Faced with Mounting Debt, Maldives Seeks Assistance from India

Highlights

• The Maldives is said to owe close to 70 per cent of its external debt to China.
• We hope that India will be generous enough to help us with the initial management of any shortfall we might face: Maldives foreign minister Abdulla Shahid.

Faced with mounting foreign debt, some of which may have resulted from dubious loan agreements, the Maldives is looking at India for more budgetary support to help Male meet its development goals:

Ahead of his meeting with Indian leaders on Monday, Maldives foreign minister Abdulla Shahid told TOI that Male was still trying to study the implications of the debt accumulated by the previous Abdulla Yameen government as figures provided by government officials on foreign debt did not necessarily “tally with the Chinese estimates”.

The Maldives is said to owe close to 70 per cent of its external debt to China.

“We hope that India will be generous enough to help us with the initial management of any shortfall we might face. We know that the Indian government is fully equipped to help us deal with issues like fresh water scarcity, sewerage and with our focus on the health sector,” said Shahid.

Shahid will hold talks with his counterpart Sushma Swaraj on Monday and is also expected to call on PM Narendra Modi. His visit will also lay the groundwork for visit by Maldives’ President Ibrahim Solih next month.

Speaking about Maldives’ debt problem, Shahid said the Yameen government gave sovereign guarantees to not just state enterprises but also individuals and that the huge debt had not translated into projects.

According to sources in Male, the Yameen government is suspected to have pocketed a part of the grants and also earned commission on soft loans. In that regard, the new government is looking closely at the controversial cost escalation of recently inaugurated China-Maldives Friendship Bridge.

Shahid, who will soon visit China, indicated that Beijing will continue to be an important partner in economic development of the archipelago. “Yameen played one country against another but we don’t believe China can replace India or India can replace China. However, one thing which should be obvious is that the neighbourhood will get priority,” said Shahid.

The minister also made it clear that no part of Maldives territory will be allowed to be used for military purposes by any foreign power. “We will review any such agreement which Yameen may have signed and renegotiate it,” said Shahid.

India and the Maldives will also sign a visa agreement soon to facilitate easy access for Indian professionals to the Maldives and for Maldivians who have families in India.

The foreign minister also said that India’s assistance can help the new government deliver on its promises to provide several services to the Maldivian people. “These will ensure that the Maldives turns into a middle-income country in reality and not just on paper,” he said.

“India can also help us develop harbours which is on top of our agenda for improving access to islands. We can build a good transport network with help from India,” added the minister.

Source: ToI

Image Courtesy: The Hawk