Each Maldivian owes China $8,000 after infra spending: report
26 Nov 2018
1
A week after a new administration headed by President Mohamed Ibrahim Solih took over power in the island state in a crucial election that saw the ouster of Chinese backed President Abdulla Yameen, China has put a claim of $3.2 billion on the new government.
The new government of the Maldives says it has no idea how much it owes China after a construction spree in the tiny Indian Ocean nation, but fears the debts run up in the past five years could be unsustainable.
Mohamed Nasheed, a former president now serving as advisor to new President Mohamed Ibrahim Solih, said the Chinese ambassador to the Maldives, Zhang Lizhong, handed the government an invoice for $3.2 billion (equivalent to around $8,000 for every inhabitant of the400,000-strong archipelago).
China denies says the number is smaller and closer to $1.5 billion.
“It was an invoice. It just had a figure, $3.2 billion. It was shocking,” said Nasheed. “It wasn’t just a conversation, it was a written note handed over, it was clear, you owe us this much.”
Nasheed said Zhang gave Solih the note at a meeting on 6 October, days after his election victory over former President Abdulla Yameen. He did not give further details of exactly how the note was worded.
Asked about Nasheed’s comments, China’s foreign ministry said that its ambassador in the Maldives had rejected “this untruth” in statements to local media, referring to an interview with news website Avas in which Zhang was quoted as saying reports of debt of around $3 billion were “deeply exaggerated”.
China has underwritten millions of dollars in loans for infrastructure in the Maldives, located along its busy shipping route to the Middle East.
Solih’s administration said the country’s finances are in worse shape than expected, and that it will take weeks or months to untangle details of all the deals struck with Chinese firms.
“We are at a loss to understand how much we really owe to China,” said Nasheed.
“Direct debt, or direct bilateral government-to-government debt is one thing, but there is on top of that sovereign guarantees for the private sector. And there is also on top of that our state owned enterprises who have gone into debt.”
In the Avas interview, Zhang said the Maldives’ debt to China was $600 million to construct a sea bridge linking the capital Male with the airport, expand the airport, and build residential tower blocks on land reclaimed from the sea. Another $900 million had been earmarked as commercial loans to some state owned companies to fund projects from power to housing, the ambassador said, but much of that had not yet been issued.
.jpg "RBI keeps repo rate unchanged as focus remains on inflation")
.jpg "Indian Oil, Panasonic team up for lithium-ion cell production in India")
