Maldives—Public Financial Management

The Public Financial Management activity assists the Government of Maldives to prioritize infrastructure projects with the highest returns to the economy, enhance domestic resource mobilization, and realize “win-win” public-private partnerships in infrastructure to reduce dependence on high-risk debt financing.

The project supports ministries to adopt performance-based budgeting, engage the private sector and civil society to promote transparency and accountability in public contracting and integrate gender into public finance reform.

By the end of the program, Maldives will have the fiscal space and management capacity to effectively and transparently implement President Solih’s Strategic Action Plan (SAP). Public revenues will be steadily increasing, budgets will be better planned and tied to strategic objectives, and public investments will be based on sound analysis and prioritization, resulting in better public services and measurably improved commitment to and capacity for self-reliance.

Sample Activities

• Support the Ministry of Finance with a comprehensive roll-out of performance-based budgeting to all ministries.
• Support the Government of Maldives as they put policies and procedures in place to create “green budgeting.”
• Evaluate procurement processes for capital projects and re-engineer processes to align public contracting with current law and international open contracting standards.
• Increase transparency and bottom-up accountability by incorporating public engagement, including by atoll councils, women’s development committees, and private contractor associations.

Select Results

• Enhanced the country’s transparency, system design, monitoring, and auditing processes to reduce corruption and improve integrity in the overall budgeting process. More than 530 government staff were involved in formal capacity building to increase the effectiveness in managing public finances.
• Trained more than 100 government officials on project feasibility methodologies.
• Developed awareness and familiarity for 491 government officials in budgeting for new project initiatives.
• Compiled a macroeconomic chapter on higher education spending for the Budget Book of the Maldives, a key publication of the Ministry of Finance.
• Finalized a comprehensive analysis of the impact of government debt on the accessibility and availability of bank credit to the private sector and its other effects on the national economy. The analysis recommended that the government formulate consecutive, evidence-based annual development strategies to reduce public debt and support a competitive bank-credit market to stimulate lower rates and increase the number of private borrowers.