The island nation is the latest in a number of small countries where China has invested millions of dollars building highways and housing as part of its “belt and road” initiative.
But these projects have left the country of just over 400,000 people in debt and prompted calls for investigations into how contracts were awarded to Chinese companies during the previous administration.
“As I take over the presidency the state’s financial situation is precarious. The damage done due to projects conducted only for political reasons, and at a loss, are huge,” said Ibrahim Mohamed Solih after being sworn in in the capital, Malé, on Saturday.
Solih, a veteran politician, won the presidential election in September against the former president Abdulla Yameen, a strongman who steered the country closer to China and faced international pressure over imprisoning political rivals.
“The state coffers have lost several billions of rufiyaa [the local currency] due to embezzlement and corruption conducted at different levels of the government,” Solih said.
He said it wasn’t clear how much the state had lost. His transition team said this week it would conduct a forensic audit of deals sealed by the Yameen administration, many of them with Chinese state firms.
The big worry for Solih’s team is the debt the country has run up with Chinese lenders for projects such as a mile-long sea bridge connecting the airport to the capital, the airport expansion itself and massive housing projects on reclaimed islands.
Solih’s transition team said it had been told the country owed $1.5bn to Chinese lenders but feared it could be much higher. Even a debt of $1.5bn would be more than a quarter of the country’s annual gross domestic product.
The Indian prime minister, Narendra Modi, was the highest-ranking foreign visitor at the inauguration ceremony.
India, which has long been the Maldives’ main political and economic partner, had grown concerned that China’s expansive diplomacy was aimed at establishing an outpost on the islands.
Full details are available at the link below: