NEW DELHI: Maldives President-elect Ibu Solih is exploring options of putting on hold Chinese funded Belt & Road Initiative (BRI) projects that have caused India major concerns about Beijing’s increasing influence in the Indian Ocean neighbourhood.
ET has learnt that Solih might follow the example of Malaysian PM Mahathir Mohammad, who has put on hold mega BRI projects in his country after returning to power earlier this year.
There is talk that the new Maldivian President might even cancel some BRI projects that were encouraged by his predecessor and outgoing leader Abdullah Yameen.
Yameen allegedly received $1.5 million as poll financing, with his critics accusing him of obtaining the funds from Beijing.
Solih’s challenge will, however, be the repayment of Chinese loans extended for the projects in the island nation.
The Maldives is facing liabilities of $1.4 billion, accounting for about a third of the country’s gross domestic product, due to Yameen’s policies.
Seventy-five per cent of the debt was generated from the BRI projects. During his campaign, Solih spoke against Chinese debt that brought financial difficulties for the Maldives.
Former Maldives President Mohamed Nasheed — Solih’s biggest backer — has declared reviewing all the agreements that his country had signed with China under Yameen’s five-year rule between 2013 and 2018, hours after his Maldivian Democratic Party won the Presidential polls on Sep 24. The Maldives, a small economy heavily reliant on tourism, is one of the most at-risk countries of any involved with the BRI because of debt, according to the Center for Global Development, a Washington DC-based think-tank tracking the initiative.
In 2014, China began to develop major infrastructure projects in the archipelago. One is a bridge linking the capital Male to a nearby island.
The other is an expansion of the capital’s airport, a project awarded to a Chinese company in 2014. The Maldives has also leased an uninhabited island (Feydhoo Finolhu) to a Chinese enterprise for 50 years at a price of around $4 million, with plans to develop infrastructure for tourism. China is also constructing a 25-storey apartment complex and hospital in the Maldives. China and Maldives had signed a free trade agreement in September 2017.
After the shock election result in the Maldives, Beijing has suggested it wants to join hands with India to stabilise the Indian Ocean country.
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