Minister of Finance and Public Enterprises Hassan Zareer has said employees of state-owned companies will not be dismissed on the basis of their political affiliation or views as part of efforts to right-size the companies.
The Minister made the remarks in Parliament while responding to a question from Galolhu North Constituency Member of Parliament Mohamed Ibrahim.
The Parliamentarian alleged that employees affiliated with the Maldivian Democratic Party (MDP) were being warned and unlawfully dismissed from state-owned companies. Responding to the allegation, Minister Zareer said it is not Government policy to dismiss employees of state-owned companies because of the political party they are affiliated with or the political views they express. He added that the Ministry has not issued any such instruction to state-owned companies.
As the institution representing the Government’s shareholding, the Ministry has a responsibility to ensure that companies remain financially and operationally sustainable, the Minister said. In view of the State’s financial situation, guidance has also been issued on several occasions through the Privatization and Corporatisation Board (PCB) to strengthen the operations of the companies.
Minister Zareer said that, apart from such policy directions, the Ministry has not instructed state-owned companies to reduce or dismiss employees, or issued specific instructions concerning any other aspect of their day-to-day operations.
Comparing the Maldives with developed countries, the Minister noted that the proportion of the population employed in the public sector in those countries is considerably lower, while more than one-third of the Maldives’ population works in the sector. He said this is an issue that needs to be addressed and that the Maldivian economy must be managed in line with the way other countries manage their economies and brought to a more sustainable position.
The Minister said that during the right-sizing process, many of those who become redundant would be employees recruited during periods when large numbers of staff were hired. However, he stressed that the process would not be carried out by targeting employees on any particular basis, but by comparing the work an employee performs with the work required of that employee.
He added that employees made redundant would not simply be left without support. Instead, opportunities would be provided for them to work and earn an income.
Citing PCB statistics, Minister Zareer said the number of employees working in state-owned companies increased by 100 per cent during the previous MDP Administration. At the end of 2018, 18,676 employees were working in the companies, while the figure had risen to 36,729 by the end of 2023. The number currently stands at 41,667.
The Minister said the Government will continue its efforts to improve the financial position of state-owned companies and reduce their dependence on the State budget.
Government sets up fund to help redundant workers start businesses
A special fund has been established to help employees dismissed from state-owned companies under the Government’s right-sizing efforts start their own businesses, Minister of Finance and Public Enterprises Hassan Zareer has said.
Speaking in Parliament, Minister Zareer said decisions to dismiss employees from state-owned companies are being made after identifying alternative opportunities for those affected.
Minister Zareer said measures have been planned to support employees leaving state-owned companies as they are right-sized to strengthen their financial position, as well as employees who voluntarily leave Government employment.
As part of these measures, a USD 38.9 million fund named “Kumevi” has been established through SME Digital. The Minister said the fund provides an opportunity for employees leaving or being dismissed from their jobs to start new businesses.
Minister Zareer said funding would be allocated after assessing proposals submitted by applicants. He added that the Business Center Corporation (BCC) would assist applicants in preparing the proposals required to obtain loans.
The Minister said the USD 38.9 million fund is intended to facilitate financing for small businesses and individuals seeking to start new businesses. He said the facility was introduced through SME Digital so that individuals wishing to become self-employed could submit proposals and access funding.
Minister Zareer also clarified that the money allocated to the fund consists of funds already held by SME Digital.
He said the initiative forms part of the Government’s policy to expand economic opportunities as state-owned companies undergo restructuring to ensure their financial and operational sustainability.
Minister Zareer added that the policy would broaden opportunities for young people to establish their own businesses and earn an income, rather than relying on employment in Government institutions and state-owned companies.