If one sees closely and very minutely, then one can see a ‘crack’ in the foundations of the bridge! Will it stand the test of time or will it just wither away is yet to be seen! The China-Maldives friendship bridge is the flagship and a symbol of unwavering trust & bond between the two countries. Maldives Government will swear for the so-called ‘friend’ of President Yameen, China & also for the project! But, lately it seems the friend has started to show ‘Who is the Boss’?
Maldives has been owing 70 percent of its external debt to China. It is heavily dependent on Beijing’s largess. Dependency can be a dangerous thing. Out of the total cost of USD 210 million of the project, USD 170 million was to be provided by China, as loan, in two installments. A sum of USD 80 million was released in the first installment, but the second installment of USD 90 million has been frozen by Chinese Govt. As was confirmed in the ‘secret’ meeting. Our reporters digged in and found out that a meeting took place sometime in February this year, which was attended by Maldives Govt. officials, the EXIM bank officials and the Chinese Govt. representatives (Details of these officials is a well kept secret). Maldives Govt. had asked the Export-Import Bank of China (EXIM), to release the second installment for the friendship bridge project. But, to all astonishment, China refused to release the installment. Further, the Chinese officials laid down few conditions to be full-filled before releasing the further amount for the project. Firstly, the rate of interest may be revised to go further higher up. Secondly, the right to collection of toll on the bridge by China, to be raised from 20 years to 40 years. Thirdly, the China Govt. wanted to know the details of plan of how Maldives plan to return the loan amount and also to decrease the tenure of loan for speedy recovery. These undue demands from our so-called ‘friend’ has put the Maldives Govt. in a fix, But the question also arises why did a ‘big’ nation like China had to go for these steps.
One reason can be to trap Maldives under debt to gain the full control over the nation, just like being done in Cambodia and Sri Lanka. Another reason lies in the growing burden on China’s two policy lenders, China Development Bank (CDB) and Export-Import Bank of China (EXIM), which have between them already provided $200 billion (155.1 billion pounds) in loans throughout Asia, the Middle East and even Africa. The risks to policy banks, commercial lenders and borrowers, all of whom are tangled in projects with questionable business logic, bankers and analysts say. EXIM, seeking to contain risk, says it has imposed a debt ceiling for each country. Massive government capital injections, bonds priced as sovereign debt and access to the central bank’s pledged supplementary lending programme keep CDB and EXIM funding costs at rock bottom.
“For some countries, if we give them too many loans, too much debt, then the sustainability of its debt is questionable,” Sun Ping, vice governor of EXIM, said on the issue. This is the question now being raised by China in respect of Maldives. Being an unstable Govt. in Maldives, will it be able to repay the debt as per laid down conditions.
Not only Maldives, but other countries are too facing the brunt of China. For example, Cambodia is one of the countries trapped in Chinese debt to the extent that their foreign policy seems to largely serve China’s political and diplomatic interests in the region while Cambodia’s own international reputation and soft power are eroding.
A 2016 International Monetary Fund (IMF) report showed that Cambodia’s external multilateral public debt is now at US$1.6 billion, while its bilateral public debt with China is US$3.9 billion — 80 per cent of this is owned by China. Cambodia do not have a choice under this heavy debt and has to bow in front of the Dragon, like it or not.
Full details are available from the link below:
Source URL: Maldives Uprising