Austerity measures for prosperity
The month of March was supposed to be continued with the same levels of energy you had in January. But again, so much has changed that it becomes difficult to find out where to begin. Nevertheless, an economy should find its way for survival and that’s where I want to fit in the policy makers to this puzzle.
We have walked the talk but continue to forget what austerity is. These are the policies used by governments to reduce budget deficits during economic hardships. Thinking beyond, we should be expecting government changing its behavior by bridging the gap between the government revenue and expenditure.
There’s a new meaning to austerity amongst natives here in the Maldives. It is the frequent situation where the government spending in social needs, subsidies and civil servant salaries are put under pressure, resulting in unexpected deductions.
But again, that may not be a very bad situation. Everything else remains the same. Unplanned expenditure, or let’s put it right, these are the situations where the government engages in activities which may not necessarily contribute for socio-economic development. In many instances the price we have to pay for such situations are beyond imagination. Pop goes the whistle - an austerity measure becomes a stranger to policy makers.
Let’s ask ourselves, what has gone wrong? We live in an island nation where the population is fewer than 400,000. Our population is scattered throughout the country with the highest concentration in the capital city, Male’. Traditionally, our economic activities were reliant on fishing and tourism industry. But we have always engaged in activities relating to arts and crafts, agriculture, transportation and aviation since 1970s.
Interestingly, all these activities were carried out with the involvement of Maldivians. At times where we talk about austerity, there should be an emphasis on domestic economic activities and incentivizing the private sector. It will only bring austerity for prosperity.
What’s radical for economic recovery is incentivizing the private sector. Then we are looking at thriving activities in the Aviation Industry, Construction Industry, Craftsman Industry, Fishing Industry, Finance Industry, Tourism Industry and the Transport Industry.
Ms. Mariyam Visam is Director General at the of the Capital Market Development Authority with direct responsibility at the Pension Supervision Department which include effective supervision of the Maldives Retirement Pension Scheme and the pension industry.
She is an enthusiastic advocate of instilling Good Corporate Governance practices into the fabric of corporate culture and an ardent supporter of budgetary discipline and financial responsibility.