Mauroof says SOEs are laying off staff because they cannot afford to pay salaries

This government cannot pay the salaries of employees in government-owned companies tomorrow, and that is why staff are being laid off, MP Mauroof Zakir said on Thursday evening.

Speaking at a panel discussion held by the opposition MDP under the ‘Job Thursday’ series, Mauroof said the government had previously stated that political appointees would be dismissed after the council elections, but that scenario never materialised. Instead, he said, political appointments continue to be made from time to time.

“So why is the government, through the parent Privatization and Corporatization Board, saying that companies should lay off employees?” he asked.

“I believe you [the government] have paid the loan, paid the sukuk, but there is no way to pay the salary tomorrow. After paying the salary for one month, the government is looking for a way to pay the salary next month,” he said.

Mauroof noted that previous governments sought free assistance from foreign countries. “But today, we see no assistance coming,” he said.

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He added that major global financial institutions, including the International Monetary Fund (IMF) and the World Bank, are closely monitoring the Maldivian economy and observing what the government is doing to cut spending.

Therefore, he alleged, the government is likely to issue announcements about staff cuts to demonstrate that expenditure is being reduced.

He said managing directors of state-owned companies are working without any plan and simply following the advice of President Dr. Mohamed Muizzu.

“The other rule is that employees may not be paid their salaries, and they are going to dismiss them. They are announcing redundancy through the PCB in order to find a rule to dismiss them,” he said.

However, Mauroof argued that this does not constitute redundancy.

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He said employees can only be made redundant if their responsibilities no longer exist. As long as the responsibility remains, employees cannot be declared redundant, and must be notified well in advance. He added that employees should be given more opportunities before redundancy, and that rehiring redundant staff should also be considered.

“As I mentioned earlier, there are two objectives: one is to show that spending is being reduced, and the other is to really impoverish the people,” Mauroof said.

On April 18, the Finance Ministry ordered companies to cut their staff by 33 percent as part of efforts to reduce operating costs and strengthen cost management. The Privatization and Corporatization Board on Tuesday ordered companies to complete the downsizing within three months.

Last April, then-Finance Minister Moosa Zameer said the total number of employees in state-owned companies was estimated at 42,000. The MDP has previously said companies will have to cut more than 14,000 people to meet the 33 percent target. The party estimates that more than 50,000 people will be affected.