[އިކޮނޮމިކް ޑައިލޮގް ވިތު ދަ ޕްރެޒިޑެންޓް]ގެ ނަމުގައި ބޭއްވެވި ޙަފްލާގައި، ރައީސުލްޖުމްހޫރިއްޔާ ޢަބްދުﷲ ޔާމީން ޢަބްދުލްޤައްޔޫމް ދެއްކެވި ވާހަކަފުޅު

Hussain

My name is Hussain . We all agree that our economy is growing each year at the same time it is a known fact there is a serious issue of income inequality in this country. In your view, do you view income inequality as a serious issue in this country? If so, how do your policies intend to address this?

President Yameen

Hussain, thank you for posing this question. For me it is not a serious threat, but certainly it is something that we need to contend with. If unattended for a long time it will have serious repercussions on our economy. But for me, income inequality, for example, is a factor of economic activity. The way to reduce the difference between different income groups or income disparity is through taxation and also through welfare programs. At this point in time, for Maldives, the biggest problem is not income disparity. The biggest challenge really is how to raise your revenue and how to raise your resources.

If you look at Maldives right now, targeted subsidies, general subsidies, and very highly subsidized health bills or healthcare systems, highly subsidized education system. All of this, if not for Maldives, in a first world country parents of school children would be paying heavily, so getting a low income necessarily does not mean that person is impoverished. All of the welfare programs we run with this government, all of them are year by year enhanced. If you look at basic staple items like rice, wheat, flour and sugar; whether you earn a lot or whether you don’t earn there is no duty on that. It is subsidized, rice, wheat and flour that you eat, that you consume. If you look at health services, for example, highly subsidized. Highly subsidized health services, if you talk about the health bill you have to foot if you are admitted to a hospital for 15 or 30 days, compare that amount to first world countries, you will see the enormous benefit of living in Maldives that you obtain from the welfare system.

If you look at education system, for example, highly subsidized. All public schools and government schools, nobody pays any fees on that. Highly subsidized. All over Maldives Pre-school education is free, totally budget funded.

So a lot of areas where normally a person would spend through his income he does not need to spend. So yes, income disparity is a problem that we need to contend with but at this point in time my government does not believe it is a threat or that even we are allergic to it. Thought provoking yes, at times it gives me tax, but then no, it is not a threat. We are circumventing this through various social and welfare programs, several of which I have mentioned in my speech and in answering you, for example I have mentioned several heavy subsidies. The way to reduce income disparity is for example through empowering youth, by providing job opportunities. If all youth in Maldives for example were employed by 2020 income disparity is gone in no time. So income disparity in itself, while it may be a problem, if there are ways to address it which my government is very clear, in our targets, we will not have a serious problem with income disparity.

Yes in every country you will have the ‘Gasims’ and the ‘Champas’ but then that is not an issue. You will always have entrepreneurs who will be doing a lot better than the average person but the way to reduce income disparity is through taxation, which we are doing even now. And heavily subsidized spending on health, education and even basic food commodities, this is the way to alleviate income disparity at this point in time. Even those households who are not able to pay electric bills we are giving them targeted subsidies. Rice, wheat, flour and other items, even if the prices of these were to go up, targeted subsidies, you will come and knock on the door of the National Social Protection Agency. And those subsidies go a long way to alleviate your income disparity issues. So for me while it may be a problem if unattended, at this point in time it is not a threat. Thank you.

Aiman

Asalaamalaikum. My name is Aiman. I am from an engineering background but I do take an interest in the economic issues in the country. My question to you is are there any structural economic challenges facing our economy today? And what are those issues? And how does the government intend to address those issues?

President Yameen

Thank you. Problems, yes. Who is without problems? Everybody faces problems. At individual level, at parent level, in parenting itself, and even at the government level, certainly we all face challenges. Main problems being really what is endemic to our economy, we are not an exporting country. Our export base is very narrow. The tax base is narrow. And ways to increase revenue is certainly very narrow, I was talking about the trade account deficit we have been sustaining for a long time and probably that is going to exist for a long time to come. The way to overcome that is through economic diversification through more and more projects that would be earning foreign currency. Like the SEZ projects we are talking about and like increasing tourist islands in the Maldives.

Other challenges include living for example living in Male’ and living in Maldives while it may be expensive we are basically taking life very easy. In economics there is a cliché that says that ‘There are no free lunches’ but we enjoy free lunches in the Maldives. Everything is subsidized. It is almost a welfare state.  So the text book economics we defy, so in the economics of Maldives everybody has a very easy life. The result of which is really that the youth are voluntarily unemployed. This is not what we would like to see in a growing economy like Maldives.

Minister Saeed is creating jobs for youth to get engaged, for you guys to take up those jobs. But if you voluntarily restrain from those jobs, those jobs end up with our neighbors. That is not the policy direction we are seeking. The easy life really, voluntary unemployment, huge huge labor turnout if you report to a job. These are major problems as far as job market or employment is concerned. Other problems include various other issues such as cost of living in Maldives is very high. I was talking about inflation and I was talking about imported inflation from other countries. Basically from the toothpick to the shampoo you use you import, but what do you export? Fishery items and largely tourism. And therefore cost of living in Maldives and especially in Male’ is very high. So that is the basic challenge. Whether or not we are able to net the difference from what we earn and what we need to spend on. That is the challenge we face every day and every year in our budget.

Sustained deficits over the last 7 or 8 years amounting to over 40 billion MVR or 4 years of national income. This is a huge task that my government needs to resolve. We are addressing that issue and hopefully by end of next year if I were present before you happily I would be saying yes this year we are ending with a surplus budget. That is my dream. That has been our vision since we came into office. We face various challenges and the way to address these in the long term, right now and medium term. Right now what are we doing? Like the program we introduced and launched tonight. Youth empowerment, youth job creation, youth entrepreneurship, creating the youth farmer, creating the youth entrepreneur, loan facilities and incentive programs. These are ways to empower youth through economic wellbeing or through economic empowerment to youth.

Other immediate issues we are attending to such as economic diversification, creating 94,000 jobs within 5 years. Maybe in economic planning this may be considered mid-term. But for me this is an immediate way of attending to the difficult problems we have. Job creation is of utmost importance if we are to empower youth. Longer and medium term issues include, you are talking about disparities and you are talking about empowering youth with marketable skills, can they come out and work? People who graduate now through TIVET and people who graduate from Villa College do they have dependable jobs? Yes we will create jobs. But whether or not they have the marketable skills for these jobs, this is something we need to question. Quality schooling or quality education is primarily targeted at providing these kinds of marketable skills. That is why we are emphasizing so much now on commerce, law and other faculties that would immediately provide job opportunities once you leave your universities. So that would be a longer term challenge that we will be addressing. Another longer term challenge we will be addressing is health issues.

Subsidies and welfare cannot be sustained for a long time but the way to address this is quality health care at an affordable rate through medium and long term population consolidation. If you are able to resolve this problem, I am sure you will be a Nobel Laureate, you will get a Nobel prize. 185 islands in this nation archipelago, everyone is a self-contained economic unit so how do you provide equal opportunities, job opportunities, health facilities, education facilities for each and every one of these distant islands? And not only distant but the population is so diverse. From 200 people on an island to all the way to 15000 people, or medium size islands with all the way from 3000 to 5000, huge challenges. But are people willing to move from these locations to more attractive locations? This is where the Youth City in Hulhumale’ comes in. This is why my government is dumping tons and tons of money into fulfilling this dream. My hope is really then that through economic pull effect  I am able to get a lot more vigorous youth who can be gainfully employed to Male’ and Hulhumale’ area. That would ensure each and every one of you a job opportunity. So the longer term process would be through population consolidation, quality education where you get marketable skills and also through excellent affordable healthcare. Otherwise we are spending millions presently on healthcare specially people going abroad for treatment. These areas where you can arrest lots of foreign currency draining out of Maldives. So yes huge challenges we face. But if we don’t face challenges in life we can lie down and sleep for long long years to come. So challenges we must face. Challenges we must overcome. Life is not easy, life is difficult. That is why every one of you, every young person should be ready once you leave school to take up employment. That is the only way you can contribute to nation building process.