MDP MP claims planned lay-offs driven by state's financial position
PCB has instructed state-owned enterprises (SOEs) and the Ministry of Finance to reduce their workforces by 33%.
Kendhoo MP Mauroof Zakir has claimed the government's planned reduction of state employees is being driven by fiscal pressures and efforts to demonstrate expenditure cuts to international financial institutions.
Speaking at a public discussion organised by the opposition Maldivian Democratic Party (MDP) at Artificial Beach on Thursday evening, Mauroof said the government's workforce reduction plan reflected its financial position.
The event was part of a series of discussions organised by the MDP on the economy.
On 18 April, the Privatisation and Corporatisation Board (PCB) instructed state-owned enterprises (SOEs) and the Ministry of Finance to reduce their workforces by 33%. On 18 July, the PCB directed companies to complete the reductions within three months.
Mauroof questioned whether the government intended to implement the policy, noting that political appointments had continued despite earlier statements that such positions would be reduced.
"Under public pressure, and following their defeat in the local council elections, they came out and claimed they would cut political appointees. Yet, we haven't seen a single political appointee dismissed," he said. "Instead, we see new political appointments being made every single day, week after week."
He argued that the government's financial position was one of the main reasons behind the proposed workforce reductions.
"They have managed to settle loan repayments and sukuk obligations. However, tomorrow there won't be any money left to pay salaries. After clearing one month's payroll, the government immediately scrambles to figure out how to fund the next month," Mauroof said.
He also alleged that funds from the Maldives Retirement Pension Scheme were being used to support government finances, warning that such measures could increase the amount of rufiyaa in circulation and place further pressure on the exchange rate.
Mauroof said another reason for announcing the workforce reductions was to demonstrate fiscal restraint to institutions such as the International Monetary Fund and the World Bank.
"Because the state is out of money, global financial bodies like the IMF and the World Bank are closely monitoring the Maldives' economic performance, fiscal policies, and spending reduction efforts," he said. "Announcing workforce cuts and putting on this show is merely a bid to demonstrate cost-cutting measures to foreign observers."
He also claimed that some civil servants in the islands had received redundancy notices but that, in some cases, the decisions had later been reversed following political intervention.
Mauroof argued that redundancies must comply with employment law.
"An employee can only be made redundant if the specific responsibilities of their role cease to exist. As long as those duties remain, an employee cannot be declared redundant merely because a company's financial standing has deteriorated," he said.
He added that employees must receive prior notice, be provided with opportunities to transition to other employment where applicable, and that the criteria used to determine redundancies should be open to legal scrutiny.
