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India to loan virus-hit Maldives $250m
MALÉ, Maldives, Sept 20, 2020 (BSS/AFP) – India on Sunday
announced a $250 million loan to the Maldives to boost its
coronavirus-battered economy in a further bid to counter China’s
growing financial footprint in South Asia.
The Indian Ocean archipelago, renowned for its luxury
resorts, has been badly hit by the pandemic, with foreign tourists
failing to flock back in large numbers after international flights
restarted in mid-July.
India’s High Commission in the Maldives said the loan was
being provided after a request by Maldives President Ibrahim
Mohamed Solih for “financial assistance to overcome the difficult
economic situation.”
“The Maldives is at liberty to use the money in repairing the
domestic economic situation in line with its own priorities,” it
said in a statement.
A sale of treasury bonds issued by the Maldives government to
State Bank of India (SBI) will raise the money, with ten years
given for repayment, the statement added.
The assistance follows a $500 million pledge by New Delhi in
August to help build bridges and causeways in the nation of 1,192
islands located on major East-West shipping lanes.
Under former president Abdulla Yameen’s administration, which
was ousted in 2018 elections, the Maldives borrowed some $1.4
billion from Beijing for expensive infrastructure projects,
according to Solih’s government.
The loans added to critics’ concerns that Chinese aid in Asia
and beyond was saddling countries with unsustainable debts while
expanding Beijing’s sphere of influence.
The bond takes New Delhi’s total pledged financial assistance
to the Maldives to over $2 billion since Solih came to power,
according to India’s foreign ministry.
The country, which still has a nighttime curfew in place to
combat the virus, has recorded more than 9,600 infections and 33
deaths from Covid-19.
The Asian Development Bank forecasts the Maldives’ economy to
contract by 20.5 percent this year, compared to growth of 5.9
percent last year.
BSS/AFP/ARS/1647 hrs