Assistant Secretary of State for South and Central Asian Affairs of the US Department of State Donald Lu stated that at this time when world powers, including America, is working to get a foothold in the Indian Ocean, the true benefits of China's aid to Maldives can only be reaped if, simultaneously, competition from India is maintained.
Speaking at the Indo-Pacific Relations panel discussion held at United States Institute for Peace (USIP) last Friday, Lu shared that during his recent visit to the Maldives, he had appealed to the country's leaders to maintain close relations with all regional countries.
"But my belief is that, China can only be a good partner if there is genuine competition. However, I am not seeing that competition," he said, noting that what he observed instead is large loans being taken from China to undertake major projects which would not prove economically beneficial in the long term.
Lu further noted the dire economic status of the Maldives at present, calling on larger nations to step in to help Maldives out of its current troubles.
"If the Maldives' debt is not restructured in 2026, more than USD 1.3 billion dollars will need to be issued as repayment. This is an amount higher than the annual budget," Lu said.
According to Lu, the solution to such challenges faced by small countries like the Maldives is private sector investments that are beneficial to both sides.
He noted the vast opportunities for investments in the Maldives that he observed during his visit to Maldives in January.
"We are in deliberations with Maldives to come to an investment agreement. Under this agreement, we will provide such funding to the Maldives through the US Development Finance Corporation," Lu said.