Construction Minister Dr. Abdulla Muththalib has said that the government has no choice but to borrow money to carry out development projects.
Speaking at the inauguration ceremony of the Fiyoari port development project, Muththalib said implementing projects worth billions in all the islands is a huge challenge for a small country like the Maldives.
"We have to spend more on recurrent than revenue. So the government is always forced to get a loan from somewhere to run such projects. Whether it is by selling bonds inside the country or borrowing from abroad," he said.
He stressed that conflicts between countries such as China and the United States affect Maldives and the accessibility to loans.
"I would like the people to accept these things. In fact, when we want to run a project, we cannot go and take a loan immediately. We don't get that many loans domestically," he said.
Muththalib said the government carries out projects by planning in advance and working with many people, but noted that this work is often not visible to the people.
“I would like to ask the people to cooperate with the government as much as possible and accept the challenges faced by the government and continue to participate in the work we are doing as best we can,” he said.
During the presidential election campaign in 2023, the former administration was criticized for depending on loans to carry out development projects.
Even after President Dr. Mohamed Muizzu assumed office, senior government officials expressed concern over debt as a result of borrowing.
According to the Finance Ministry, the government received MVR 34.7 billion last year. However, recurrent expenditure stood at MVR 37 billion.
The opposition and international financial institutions have called for recurrent expenditures to be reduced and implement cost-cutting measures.
The government has announced a series of measures to reduce costs, but none of the measures have been implemented and recurrent costs keep rising due to the high number of political appointees.
The government has refused to disclose the total number of political appointees, but the opposition believes the figure is more than 3,000.
