The Privatization and Corporatization Board (PCB) has today instructed state-owned enterprises (SOEs) to implement cost-cutting measures.
This directive comes after a period of mounting economic pressure following the Iran conflict, during which no such austerity measures were taken until hostilities were suspended.
In a circular sent directly to companies rather than being published publicly, the PCB ordered additional expenditure reductions in light of the current economic situation. These measures apply to all state-owned companies and their subsidiaries.
The mandated cost-cutting measures include:
- Taking all necessary steps to significantly reduce expenditures on employee salaries and benefits.
- Organizing company workflows to ensure tasks are completed within official working hours, and prohibiting overtime unless absolutely essential.
- Immediately suspending all staff promotions and halting recruitment, except for essential positions required to maintain core operations.
- Implementing all necessary measures to manage payroll costs to ensure sustainable cash flow management.
- Ensuring that no expenditures are made beyond those strictly necessary for the company to fulfill its legal and statutory obligations.
- Conducting research on the economic impact of Middle East instability and prioritizing measures that mitigate the financial burden on the public.
- Canceling all non-essential events and ceremonies; companies with existing resources are encouraged to share them with others to minimize costs for any necessary functions.
The PCB has further instructed company boards to implement any additional measures deemed necessary to manage expenditures sustainably.
The directive to SOEs comes 40 days after the conflict began. Notably, these companies continued large-scale hiring right up until last weekend’s elections and referendum.
Previously, the only measure taken by the PCB was a directive issued on March 30 to reduce travel expenses, mirroring the government’s own stated policy on austerity.
When questioned about the surge in recruitment, the government repeatedly maintained that staff were being hired only as required for budgeted projects. President Mohamed Muizzu and his cabinet ministers consistently denied that these appointments were politically motivated or linked to the elections.
Similarly, the President and his ministers rejected allegations that austerity measures were being delayed until after the polls.
"There are no measures being held back for after the election. We are announcing our intended policies and actions through weekly media briefings," Muizzu had stated.
However, following a significant defeat for the government in the elections and referendum, efforts to curb spending have now commenced. Most of these measures are being implemented discreetly through internal directives. Finance Minister Moosa Zameer has previously indicated that such internal measures would not be made public.
