Subsidy reforms challenging, Gasim says

Parliamentary finance committee Chairman and Maamingili MP Gasim Ibrahim stated Wednesday that while the government is taking steps to increase revenue, reduce expenditure, and manage debt, reducing subsidies remains a challenge.

The parliamentary finance and economic committee met Wednesday with a delegation from the International Monetary Fund (IMF). IMF Mission Chief Piyaporn Sodsriwiboon, who led the delegation, stated that subsidies had contributed to reducing waste but noted that fiscal reform measures had been delayed.

Following Piyaporn Sodsriwiboon's remarks, Gasim expressed support for the government’s financial reform efforts. He said he had confidence in the government's plans and expected the Maldives’ financial situation to improve.

"I believe the government's target will be achieved. Strong measures have already been taken to stabilise the economy," he said.

"I am confident that the government will overcome these economic challenges. These challenges are not just because of government expenditures."

Gasim stated that subsidies are provided because many people lack financial means. He described it as necessary support for the population.

"It's hard for most people to make ends meet. That’s why the government, every government, is doing it," he said.

He noted that governments seek public approval, often increasing subsidies and aid, which can lead to higher expenditure.

"This is a problem. Every election, the government comes with promises, and expenditure keeps increasing. It is reaching an extreme," he said.

He stated that this issue is not unique to the Maldives but is also observed in neighbouring countries.

Gasim acknowledged that public demand for subsidies is increasing. However, he stated that the government remains focused on stabilising the financial situation without imposing excessive burdens on the population.

"The president has already decided on a policy of salary cuts. The work is already underway. He is reforming government-owned companies. These are efforts to cut costs. Measures are being taken to increase revenue."

He added that the budget deficit for this year is expected to be MVR 20 billion but is projected to be reduced to MVR 9 billion through economic measures.

"That means the government will not only reduce investments but also increase revenue. That will be done. I have that confidence," he said.