Doubling salary spend in 2007-09 crippled economy: World Bank
26 May 2010, 5:12 PM
An internal World Bank bank report produced for the donor’s conference, called ‘Placing the Macro Challenge Facing the Maldives in Context’ has revealed the full extent of the economic challenge facing the country.
“The Maldives faces the most challenging macroeconomic situation of all democratic transitions that have occurred since 1956,” the report claims, noting that the full level of financial strife “may not be fully appreciated.”
In terms of GDP growth rate the Maldives is in the lowest 10 percent of the distribution of all transitions, and in terms of public sector deficit, the Maldives faces the worst situation of all previous democratic transitions.
Under the heading ‘How did the Maldives get into this situation?’, the World Bank report notes that “the origin of the crisis is very clear… the wage bill for public sector employees grew dramatically in a very short time.”
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