The Maldivian Cabinet has decided to dissolve two state-owned enterprises, the Maldives Integrated Tourism Development Corporation (MITDC) and the Agro National Corporation (AgroNat), as part of a broader strategy to reduce costs and streamline government operations.

The decision was made during a cabinet meeting held last Sunday. This move is part of a series of measures aimed at improving the government's financial situation by merging and consolidating various state-owned enterprises (SOEs).

The mandate of AgroNat, which was established by the previous administration to advance the agriculture sector, will be transferred to the Maldives Industrial Development Free Zone (MIDFZ).

The President’s Office has indicated that these changes are to be implemented by the end of the year. This restructuring is part of a broader austerity program designed to address financial challenges, including rising external debt and a recent credit rating downgrade by Fitch. Fitch has lowered the Maldives’ credit rating from ‘CCC+’ to ‘CC’, citing an increased risk of default due to rising debt servicing obligations.

In a related move last week, the cabinet decided to make Fenaka Corporation, a state utility company struggling with debt, a subsidiary of the State Trading Organization (STO).

These measures are intended to cut costs and improve revenue through various reforms. The government is also pursuing legal revisions to reform Aasandha, introduce targeted subsidies, and implement a policy requiring companies that earn revenue in US dollars to pay taxes in US dollars.