ADB Chief lauds Maldives' climate change efforts, urges continued fiscal reforms

MANILA, PHILIPPINES: Efforts by the Maldives to tackle the effects of climate change are highly encouraging, but the country must continue with reforms to address its fiscal deficit, and promote inclusive and regionally-balanced growth, Asian Development Bank (ADB) President Haruhiko Kuroda said last week.

An investment plan by the Government to make the Maldives the first carbon neutral country in the world within a decade is commendable, given the island nation's extreme vulnerability to rising sea levels. At the same time, the Government of Maldives must continue with efforts to improve its fiscal management by diversifying the tax base, rationalizing expenditure, improving debt management and enhancing privatization of state-owned enterprises, Mr. Kuroda said.

Mr. Kuroda, who has just completed a two-day visit to the Indian Ocean nation of over 1,100 islands, said ADB will continue to work with the Government of Maldives and support its economic reform measures.

"ADB is pleased to support the Government's reform measures to address the large fiscal deficit.

Recently announced retirement incentives would reduce fiscal expenditure in future. Private sector development, especially promotion of micro- small- and medium-sized enterprises, will further support the Government by creating job opportunities, especially in the outer atolls," Mr. Kuroda said.

Mr. Kuroda, who met President Mohamed Nasheed and Minister of Finance and Treasury, Ahmed Inaz, noted that there was an encouraging rebound in tourist arrivals to the country following the global economic crisis. With sustained reforms, the Maldives economy will recover and grow in the medium term, he added.

The ADB President made field trips to the ADB-assisted Malé Commercial Harbor and Malé North Harbor projects, and addressed students of Maldives National University during his visit.

The Maldives, which joined ADB in 1978, has received loans, grants and technical assistance of $196 million, which support infrastructure, capacity development and expansion of the private sector.