Backup fund to be made to be used when projects run low on funding

Government has decided to form backup fund to be used as a buffer in situations where major projects in the country face financial trouble.

Speaking at a function by MIRA and the Organization for Economic Cooperation and Development-Korea, the Minister of Finance, Ahmed Munawar said that the government has decided to form a Sovereign Development Fund.

The Finance Minsiter said that if such a fund has been established, the Maldives can get funding without being in debt due to major projects and it would make it easier to find investments, loans and more funding in relation to projects.

Minister Munawar said that the Foreign Direct Investment has gone up to 12 percent of the GDP after the Presidency of Abdulla Yameen Abdul Gayoom took effect and it is the highest in the region.

He said that to assure the investors of the state of the Maldives, the government has decided to create a Sovereign Credit Rating as well.

With a Sovereign Credit Rating in the Maldives, a Credit Rating Agency would rate the country after reviewing political risks and other factors based on the financial and political state of the country.

A Sovereign Credit Rating is important for a developing economy to acquire funding from major international markets.

Finance Minister Munawar said that an exercise of the procedure has been done with Moody’s Investors Service already.

Moody's Investors Service is one of the top three credit rating agencies in the world.