Innovation needed for global economic challenges, Zameer says

Finance minister Moosa Zameer on Thursday called on the world economy to recover from the current fragility caused by wars and disasters if innovative thinking is promoted and through collaborative efforts.

Zameer delivered closing remarks at the second edition of the Global Economic Policy Forum hosted by the Confederation of Indian Industry.

Addressing an audience that included key policymakers and economic leaders, Zameer underscored the interconnected challenges facing the global economy and emphasised the urgent need for sustainability-focused policies.

In his speech, Zameer highlighted the multifaceted global crises that are shaping economic realities.

“The aftershocks of the Russia-Ukraine war and the ongoing conflicts in the Middle East continue to reverberate across global markets,” he stated.

These events, he added, have compounded inflationary pressures and stressed the need for policies that balance immediate economic recovery with long-term sustainability.

Zameer acknowledged that while inflation has burdened economies worldwide, its effects are especially acute for Small Island Developing States (SIDS) like the Maldives.

“Our economies are highly vulnerable to external shocks, and rising costs of imports, particularly energy and food, have strained our limited fiscal resources,” he said.

On the issue of debt, the minister noted the sharp rise in borrowing levels driven by the pandemic. While necessary at the time, the challenge now lies in managing these debt levels sustainably.

“We must strike the right balance between fiscal prudence and addressing the political and strategic realities of the day,” he remarked.

International cooperation and access to concessional finance, he noted, are essential for countries like the Maldives to achieve sustainability targets.

Turning to sustainability, Zameer stressed the urgency of tackling climate change and transitioning to green economies. He highlighted India’s advancements in renewable energy as an example of progress, stating, “India’s leadership in the solar energy sector and its achievement of 200 GW of renewable energy capacity this year are commendable.”

For the Maldives, the stakes are particularly high due to the country’s vulnerability to rising sea levels and extreme weather events. The nation has committed to generating 33% of its energy demands from renewable sources by 2028, coupled with investments in sustainable tourism and climate-resilient infrastructure. Zameer called for substantial international support to realise these goals, particularly in financing and technology transfer.

Zameer concluded by emphasising the critical need for policymakers to balance short-term political imperatives with long-term fiscal stability. For the Maldives, the challenge is further complicated by its heavy reliance on tourism, which makes the economy sensitive to external shocks.

“Ensuring macro-fiscal stability and attaining debt sustainability will remain the prime concerns for the Maldives this decade,” he said.

Zameer underscored the importance of innovative thinking and global collaboration.

“The way forward will require a fine balance between fiscal prudence and political priorities,” he said, highlighting the shared commitment of India and the Maldives to fostering a sustainable and resilient future.