Current administration is borrowing more just to service existing debt: MDP
In the MDP’s official response to the Presidential Address, Minority Leader Ibrahim Nazil criticized the government for acquiring additional loans to service existing debt and warned that escalating state waste is destabilizing the economy. Expressing concern over a perceived lack of sincerity in implementing austerity measures, the MDP highlighted the government's failure to stabilize the dollar exchange rate and its refusal to disclose accurate information regarding national reserves. Consequently, the party called for full transparency, demanding that the administration provide the public with a clear and detailed account of the state's financial records and current reserve levels.
Minority Leader and Member of Parliament for Hithadhoo South, Ibrahim Nazil, delivers the official response to the 2026 Presidential Address. | People's Majlis | People's Majlis
The opposition MDP has stated that the current administration is resorting to taking on new debt simply to service existing debt obligations.
During Tuesday's parliamentary sitting, Minority Leader and MP for South Hithadhoo, Ibrahim Nazil, delivered the Maldivian Democratic Party’s (MDP) official response to the Presidential Address.
Delivering the response to the Presidential Address, Nazil stated that this administration assumed power while heavily criticizing the previous government for its reliance on securing loans.
The member noted that while President Dr. Mohamed Muizzu had previously claimed to know how to govern the country without incurring new debt, this administration has borrowed more extensively in a shorter period than any previous government.
Debt is being incurred simply to service existing debt, yet there is no visible progress from these borrowings. The government's inability to balance the budget with its current revenue, necessitating further loans, is a direct result of excessive state waste. For instance, Velana International Airport is the most profitable commercial enterprise in the Maldives, generating millions of dollars in revenue. Despite this, we recently witnessed the acquisition of a new $40 million loan just to settle a previous debt taken out for the development of the duty-free area.Minority Leader and Member of Parliament for the South Hithadhoo constituency, Ibrahim Nazil.
The member stated that Velana International Airport (VIA) is the most profitable and significant commercial enterprise in the Maldives, generating millions of dollars in revenue. He questioned why a new loan had to be secured to repay existing debts and demanded to know how the company’s substantial earnings are being utilized. He further emphasized that the government must remain fully accountable to the people, who are the true stakeholders of the state, regarding these financial matters.
Delivering the MDP’s official response to the Presidential Address, MP Nazil highlighted that the two-rupee plastic bag fee remains in effect. He noted that while the current administration is comprised of individuals who previously opposed and ridiculed the levy, they continue to enforce it even after the departure of the government that originally introduced the policy.
Noting that the ruling PNC holds the parliamentary majority, Nazil pointed out that despite more than two years having passed under this administration, no effort has been made to abolish the plastic bag fee.
Nazil expressed his disappointment that this year's Presidential Address lacked details on several key economic pledges. He noted the absence of updates regarding the projected $400 million in revenue from the Development Bank and bunkering services, as well as the proposed financial center in Funadhoo, which was to be connected via monorail to Hulhule', Hulhumale', and Full Moon Resort. Furthermore, he highlighted that the address failed to mention the underwater tunnel connecting Malé and Rasmale'—previously promoted for its scenic views—or provide any specific details on the various economic indicators and signals previously promised by the administration.
Delivering the latest details on these matters to both Parliament and the public is an obligation of the government, Nazil stated while delivering the response to the Presidential Address.
Furthermore, Nazil noted that despite assurances that the dollar rate would not rise further, the price has continued to climb without decreasing by even a single cent. He added that even with the government's mandatory dollar conversion policies, the issue remains unresolved, and the situation has only continued to deteriorate.
The MDP stated that while the President announced measures to reduce state spending on June 27, 2024, no previous administration has held as many costly ceremonies and events as the current government.
After squandering public funds on excessive and wasteful expenditures and depleting the nation's accumulated reserves, an attempt is made every year to create the illusion of a growing reserve. By consolidating figures from the Sovereign Development Fund, commercial bank deposits held at the Maldives Monetary Authority, and various other accounts, reports are fabricated to artificially inflate the appearance of the usable reserve.Minority Leader and Member of Parliament for the South Hithadhoo constituency, Ibrahim Nazil.
Nazil stated that all these actions demonstrate a lack of sincerity in the pledge to reduce government expenditure.
The MDP has called on the government to simultaneously disclose the current balances of the Sovereign Development Fund, usable reserves, gross reserves, and foreign exchange reserves. This demand comes as the current administration has discontinued the long-standing practice of regularly publishing detailed reports on state revenue and expenditure.
