Muizz's economic goal: reduce deficit to single digit, expand economy
"8 billion notes have been printed in the five years of this government alone," Muizz said.
By
Mohamed Muzayyin Nazim
Opposition PPM-PNC presidential candidate Dr Mohamed Muizz vowed on Sunday to bring down the budget deficit from double digit to single digits through the economic solutions proposed by his government.
The second round of the presidential election will be held on next Saturday. Muizz and PPM-PNC leaders presented the economic manifesto at a ceremony held at Meeruma Event Hall.
In the presentation, Muizz explained the current state of the economy and the economic policies announced by his government for the next five years.
"As per the [economic] policy of this government, every child born in Maldives today is in debt of MVR 200,000. In short, today's economy can be described in this sentence," Muizz said.
First, he highlighted the state debt situation. As such, Muizz said:
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The public debt now stands at MVR 114 billion; in addition, the debt of State-Owned Enterprises (SOEs) has reached MVR 32 billion
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Total debt stood at MVR 146 billion
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The total debt created by this government is MVR 60 billion
“This is about USD10 billion in debt in dollars,” Muizz said.
"We are facing such a situation. We are determined to get the economy out of the pit it has fallen into today”.
Muizz cited the reasons why the economy fell into this pit:
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The loans taken for the projects have been used without any rules and regulations to facilitate corruption
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Political positions created without much purpose, without any rules and regulations
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Low per capita income growth rate; debt exceeds income
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Velana International Airport expansion project has not been completed
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There is little attention to the fishing industry and projects have not been completed
Muizz also criticized the government's policies to overcome the economic recession. He highlighted the following:
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Printing of money
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Sale of bonds, securities and T-bills
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Additional loans and grants; Former President Abdulla Yameen's government took out $10 billion in bank loans while this government has taken out $40 billion
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Spending too much from the budget to run government waste company that do not make profits; 4 billion per year
"All the governments before this government combined, printed 6 billion notes in the last 40 years. But 8 billion notes have been printed in the five years of this government alone," he said.
In his presentation, he also compared the amount of reserves in the Yameen government and this government. They include:
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At the end of Yameen's rule, total reserves stood at USD 712 million and usable reserves at USD 284 million
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To this point in this government, total reserves are now down to USD 594 million; The current usable reserves are USD150 million
"The expenditure has gone up so much. The amount in reserves has gone down so much. There is nothing to show for it," he said.
After revealing all the figures, Muizz said, "At this point, the economy is off the road. He said he knew the situation very well and the solutions.
Muizz proposed three main things to overcome this situation.
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1-
Economic stability
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2-
Economic transformation
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3-
Economic expansion)
When those three things are fulfilled, the economy will take off, Muizz said.
"By the end of this five-year term, the budget deficit is at 15%. When we conduct and complete our planned conomic activities, we will reduce the average budget deficit to single digits," he said.
Noting that the dollar has risen to MVR 18-19 in the black market, Muizz said his government would lower the rate and keep it stable. By the end of his five years in office, the reserves will also be increased, he said.
In addition, he assured that with the economic measures he will take, "there will be no major difficulty in paying the debt due in 2026.
Some other things Muizz suggested:
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End the deposit of MVR in the Sovereign Development Fund (SDF) and deposit dollars into the fund as was done in the Yameen government; a special law should be enacted to protect the fund
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Refinancing debt with the aim of bringing the credit rating to 2016 and increasing investor confidence
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Implementation of Special Economic Zones (SEZ) Act
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Establishment of an investment bank; with that, it will be easier to attract international investments
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USD 4 billion in foreign investment in tourism; with it, developing 35 luxury resorts over five years
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Increase the export of canned fish produced in Maldives and help further expand the industry
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Increase the production of crops grown in Maldives and open up opportunities for investment
Muizz's goal is to increase the usable reserves to USD 500 million under his government. He also aims to increase the amount deposited in the SDF to USD 500 million.
"By doing this in this direction, we will be able to take the country's economy to the next level and lead a fulfilling life," Muizz said at the end of the presentation.
