President Mohamed Muizzu thanks India, China's assistance in repaying Maldives’ debt

"I thank the Chinese government and the Indian government on behalf of the Maldivian people for their cooperation with this effort to strengthen the economy, to assure our economic sovereignty, for the sake of the Maldivian people," Muizzu was quoted as saying by Maldivian news portal adhadhu.com.

Maldives's President Mohamed Muizzu on the completion of eight months since assuming the country's presidency has thanked both India, and China for helping strengthen the Maldives' fragile economy.

Addressing the gathering at the Maldives Centre for Social Education (MCSE), Mohamed Muizzu expressed his sincere gratitude to China and India for their support in easing the Maldives’ debt repayment, thereby enabling the country to ensure economic sovereignty.

Muizzu highlighted the assistance provided by the Chinese government in the Maldives’ developmental endeavours. He revealed that the Chinese government had agreed to defer the repayment of loans and accrued interest issued by the Export-Import Bank of China (EXIM Bank) for five years.

Muizzu also emphasised that the government is in negotiations with the Chinese and Indian governments to facilitate currency swap agreements. He stated that such agreements would help alleviate the local shortages of US dollars. Additionally, President Muizzu announced that his administration is negotiating a Free Trade Agreement (FTA) with the United Kingdom and expressed hope to reach a similar agreement with India.

Muizzu came to power last year on an anti-India campaign plank seeking the removal of around 80 Indian military personnel operating helicopters and Dornier aircraft donated by India.

China for its part has scaled up its relations with Maldives, since Muzzu, widely regarded as a pro-Beijing leader, took over power.

Early this year, he visited China during which the two countries elevated their ties to a comprehensive strategic cooperative partnership and signed 20 agreements followed by a military assistance pact with Beijing much to the disquiet of India as Maldives is its closest neighbour located strategically in the Indian Ocean.

He also permitted Chinese research vessels also regarded as “spy ships” to berth in Maldives waters after Sri Lanka banned them for a year.

However, after clinching an agreement with India to replace the military personnel flying the helicopters used to evacuate the patients from a host of islands in the archipelagic nation, Muizzu warmed up to India and attended Prime Minister Narendra Modi’s swearing ceremony.

He also praised Rs 400 crore assistance by India and sought to restructure debt owed to India by Maldives.

The marked change in his policy towards India came as in May this year the International Monetary Fund (IMF) warned the Maldives that it faces a high risk of debt distress without significant policy changes.

The IMF noted that the Maldives' current account deficit is expected to remain large and that its overall fiscal deficits and public debt are projected to stay elevated.

*With Agency Inputs