Maldivian Finance Minister has claimed that the government is to ask Beijing to reduce the debt it accrued during a recent Chinese investment boom, which saw several projects being funded in the island nation by the help of the Chinese government.
Minister Ibrahim Ameer claims that the large-scale graft inflated the value of contracts under the previous government, in an interview given out to the Financial Times.
“This was wilful corruption,” Ibrahim Ameer told the Financial Times. “[The former government] knew what they were doing, getting kickbacks from contractors . . . That’s why the contract prices were too high. We do not have the fiscal health to carry on with these contracts. So it is in our interest to renegotiate,” he said, while stressing that the Maldives remained open to Chinese investment on reasonable and transparent terms.
China said it had provided loans at below market rates for projects in the Maldives “in accordance with the wishes and development needs of the Maldives”.
“In the process of discussing and determining relevant co-operation programmes, China and Maldives have fully considered factors such as debt sustainability,” a China foreign ministry spokesperson said in a statement to the Financial Times
According to the Maldives’ central bank, Maldives Monetary Authority (MMA) the government currently owes $600m to China, including $374m to fund an expansion of its international airport and $68m towards the construction of the Sinamale’ Bridge.
Finance Ministry data show it is also liable for $935m of loans to public and private Maldivian companies, which were guaranteed by the state. These include $548m for housing in the new artificial island of Hulhumale, and $127.5m borrowed by a resort tycoon close to Mr Yameen.