What’s the Matter ? Debt Dilemma: Maldives in debt Grapples with Chinese Loans
Male, 18 May (HS):- Maldives is struggling to repay loans it had taken from China. It has also appealed to China to restructure the loans. Indian Monitory Fund (IMF) also warned of the risk of extending loans to Maldives. It is also said that after Shri Lanka, China held Maldives under its tentacles of loans.
The Maldives is a small nation of 1,192 tiny coral islets scattered 800 kilometres (500 miles) across the equator, but it strategically straddles key east-west international shipping routes. Tourism is a crucial source of foreign exchange for the country, home to white sandy beaches and secluded resorts offering Robinson Crusoe-style holidays. China has pledged more funding since last year’s victory by Muizzu, who thanked the country for its “selfless assistance” for development funds on a state visit to Beijing shortly after he took power. Official data showed the Maldives’ foreign debt reaching $4.038 billion last year, about 118 percent of gross domestic product and up nearly $250 million from 2022. As of June 2023, the Export-Import Bank of China owned 25.2 percent of the Maldives’ external debt and was the country’s biggest single lender, Maldives finance ministry figures showed.
China and Maldives Discuss Loan Restructuring Amid Economic Concerns
China said a discussion with Maldives about restructuring loan repayment is in progress. Chinese Ambassador in Maldives Wang Lixin said restructuring is not a solution and will pose problems in Maldives seeking loans again from China. The technical teams of China and Maldives are handling the issue carefully and responsibly. Wang said China respected Maldives and different projects are being run by China not for earning profits.
Watch this video for more information on the situation
Maldives Gets IMF Debt Warning As More Chinese Loans Loom | Economy
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