Chapter 4 | Page 181 4.4.2.3 Challenges in strengthening resource base from an ESC rights perspective Institutional weakness in public financial management is one of the factors that have undermined the Maldivian government’s capacity to undertake necessary fiscal adjustments in an efficient manner. Although there have been some developments in public finance management in recent years,193 a lot more needs to be done to improve budget credibility and governance, especially in relation to transparency and accountability. Containing and controlling fiscal and external imbalance needs to be a high priority for the government of Maldives,194 especially since high fiscal deficits create an elevated risk to the overall health of the economy and the ability of the government to sustainably provide public services that are essential for basic ESC rights. Fiscal consolidation, reduction in current account spending and reining in transfers and subsidies are among the most important and urgent challenges for the government. The evidence on the ground suggests that deficit financing will become more challenging in the future unless there is a reversal in the reliance on short-term commercial borrowing, monetisation of deficit, and build-up of payment arrears. In summary, this case study analysis has identified the political and economic dimensions of the challenges of managing government revenue and fiscal policy sustainability and how these policy elements could impact the overall level of resources available to the State to address ESC rights policy priorities. 4.4.3 Policy implications in maximising domestic revenue for ESC rights The foregoing analyses of the State reports and the case study have shown the practical complexities of fiscal policy tools relevant to domestic revenue 193 Strengthening the institutional capacity of MIRA and introduction of broad-based taxation are among key developments in recent years. 194 Asian Development Bank, above n 191, 176.