State-owned enterprises are being directed to reduce spending as authorities move to limit the economic impact of ongoing disruptions linked to the Middle East conflict.
The Privatization and Corporatization Board (PCB) has issued a circular instructing SOEs and their subsidiaries to implement cost-control measures, with a particular focus on employee-related expenses and operational efficiency. The directive requires organisations to contain salary and benefit costs, while ensuring that work is completed within standard hours. Overtime is to be limited to tasks that cannot be carried out during regular working periods.
The measures include an immediate halt to staff promotions and restrictions on recruitment, allowing hiring only for essential roles needed to sustain core functions. Companies have also been asked to strengthen cash flow management and address rising salary-related obligations in light of current economic risks. Spending is to be confined to necessary costs tied directly to institutional mandates, as outlined in their governing documents.
SOEs are further required to assess how the Middle East conflict could affect their operations and finances, and to prioritise actions that reduce potential strain on public resources. Non-essential events and ceremonies have been cancelled, with entities encouraged to share resources where possible to lower costs.
The latest directive builds on an earlier circular issued on 30 March, which introduced additional restrictions on expenditure. These included suspending non-essential overseas travel, shifting engagements with international partners to online platforms, banning business class travel for official trips, and limiting expenses even for travel funded by third parties. Overseas training programmes have also been replaced with virtual alternatives.
The move comes despite earlier indications from President Dr Mohamed Muizzu that further cost-cutting measures would not follow the elections.
Separately, the Ministry of Finance has also called for tighter expenditure controls across state institutions. In response, several entities, including the Maldives Industrial Fisheries Company and the Prosecutor General’s Office, have begun implementing similar measures.
