Parliament initiates efforts to dismiss Maldives’ central bank chief

The Public Accounts Committee has passed a motion counselling the Parliament’s speaker, Abdul Raheem Abdulla, to recommend to President Dr. Mohamed Muizzu to dismiss Ali Hashim, the governor of the Maldives Monetary Authority (MMA).

The motion was submitted by Ahmed Nazim, the deputy speaker of Parliament, and representative of the Dhiggaru constituency. He has accused Hashim of failure to perform his duties as the head of the country’s central bank.

At the committee meeting held on Monday afternoon, Maamigili MP Qasim Ibrahim, the committee’s chair, announced that the motion passed with the vote of all members in attendance, except for one.

He did not mention specific figures.

At the meeting, Nazim said that Hashim had failed to execute his duties as the governor of MMA – repeating similar sentiments he had expressed earlier on Monday, during the preliminary debate held at the floor on a fiscal responsibility bill submitted by the government.

In a paper submitted to the committee, Nazim stressed that there were two types of policies crucial to a country’s economy; fiscal policies and monetary policies.

He said that while the responsibility for deciding fiscal policies lies with the government, it is up to the governor of the central bank to set monetary policies.

“In addition to failing to produce the results mandated by law, I do not see the monetary policy – one of the fundamentals of the MMA – functioning effectively either,” he said.

 Nazim said that Hashim recommended indirect measures to control the issuance of bank loans and for banks to maintain reserves at a certain limit. He said that it had reduced the amount of money circulating in the economy. Nazim added that he does not see MMA properly regulating the domestic market, which the government is now seeking funds from.

Nazim said that the police and Home Ministry had also complained about MMA’s failure to update its regulations, which it said was posing challenges to fighting crime.

Nazim proposed recommending Hashim’s dismissal, in accordance with the Maldives Monetary Authority Act.

Article 6 of the Act states that both the governor and deputy governor of MMA shall be appointed by the president, under advisement of the Parliament.  

As such, Monday’s decision by the committee will be announced by the speaker at the floor. Hashim will receive five days to prepare a response.

However, Nazim said that Hashim is currently on vacation in Singapore, and is set to return home on July 7. He said that according to the Parliament’s secretary general Fathimath Niusha, if the speaker announces the no-confidence motion on Tuesday, then the Parliament can summon Hashim on July 11 and make a decision.

Hashim was appointed as the governor of MMA on September 8, 2019, during the Maldivian Democratic Party (MDP) administration, which held office from 2018-2023. He also served as finance minister from 2008-2010 during the first MDP administration.

At Tuesday’s committee meeting, Eydhafushi MP Ahmed Saleem said that Hashim’s record during the last five years as well as his previous time as finance minister proves he is not fit for the job.

“He was unable to manage even a small shop and had to shut it down,” said Saleem.

“The country is not facing a normal situation. That place [the MMA] should have capable individuals, and people who are also physically fit to do the work.”

President Dr. Mohamed Muizzu had announced the roll out of measures last week to cut the state’s recurrent expenditure, including reducing the number of political appointees, and reducing the spending on or cancelling official events.

One upcoming event the president has decided to cancel is the Independence Day reception and parade.

Also last week, Erdem Atas, the World Bank Country Economist and Resident Coordinator for Maldives, said that the economic vulnerabilities that the Maldives now faces is a combination of debt stock accumulation in the last 10 years, as well as continuously high fiscal and current account deficits over the same period.

He said that economic growth or additional financing cannot resolve the issue, and that expenditure cuts are necessary to reduce fiscal and current account deficits, which will primarily support central bank’s reserves, and help improve the debt situation in the medium-term.

He also expressed appreciation for the government’s efforts on fiscal reforms.