Former president Abdulla Yameen Abdul Gayyoom, citing that the government’s debt to private companies exceeds MVR 2.3 billion and that debt will not be settled, states that money is being printed because there are insufficient funds to pay salaries.
The government, which has high debt burdens looming over its head, owes billions in Maldivian Rufiyaa to private companies.
Meanwhile, last week, the board of Maldives Pension Administration Office (MPAO), approved a decision to sell a government bond in the secondary market in collaboration with the central bank, the Maldives Monetary Authority (MMA).
Senior government officials, in unofficial capacity, have confirmed MPAO board’s approval to sell an MVR 2.5 billion government bond in the secondary market through MMA. However, the Finance Ministry has yet to disclose any information regarding the matter through official means.
Some local media, citing a senior official from the Finance Ministry, have linked the transaction to President Dr. Mohamed Muizzu’s recent pledge to settle MVR 2.3 billion in outstanding payments by the government to private contractor within 10 days.
The move has drawn concerns from the opposition and economic experts, including Yameen, who has alleged that MMA is investing MVR 2.5 billion in the pension fund and then having the Pension Administration Office invest the money in a government bond – something that he warned is the same as money printing.
Former president Abdulla Yameen Abdul Gayyoom speaks at a PNF meeting. (Sun Photo/Moosa Nadheem)
Yameen, speaking during his party, PNF’s serial townhall meeting on Thursday night, Yameen said unpaid dues to private companies cannot be settled by printing MVR 2.5 billion as per statistics, as the unpaid dues by the government to private companies stand at MVR 14 billion and not MVR 2.3 billion, as stated by the President.
[It [MVR 2.3 billion] does not account for even a fraction,” he added.
“Because of the heat, they are just claiming they are trying to pay off unpaid dues to private sector contractors. This is not the real purpose. This will not be done either,” he stressed.
Yameen shared some statistics on the government’s debt burdens. In this regard:
MVR 14 billion owed to private companies
MVR 20 billion owed to state-owned companies
MVR 32 billion in total debt without counting minor debt burdens
The former president alleged that the money was being printed because of insufficient funds to pay salaries.
“Because there is nothing else that can be done. It is being done as it is the only quick fix for the issue,” he added.
Notably, Finance Ministry has withheld the details of unpaid dues by the government to private contractors following a request by Sun under the Right to Information Act.
Yameen further said the MVR 2.5 billion being printed by the government is a small amount in terms of a government. However, with MVR 32 billion in debt and no way of securing foreign aid, the former president described moving forward with money printing as the last resort.
Earlier, Yameen alleged that the MMA is using money in the state reserves to purchase a fiscal tool from MPAO, and not money that is already in circulation. He warned that releasing this money into circulation would have the same effect on the economy as printing new banknotes and releasing it into the economy.
Saruvash Adam, a board member of MPAO, resigned from the board on Wednesday, over e board’s decision to proceed with the MMA transaction. 
Saruvash, who has extensive experience in the field of finance, said the transaction raises serious legal, fiduciary and economic concerns.
Money printing poses significant economic risks such as increased inflation and devaluation of Maldivian Rufiyaa against US Dollar.