President Nasheed: Government committed to strengthening national economic fundamentals

The Government is committed to strengthening the national economic fundamentals, increasing productivity and addressing the bottlenecks to economic activities, President Nasheed has said. He made the statement in his address on the economic and fiscal policy of the Government during a meeting with the Maldivian business community held at Muleeage on Wednesday.

In his statement President Nasheed spoke on the state of the economy and the economic forecasts as well as the Government’s short term fiscal policy, exchange rate, and monetary policy.

Stating that the economy of the Maldives was facing a critical economic situation, the President said a dramatic fall in fiscal revenue since the latter part of 2008 combined with large fiscal and external imbalances had led to budget deficits of worrying proportions. President Nasheed said that the Maldives could face a severe fiscal and balance of payments crisis in the months to come, unless a substantial policy adjustment is put in place.

He said that the Government was therefore, committed to implementing a policy program to stabilize the economy and put it back on a path of sustainable and equitable growth. He said that the key elements of the policy program include: bringing public finances on a sustainable path, including through a continuous reduction in public debt from 2010; mustering adequate multilateral and bilateral assistance; and, strengthening the liquidity and capital position of the banking system.

The President said the government‘s aim was bringing its finances back to a sustainable medium-term trajectory. In his statement, the President stressed that the government would also take decisive actions on the revenue side. Furthermore, the President said by early 2010, a new “green tax” per incoming tourist at the airport will be introduced. The President said that he was confident that the overall result of the policy program would be fruitful and urged the people to give their support for the benefit of the whole nation.