Finance Minister Abdullah Jihad has said the debt management methods between Maldives and World Bank were different.
He made the statement speaking to press in the President’s Office.
Minister Jihad said World Bank had defined sovereign guarantees given by the state as loans, but that they would only become loans when they were defaulted. He denied the statements that the private sector was being narrowed, stating the Government only wanted to broaden the private sector.
Minister Jihad attributed the high recurring costs to the high cost of providing services in a country where the population was scattered across a large area, inaccessible by traditional forms of transportation. He said that Hulhumale’ was being developed as a hub to address the issue.
He added that reserves had decreased as MMA had passed to lower the minimum reserve rates to 10 percent from 25 percent. Jihad said major projects will also make an impact on the minimum reserve, noting that it was not an issue when the returns will be plowed back to the economy.
Jihad said that in spite of the lowered reserves, the Government had not defaulted on any loan payments. Therefore, he argued that there was really no room for concern. He said the Government was aimed towards increasing the reserves, adding that the ongoing and planned mega projects were required to generate the required earnings.