Govt hits back at ex-finance minister amid blame game

Former Finance Minister Ibrahim Ameer has misrepresented the truth about the country's current financial and economic woes, the Finance Ministry said on Sunday.

The ministry said in a statement on Sunday that the government is working hard to ensure the sustainability of Maldives' finances and debt.

However, Ameer, as the finance minister in the previous government, had made misleading statements about the state's financial situation and the fiscal constraints facing Maldives, the statement said.

The Maldivian economy recovered as one of the fastest since the outbreak of the coronavirus and is expected to grow rapidly in the middle of this year and in the medium term, the Finance Ministry said in a statement.

The Ministry of Finance has noted that there are current and past fiscal constraints from 2022 and 2023 and the measures to be taken to reduce the constraints will be written in the fiscal strategy statements and budget books, the statement said.

The changes in GST rates during the last year were appropriate to the situation, the finance said, adding that the cost-cutting policies, the most important step to overcome the COVID-19 crisis and reduce fiscal constraints, were not implemented until the end of the last government.

"This approach in recent years has resulted in an increase in government expenditure that does not match revenue and an increase in the amount of debt required to cover this deficit," the finance ministry said in a statement.

The statement said:

“In 2024, the Budget Book has prepared a conceptual framework stating that fiscal reforms will be implemented and costs will be reduced from mid-year, but no detailed action plan has been prepared on how to do so till November 17, 2023,” the Finance Ministry said.

The ministry said it is preparing to complete the detailed technical work on the amendment and implement the necessary measures to reduce costs. The reforms are in the interest of all citizens and are important for the future. The Finance Ministry said in its statement that the cooperation of all is requested in these endeavours.

Former finance minister Ibrahim Ameer said he does not support tax hikes, "delving into the pockets of the people," without first bringing the necessary reforms through the government to overcome the financial crisis.

At a press conference held by the MDP, Ameer said the former President Ibrahim Mohammed Solih's government took quick and good measures with the coronavirus. He alleged that the problem now is that this government does not know how to manage the financial challenges, he said.