Majlis reconvenes with debate on food subsidy cut

Majlis reconvenes with debate on food subsidy cut
October 06 19:03 2016

The People’s Majlis reconvened after a one-month recess today with a majority of MPs calling on the government to reverse its decision to target subsidies after staple food prices doubled overnight in Malé.

All 52 MPs in attendance voted in favour of a motion without notice to debate the price hike as a matter of urgent national concern.

Several MPs of the ruling Progressive Party of Maldives also criticised the government for abruptly enforcing the policy change without consulting lawmakers.

But others defended the move, claiming 40 percent of subsidies are enjoyed by expatriates and tourists and citing longstanding recommendations by international financial institutions to reduce recurrent expenditure.

The government says implementing the International Monetary Fund and the World Bank’s recommendation to target subsidies to the needy is necessary to secure foreign loans for infrastructure projects.

Some PPM MPs said the subsidy cut shows that President Abdulla Yameen is willing to make unpopular decisions for the good of the economy.

Opposition MPs, however, lambasted the government over the subsidy cut, blaming mismanagement and calling on the government to recover funds lost in the country’s biggest corruption scandal.

The Maldivian people do not want development at the cost of “starvation” and falling standards of living, they said.

Some MPs also referred to reports of rent increases in Malé as a result of the price hike.

MPs of government oversight committee meanwhile say they will summon Finance Minister Ahmed Munawwar and Economic Minister Mohamed Saeed over the subsidy cuts.

After the price hike caused a public outcry and sparked protests, the State Trading Organisation, the country’s primary wholesaler responsible for importing the majority of staple foods, said it is exploring ways to reduce prices.

Prices of rice, flour and sugar are even higher in the outer atolls such as the southern Addu City where a kilo of all three staples costs MVR2 (US$0.13) more than in the capital.

Several island councils have put out statements expressing concern over the unaffordable cost of living.

Launching an inquiry into the subsidy cut, the parliament’s government oversight committee meanwhile decided today to summon senior officials of the finance ministry, economic development ministry, environment ministry, STO, the national social protection agency, and the department of national registration.