MALE, September 12, 2011 – The World Bank and the Government of Maldives recently signed a grant agreement of US$ 12 million in additional financing to strengthen the pension and social protection systems in the Maldives. This International Development Association (IDA) Grant will build on results and lessons learnt from the Maldives Pension and Social Protection Administration Project (PSPA), which has been effective since 2009.
“I am happy to note that the Maldives Pension Administration Office (MPAO), which was created under this project, administers approximately 80,000 individual pension accounts today and is educating the public on pensions” said Diarietou Gaye, the World Bank Country Director for Sri Lanka and the Maldives. “Strengthening institutions and raising public awareness are two components of this project that can help the Maldives become a lead country in good governance practice in Social Protection” said the Country Director, explaining the potential of this project to reach a wide area of social protection initiatives beyond pension schemes.
This additional grant will help finance the costs associated with the provision of technical assistance to strengthen the Capital Market Development Authority (CMDA) in its role as pension supervisor among other functions. It will also support the development of a targeting system to focus the limited budgetary resources on the poor, assistance in the area of disability coding and benefit administration, the development of systems to deliver health insurance and the establishment of a transparent system of accounting and paying out of the pension liabilities.
Employers, workers and senior citizens are the target groups of the public awareness campaign carried out through the Maldives Pension Administration Office (MPAO). Employers will learn about their contributory obligations, workers’ knowledge on their rights and benefits will improve and senior citizens will learn about the mechanisms for claiming basic pension.
“Through the project, the Government has been providing support to the development and roll-out of the new Public Accounting System (PAS) for Government entities to make public financial management more transparent and efficient” said Oleksiy Sluchynskyy, Senior Economist and Task Team Leader (TTL) for the project. The TTL also noted that the additional financing will effectively expand the scope of the project recognizing new Government initiatives towards reforming its health insurance program and putting into place appropriate mechanisms for determining eligibility and for delivering benefits under various social protection programs.
The project is consistent with the Bank’s Country Assistance Strategy objective of improving social protection, which is critical for both human development and long-term fiscal stability.