Debt Dilemma and a $5.3 Million Party: Have We Forgotten Our Priorities?

While the Maldives is planning to celebrate its new airport terminal with a lavish function, staggering national debt reveals a nation with questionable financial priorities.

As we prepare for Independence Day, the opening of Velana International Airport (VIA)’s new terminal stands out as the most vibrant event. This achievement is undoubtedly iconic, promising a lasting positive impact on our tourism sector and the broader economy to some extent. It's an accomplishment we should absolutely celebrate. But at what cost?

Information from trusted sources within the Maldives Airports Company (MACL) indicates an expenditure of nearly USD 5.3 million (MVR 105 million) for the new terminal's opening ceremony and celebrations. Given our current financial state, are we truly in a position to host such a lavish event? Is it a worthwhile investment when our financial health is so bad?

The 2024 audit report of MACL by the Auditor General's office paints a worrying picture: MACL has accumulated a debt of MVR 13 billion over the years, representing 44% of the company's total asset value. Even more disturbing is the revelation that the government appears to be using MACL as a conduit to fund its deficits. Approximately MVR 1 billion was taken as a loan under the guise of corporate purposes, only to be invested in government T-bills. This practice is clearly deteriorating the company's financial standing.

Beyond MACL, our national debt has reached an unsustainable level, almost 127% of our GDP by the end of last year. This year alone, we are obligated to repay over USD 500 million in debt, and next year, this figure is projected to exceed USD 1 billion. These numbers unequivocally illustrate the depth of the trouble we are in. We need to save every cent we have.

In essence, we simply cannot afford to indulge in extravagant fireworks or drone shows of this magnitude simply to inaugurate a terminal. It’s also crucial to remember that a grand, luxurious terminal, while certainly enhancing tourist satisfaction, doesn't inherently translate to an increase in tourist arrivals. There's a significant amount of work required to boost our arrival numbers, far beyond merely spending a substantial sum on a terminal opening.

While securing a new, modern terminal for our international airport is undoubtedly a positive development, we must question the true cost. It took nine years to complete, with the price inflating to approximately USD 457 million in total—a sum we are obligated to repay. Is there a genuine justification for celebrating and holding such a grand, lavish function, effectively "wasting" USD 5.3 million for just one hour?

For me, the answer is unequivocally NO.