He emphasized that measures should be taken from July at the latest to restore the country's economic health.
The minister also criticized the inclusion of the same debt amount in this year's budget as in the previous year, questioning the accuracy of the figure since the state budget debt has remained at MVR 14 billion for the past two years.
The government has approved a budget of MVR 49.8 billion for this year, with MVR 15 billion in revenue and MVR 18 billion in expenditures so far.
