(MENAFN- The Peninsula)
AFP
Malé, Maldives: The president of cash-strapped Maldives will take a 50-percent pay cut as part of an austerity drive that will see public sector salaries reduced to prevent a debt crisis in the tourist hotspot, his office said Thursday.
Mohamed Muizzu is introducing a mandatory 10-percent pay cut to most public sector jobs, leading the belt-tightening with the biggest salary reduction, his office said in a statement.
A government source told AFP that Muizzu's annual salary will be reduced to 600,000 rufiyaa ($39,087) from next year -- down from 1.2 million rufiyaa but nearly double the average household income of 316,740 rufiyaa per year, according to a 2016 census.
Judges and lawmakers in parliament will be exempt from the cuts, though Muizzu's office said he expects them to share the burden by agreeing to a 10-percent cut voluntarily.
Two weeks ago, Muizzu sacked more than 225 political appointees, including ministers, in a bid to reduce the tiny atoll nation's expenditure.
Among those sacked were seven state ministers, 43 deputy ministers, and 178 political directors. The move is expected to save the country about $370,000 a month.
The Maldives said in September that its financial troubles were "temporary" and that it had no plans to seek an International Monetary Fund bailout, despite warnings of a possible sovereign default.
Known as a luxury holiday destination with pristine white sand beaches and secluded resorts, the Maldives has also become a geopolitical hotspot.
China and India are the two largest bilateral lenders to the Maldives, which is made up of 1,192 coral islands scattered across the equator.
China has pledged more funding since last year's victory by Muizzu, who thanked Beijing for its "selfless assistance" in providing development funds.
Muizzu was welcomed in New Delhi this month by Indian Prime Minister Narendra Modi, who rolled out financial support to bolster Male's struggling economy.
Official data showed the Maldives' foreign debt at $3.37 billion in the first quarter of this year, equating to around 45 percent of its gross domestic product.
China accounted for about 20 percent of the external debt, while India owned just under 18 percent.
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