Finance Minister Denies Political Purges Amid State Company Right-Sizing Efforts

Finance and Public Enterprises Minister Hassan Zareer has assured the Maldivian Parliament that employees of state-owned companies will not be dismissed based on their political affiliations or views during ongoing efforts to right-size the public sector. Addressing concerns raised by Galolhu North MP Mohamed Ibrahim, who alleged that employees affiliated with the Maldivian Democratic Party (MDP) were being unlawfully targeted, Minister Zareer clarified that the government has no policy of political dismissal. He emphasized that the Ministry has not issued any instructions to state-owned enterprises to target staff based on political beliefs. The Minister framed the restructuring as a financial necessity, noting that the Maldives' public sector is disproportionately large compared to developed economies. Currently, over one-third of the population is employed in the public sector. To illustrate this growth, Zareer cited Privatization and Corporatisation Board (PCB) statistics showing that staffing in state-owned companies surged from 18,676 at the end of 2018 to 41,667 today. Zareer stated that redundancies will be based on performance and operational requirements rather than political identity. He explained that the process focuses on comparing an employee's actual output with the requirements of their role, particularly targeting positions created during previous periods of aggressive hiring. To mitigate the impact of these redundancies, the government has launched a USD 38.9 million fund called "Kumevi," administered through SME Digital. This initiative is designed to help displaced workers and those who voluntarily leave government service start their own businesses. The Minister noted that the Business Center Corporation (BCC) will provide technical support to applicants in developing business proposals to access this funding. By encouraging self-employment and entrepreneurship, the government aims to reduce the financial burden on the state budget and move toward a more sustainable economic model, shifting the workforce away from a heavy reliance on government institutions.