Politics Society & Culture

Yameen defends rising debt

President Abdulla Yameen has hit back at opposition criticism over rising national debt, defending the huge loans taken by his four-year administration as necessary for development.

Speaking at a function held Sunday night to hand out the annual ‘Youth Awards,’ Yameen said the criticism from opposition lawmakers showed a lack of vision or an understanding of the “basic economics” of risk and reward.

“If [the opposition] do not want to take loans to improve the condition of our youth, and if these are leaders that claim they can take the nation forward with a young generation, I would say what’s in front of us once again is despair,” he said.

“They don’t want to take a loan to provide the housing needed for a young population. I don’t understand how this can be done without taking loans.”

During last week’s budget debate, opposition lawmakers echoed warnings from international financial institutions that the Maldives could face debt distress due to the current administration financing its flagship projects with external loans.

The central bank governor also expressed concern that increased reliance on foreign borrowing could put pressure on dwindling foreign currency reserves. Public debt is expected to reach MVR43 billion (US$2.8 billion) this year but the government says projects such as the expansion of the airport are necessary investments with longer-term payoffs.

Yameen went on to say that Maldivian youth, who represent 65 percent of the population, would be able to repay the loans and pass on the benefits of growth and new income to their children.

The government’s foreign loans are aimed at providing housing for youth and increasing the airport’s capacity to cater to eight million tourists annually, he continued, adding that other priorities of the 2018 budget include offering a record 3,000 student scholarship loans, developing sporting infrastructure, and creating jobs for youth.

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