The President of the Maldives, Mohamed Muizzu, has announced a 50% reduction in his salary as part of an austerity plan aimed at curbing a looming debt crisis in the nation, which is known for its luxury tourism industry. Muizzu’s office confirmed that public sector salaries would also be affected, with most government employees facing a 10% mandatory pay cut.
A government source revealed that Muizzu’s annual salary will drop from 1.2 million rufiyaa to 600,000 rufiyaa (approximately $39,087) next year. However, this reduced amount is still almost double the average household income, which was recorded as 316,740 rufiyaa in a 2016 census.
Despite the sweeping cuts across the public sector, judges and members of parliament will be exempt, though the president’s office has expressed hopes that they will voluntarily accept a 10% reduction.
This austerity initiative follows Muizzu’s decision two weeks ago to dismiss over 225 political appointees, including seven state ministers and 43 deputy ministers. The terminations are expected to save the Maldives approximately $370,000 monthly.
The country’s economic troubles became evident in September, though the government insists they are “temporary.” The Maldives, which carries foreign debt amounting to $3.37 billion — roughly 45% of its GDP — has so far avoided seeking a bailout from the International Monetary Fund (IMF).
Both China and India, the Maldives’ largest bilateral lenders, have extended support, with China pledging more funds following Muizzu’s electoral victory, and Indian Prime Minister Narendra Modi offering financial assistance during Muizzu’s visit to New Delhi earlier this month.
