Former finance minister Ibrahim Ameer has warned that forcing the Maldives Pension Administration Office (MPAO) to fund government operations, with liquidity injected by the Maldives Monetary Authority (MMA), is a serious policy error that further undermines investor confidence, particularly with Sukuk maturity approaching.
In a statement released on Sunday, Ameer said the current fiscal and economic crisis was entirely avoidable and accused the Muizzu government of abandoning prudent debt management principles. He said waiting until the last moment to seek financing had left the country exposed and weakened confidence among investors and development partners.
Ameer said the use of pension funds to meet short-term government financing needs, supported by MMA liquidity, was a major misstep. He added that a persistent lack of transparency, visible even in routine fiscal reporting, had further damaged credibility at a time when trust was critical.
He contrasted the current approach with debt management decisions taken in 2021, when the previous administration addressed the Sunny Side bond well ahead of schedule. Ameer said proactive liability management at the time allowed nearly USD 200 million of a USD 250 million bond to be retired early, despite the economic impact of the COVID-19 pandemic, leaving only USD 50 million at maturity. He said refinancing options were prepared in advance and accompanied by legal and institutional reforms to strengthen fiscal discipline.
Ameer accused the current administration of weakening debt management institutions, sidelining experienced technical staff, and undermining the authority of the Ministry of Finance for political reasons. He said abrupt decisions taken without proper analysis or consultation had compounded the crisis.
“The government should never have waited until less than two months before Sukuk maturity to seek financing,” Ameer said. He warned that reliance on questionable financing proposals would accelerate damage unless accompanied by credible reforms and the restoration of professional debt management.
His remarks come amid a series of resignations at the Pension Administration Office over a controversial MVR 2.4 billion bond plan involving pension funds and the MMA.
Former Maldivian Democratic Party (MDP) chairperson Fayyaz Ismail also criticised the plan, warning on X that the Muizzu government was heading towards distress borrowing. He said markets were likely to demand interest rates of 14 percent or higher for future borrowing, reflecting rising risk and policy uncertainty.
The chairperson of the Pension Administration Office, Ahmed Inaz, resigned on Sunday, citing concerns over what he described as illegal money creation using pension savings. Two other board members, Ashraf Rasheed and Ahmed Sarvash Adam, have also stepped down, along with the office’s chief finance officer, Hawa Fajwa.
Inaz said repeated discussions failed to resolve his concerns and that the bond plan did not offer a sustainable solution as state finances deteriorate. Critics argue the structure amounts to indirect money creation and risks long-term damage to the pension fund and the wider economy.
Ameer said the most troubling aspect was the government’s failure to grasp the seriousness of the situation, warning that without immediate course correction, the country would continue to pay the price.