The Maldives government has cancelled its agreement with US company Centerview.
Adhadhu understands that Centerview was appointed to provide financial advice at a monthly cost of USD 55,000 or MVR 844,810 under a retainer agreement. But a source told Adhadhu that the government had cancelled the agreement.
The Maldives government did not announce the agreement with Centerview. However, citing two sources familiar with the situation, Reuters reported on October 12 that Centerview was appointed as an"adviser on debt matters."
It is unknown why the agreement was terminated so soon. It is also unclear whether the government will appoint other consultants.
Centerview's founder Blair Wayne Effron is a major donor to the American Israeli Public Affairs Committee (AIPAC), which works to increase support for Israel's genocide in Palestine.
According to publicized information, Effron has donated money to AIPAC at least eight times this year with the amount being at least USD 8000.
Effron is also a member of the Council on Foreign Relations (CFR), which funds Israeli lobby groups. The CFR is widely described as the world's most powerful private organization. According to the organization's donor list, Effron has donated more than USD 100,000 in 2021-2022.
Maldives' public and publicly guaranteed debt stood at USD 8.2 billion in the first quarter of the year. That is 118 percent of the country’s GDP. The bulk of the debt is owed to India and China.
In June, President Dr. Mohamed Muizzu said the country’s financial situation is deteriorating and expenditures need to be cut.
"There are a number of measures to reduce government expenditure, including steps to reduce government recurrent expenditure. These include reducing the number of political posts and reducing or not having ceremonies on various occasions," he said.
However, the situation continued to deteriorate as the government continued to push back fiscal reforms. The country’s usable foreign exchange reserves were completely depleted in August and two credit rating agencies, Fitch and Moody's, downgraded Maldives' credit rating.
The government rolled over a USD 50 million loan owed to India in September. Since then, President Muizzu has signed a currency swap agreement worth USD 400 million and INR 3 billion during his visit to India last week.
