70 Percent of Proposed Budget for 2027 is Recurrent Expenditure: Nasheed
10 ނޮވެމްބަރު 2026 | އަންގާރަ 11:42Former President Nasheed has accused the government of failing to restructure the national debt while exacerbating fiscal waste through excessive public sector hiring. He further noted that the absence of a coherent debt repayment policy has forced the state to divert all available liquidity toward debt servicing, identifying this as the primary driver behind the country’s current dollar shortage.
Former President and MDP Chairperson Mohamed Nasheed. | MDP
Former President and Chairperson of the MDP, Mohamed Nasheed, has stated that 70 percent of the government's proposed budget for the upcoming year consists of recurrent expenditure.
Speaking at a press conference held by the MDP on Tuesday, Nasheed stated that he defines recurrent expenditure primarily as the amount spent on salaries. To illustrate this, he pointed to the excessive number of staff employed at powerhouses across various islands.
Consider the power plants on some of our islands; there are facilities that fail to generate even a single megawatt of electricity, yet employ as many as 50 staff members. In contrast, a Maldivian resort producing five megawatts of power typically operates its engine room with a maximum of just four or five employees.Mohamed Nasheed
Highlighting the government's excessive wasteful spending, Nasheed stated that while the administration's primary ambition is to secure votes, no government has ever succeeded in winning an election simply by distributing jobs.
Furthermore, Nasheed stated that when President Dr. Mohamed Muizzu assumed office, he would have been clearly aware that 2026 was a year in which a substantial amount of debt would fall due for repayment.
Former President Nasheed stated that by 2023, the current administration was fully aware that more than one billion dollars in debt repayments would fall due. He further noted that the government had failed to restructure this debt, despite ongoing attempts to do so throughout 2024 and 2025.
Initially, the government collaborated with the U.S. International Development Finance Corporation and The Nature Conservancy (TNC) to facilitate a debt-for-nature swap. However, due to a lack of technical expertise and an inability to navigate such complex negotiations, coupled with a lack of leadership from the President, the initiative failed to materialize.Mohamed Nasheed
Nasheed stated that although the Climate Vulnerable Forum (CVF) had subsequently engaged with the Maldivian government regarding the debt issue, those efforts have stalled due to the administration's lack of direction, clear objectives, or a defined policy.
Consequently, Nasheed stated that the government has utilized all available funds in the country to settle its debts. He further noted that this is the primary reason behind the current dollar shortage.
