Business Politics

Concern over Maldives mounting debt to China

Concern and disapproval flooded social media and the comment sections of local news websites after reports of China’s proposal to take over Zambia’s international airport if the country fails to pay back its foreign debt.

China’s Exim bank gave a US$360 million loan for the three-year development of Kenneth Kaunda international airport in 2015 and Zambia’s debt levels have been described as a “national crisis.”

“Zambia, Gambia, all lessons to you!” former foreign minister Ahmed Shaheed tweeted, referring to China-backed development projects in the Maldives such as the US$200 million Sinamalé Bridge and an upgrade of the country’s main international airport.

Financed with grant aid and loans from China and built by a Chinese company, the country’s first overwater bridge connects the capital via the airport island Hulhulé to its suburb Hulhumalé, a reclaimed island under development as a new urban centre.

MP Abdul Ghafoor Moosa, who sits on parliament’s finance committee, told the Maldives Independent that about 90 per cent of the country’s external debt has to be paid to China.

“Our economy will be in a deadlock because of China. We will have to pay at least 70 per cent of what we get to China. It is an immense economic fear to be so dependent on just one country alone,” the MP for Kulhudhuffushi said.

Most comments on local news websites expressed concern and scepticism over China-led projects in the Maldives, while a smaller number showed confidence in President Abdulla Yameen’s ability as an economist.

“The same thing happened to Sri Lanka. The Maldives is also going to face this,” said one person. Another wrote: “The next thing we hear will be China’s takeover of Velana Airport and Sinamalé bridge.”

But one person claimed only Yameen could handle Chinese debt.

“He is a leader who can pay back loans. A leader who knows how to do business. Zambia would not face this if they had President Yameen to lead them.”

“Did China ever ask these countries to take loans when they did not have the capability to pay it back?” another person wrote. “There will always be penalties if a country is unable to pay back debt after taking loans for development projects. Even if the loan is taken from India.”

MP Ahmed Amir from the Maldives Development Alliance, a political party in the ruling coalition, said he was unfamiliar with matters relating to economy and finance — despite being the deputy chair of parliament’s finance committee.

“All I can say is, I don’t want us to face any losses. I want us to gain. And I am very concerned over the things being done by entities within the country to block financial opportunities to the Maldives,” he said, adding that the finance committee’s chair would be able to elaborate.

Ruling party lawmaker MP Ahmed Nihan, who chairs the committee, was not responding to calls when contacted by the Maldives Independent.

An editorial from the Financial Times on Monday said US officials were seeing “a disturbing pattern in which Beijing has encouraged indebtedness in order to gain control of strategic assets when debtors default on repayments.”

According to the Maldives central bank’s annual report for 2017, the country’s debt to GDP ratio increased to 26 per cent of the GDP in 2017, a 20 per cent bump from the previous year.

The total external debt stock “increased by USD339.4 million and summed to USD 1.2 billion” at the end of 2017, the MMA report stated, as governor Ahmed Naseer said the country must manage external debt taken to fund development projects.

The IMF and the World Bank predict Maldivian debt to reach 121 percent of GDP by 2020.

Full details are available at the link below:

Source URL:  Maldives Independent

Leave a Reply

5 Comments on "Concern over Maldives mounting debt to China"

avatar
  Subscribe  
newest oldest most voted
Notify of
KALIMUTHU
Guest

Now status work permit for Indians?

Mumbaikar
Guest

I feel for you how New Delhi is treating Tamils so bad. You are called Sudhras and Panjamas and treated like shit by the New Delhi government. Wish Tamils are free from the clutches of India.

MissIndia
Guest

The Maldivian government should prepare to handover the Friendship Bridge and Velana Airport to the Chinese sometime in the near future.
Don’t take out loans for infrastructure projects you cannot afford. You mallus never seem to learn.

Mumbaikar
Guest

Like Iran handing over their seaport to India? Hey RaW madamme, stay in your ghetto.

MissIndia
Guest
It amuses me when muslims point to the caste system in India and gloat like idiots. Is it any worse than the sectarianism practised by muslims? The conflict between Saudi Arabia and Iran and Saudi Arabia and Yemen is a shia sunni issue. Pakistan, a sunni majority country, routinely discriminates against other muslims like shias and ahmadis. Amusing to us hindus when you consider the first Pakistani was not Mohammad Bin Qasim but a hindu who was forcibly converted. 90% of Pakistanis have hindu DNA. Where do the fantastic stories of arab ancestry come from? This also applies to Maldivians… Read more »