Former Maldivian President and Parliamentary Speaker Mohamed Nasheed has criticised the high debt the island nation owes to China, as his country's government finalised the annual budget on Wednesday.
"Discussing (the) 2021 budget in Majlis today. Debt repayments next year will amount to 53% of government revenue. Over 80% of debt repayments will go to China. Totally unaffordable. Even if we sell our grandmother's jewelry, we won't be able to afford these repayments", said Nasheed on Twitter.
Discussing 2021 budget in Majlis today. 🇲🇻 debt repayments next year will amount to 53% of government revenue. Over 80% of debt repayments will go to China. Totally unaffordable. Even if we sell our grandmother’s jewelry, we won’t be able to afford these repayments. pic.twitter.com/Vc2v8n2Kov— Mohamed Nasheed (@MohamedNasheed) November 18, 2020
The tweet comes against the backdrop of the Indian Ocean country emerging from an economically taxing COVID-pandemic, which the World Bank estimated earlier this year could hit Male harder than other regional economies.
Nearly 70 percent of the nation's revenue flow from tourism was crippled as international air traffic was hit due to lockdowns in other countries.
In an interview with the BBC last month, Nasheed estimated that the Maldives owed nearly $3.1 billion to Beijing, most of it loaned during the tenure of the previous government headed by former President Abdulla Yameen. The nation's overall GDP was valued at just over $5.3 billion in 2018, as per the World Bank.
Chinese officials, however, have in the past claimed that Male owed over $1 billion to China, most of the money loaned to Male is in the form of government-to-government loans, private loans guaranteed by the Maldives government via "sovereign guarantees", and funds disbursed to Maldivian state enterprises.
The $200 million Maldives-China Friendship Bridge is one of the showcase infrastructure projects built by Beijing on the strategically-located island archipelago in the Indian Ocean.
Anand Kumar, an associate fellow at the New Delhi-based think tank Manohar Parrikar Institute for Defence Studies and Analyses, told Sputnik that a unique situation existed in the Maldives, where the "creditor was demanding less money than what the debtor estimated".
"The former president (Yameen) is said to have taken loans from China to fund private projects owned by some of his cronies. He had in fact taken loans for these projects in return for sovereign guarantees", said Kumar, who has also authored a book titled "Multi-party Democracy in the Maldives and the Emerging Security Environment in the Indian Ocean Region".
The Maldives Democratic Party (MDP), which Nasheed heads, returned to power in 2018. Ibrahim Mohamed Solih, a party colleague of Nasheed, assumed the presidency after MDP's triumph.
In the lead-up to the 2019 vote, the MDP had campaigned extensively on the issue of rising foreign debt, as it attacked the then-president for his reliance on foreign capital.