Summary
State-owned enterprises employ 41,667 people, more than double the 18,676 of 2018, and the Privatisation and Corporatisation Board has ordered every SOE to cut headcount by 33 percent against end-February 2026 levels, deadline 13 October 2026. The cuts are contested: in Addu, dismissals at Fenaka range from about 90 to 189 depending on the count, and the mayor alleges political selection.
Why it matters
SOE payrolls and guarantees are a major fiscal drain, and SOE debt sits behind MVR 19.1bn of government guarantees. Finance Minister Hassan Zareer told parliament 53 percent of Maldivian employment is in the public sector. For the Tourism Industry, the SOE burden is part of the spending that drives the Dollar Shortage and the revenue measures aimed at resorts, and utilities like Fenaka and the State Trading Organisation supply the islands resorts operate among.
Current situation
PCB Circular 4 (8 April 2026) ordered SOEs to stop functions, overseas travel and business class, and froze recruitment. Circular 8 (12 July) ordered the 33 percent cut, with headcount reported to the Finance Ministry every Sunday. Enforcement is asymmetric: MTCC added 170 staff between end-April and end-July, the state has awarded MVR 102.16m of football grounds since ordering councils to suspend sports events, and 2025 ceremony votes overran their budgets. Fenaka dismissed Addu staff on 13 August; Mayor Ali Nizar named three PNC MPs as directing the list, which Minister Zareer denies, saying staffing decisions “remained with the companies”. Dismissed staff have filed Employment Tribunal cases. A MVR 600m Kumevi Fund has been set up to lend to those leaving state jobs.
Key data
| Indicator | Value | As of | Trend |
|---|---|---|---|
| SOE headcount | 41,667 | Aug 2026 | Up from 18,676 in 2018 |
| Mandated headcount cut | 33% vs end-Feb 2026 | Deadline 13 Oct 2026 | In progress |
| Fenaka Addu dismissals | about 90 to 189 (contested) | 13 Aug 2026 | Disputed, unpublished |
| MTCC staff | 6,649 (from 6,479 end-Apr) | end-Jul 2026 | Rising despite freeze |
| Kumevi Fund | MVR 600m | Aug 2026 | New |
| Government guarantees (largely SOE) | MVR 19.1bn | Q2 2026 | Contingent liability |
Drivers
- Fiscal pressure: the state cannot carry a doubled SOE payroll alongside record debt service.
- Political employment: SOE jobs used as patronage, now cut along contested lines.
- Asymmetry between austerity ordered downward and spending the centre continues.
Impact
Island economies dependent on a single SOE employer lose incomes in bulk; Addu alone may have lost over 100 Fenaka wages in one round. The credibility of state institutions is under parallel strain: the MNDF gave its first on-record depth figure for the sunken vessel Friend 4 (1,600 metres, chances of recovery “slim”) only 16 days after the 5 August sinking. Poorly documented cuts feed protest, tribunal cases and political risk that ultimately touches the operating environment for Resorts.
Related topics
- Government Fiscal Position
- Fenaka
- State Trading Organisation
- Ministry of Finance
- Sovereign Debt
- Maldives Economy