Politics Society & Culture

Debt ‘natural’ for the Maldives

Debt is a natural issue for all developing countries like the Maldives, a local NGO said Sunday as it praised China for being the only country capable of giving loans with “friendly conditions.”

The Maldives has been borrowing heavily from China in recent years, although the sums and terms of the loans are not known.

Studies have said that China is involved in major Maldivian projects that have a combined worth of $1.5 billion, and the tiny nation’s soaring debt has alarmed the opposition and major global financial institutions.

But a representative of the Maldives China Trade and Cultural Organization brushed off concerns.

“Debt per say, is not an issue, if the borrowing nation has a plan to pay back,” Midhuam Saud told China’s official news agency Xinhua. “The only way we, as a developing nation, can achieve our developmental goals is by taking loans, and most people I meet here accept this fact.

“After decades’ development, today’s China has the financial capacity to provide loans to other countries with the attached terms and conditions being far more attractive than those from other financial institutes. That’s why we take the loan from China,” he added.

The MCTCO was inaugurated two years ago by President Abdulla Yameen, whose administration has embraced China, with the event attended by top government ministers and China’s ambassador to the Maldives.

It is a non-profit organisation based in Malé. Housing Minister Dr Mohamed Muizzu is an honorary member while Abdulla Rifau, a ruling party lawmaker, is general secretary.

Saud’s comments come amid worsening relations between the Maldives and neighbouring India, which has been needled by China’s influence in the region.

Former president Mohamed Nasheed has said he will renegotiate the Maldives’ debt to China, as a government formed by the opposition would not be able to repay the loans without a review.

The total loans to build infrastructure, provided by China’s Exim bank, should be “easily more than US$2.5 billion,” which is equivalent to the country’s gross domestic product.

Presidential elections are due to be held on September 23.

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Source URL:  Maldives Independent

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