'Successful implementation of projects will ensure surplus budgets'

Finance Minister Ibrahim Ameer has stated that surplus budgets will be proposed in future if the economic projects included in next year's budget are successfully implemented.

The government has budgeted for MVR 37.5 billion as expenditure for next year. The estimated revenue is MVR 29.92 billion, leaving the archipelago with a budget deficit of MVR 5.7 billion.

Speaking at Wednesday's parliamentary sitting, Minister Ameer said even if the national debt is increasing, steps need to be taken to improve the condition of the people. This needs to be taken into consideration when seeking a surplus budget, said the minister.

'Travelling across Maldives, we have seen that the development of some islands are very slow. Schools and health care centers are in dire condition. We cannot wait another 20 years for development to reach [these islands]", said the minister.

Minister Ameer said the Public Sector Investment Program (PSIP) projects included in the budget focus mainly on economic and industrial projects in order to improve the peoples' condition and to increase the country's revenue. The activities would generate revenue to repay outstanding debt, said Ameer.

"This expenditure is to generate more revenue and carry out economic activities. With that will come surplus budgets. If we can achieve the proposed budget, I am confident that the Parliament will witness surplus budgets being presented in future," he said.

The MVR 37.5 billion budget proposed for 2020 leaves the country with a budget deficit of MVR 5.6 billion. While the government will be selling a samurai bond of US$ 300 million to
Japan to compensate for the deficit, the additional MVR 562 million required will be raised through the sale of T-bills.

Treasury bonds were sold to two other parties to make up for the deficit of past budgets. One such financial transaction was the sale of a US$ 250 million treasury bond to Hong Kong's secondary market. This bond will need to be paid by the Maldivian government in 2022.

The funds required for the payment are being collected in the Sovereign Development Fund established by the previous administration, said the Finance Minister. When the new government began administration, the fund had US$ 90 million, which has now increased to US$ 190 million, revealed Ameer.

The second financial transaction is the sale of a US$ 100 million bond sold to Abu Dhabi Development Fund (ADF), to be paid back in 2023. Discussions are ongoing with ADF to increase the period to three years, said minister. The government is hopeful of an extension, he said.

The minister noted that the presidential commission on asset recovery is working hard to recover lost funds. Although an estimate amount of funds that will be recovered has not been included in the budget, any amount recovered will further enhance the government's work, said the minister.