Jihad: New projects cannot proceed unless the economy improves

Finance Minister Abdulla Jihad has said that new projects cannot proceed unless the economy of the country improves.

Speaking at the budget committee today, Minister Jihad said that the Government thinking right now is to continue on-going projects without stopping. And he said that the Government wants to balance the budget.

The Finance Minister said that ways to bring income to the state has to be decided or they cannot conduct any new projects.

Minister Jihad said this after MPs raised concerns that some projects on the budget for 2015 has not yet started and they are not on the budget for 2016.

“We did not design the budget for a specific (political) party or person. And not for a specific party or constituency did we include some projects. Some projects are there, evaluated by Tender Board that are cancelled. We have to reduce spending too.” Finance Minister Jihad said.

He said that it is being done not only in the Maldives but in other countries as well.

“In a foreign country, I’m not going to say it’s name, their budget increased from USD 23 billion to USD 33 billion. Made such a big jump. I asked the high officials of that country what they would do if the income does not meet it. They said they would have to stop some projects and reduce spending. So this is done like this not in Maldives.” Minister Jihad said.

The estimated state budget for the next year is MVR 27.457 billion. Out of which 59 per cent is recurrent spending and 41 per cent is capital while 80 per cent of it is for Public Sector Investment Program (PSIP) projects.

While MVR 22.8 billion is estimated in free aid and income. That is MVR16.8 billion in tax, MVR 3.7 billion non-tax, MVR 1.5 billion in free aid and MVR four billion from the proposed projects to increase income.