Burdened by Chinese debt, Maldives gets $1.4bn aid from India
India said on Monday it will provide $1.4 billion as financial aid to the Maldives, which is grappling with mounting Chinese debt, after the two sides signed four agreements that will boost cooperation in areas ranging from healthcare to defence.
Prime Minister Narendra Modi announced the assistance after talks with Maldives’ President Mohamed Ibrahim Solih, aimed at resetting bilateral ties following the defeat of pro-China strongman Abdulla Yameen in elections in October.
“For the social and economic development of the Maldives, we are providing aid in the form of budget support, currency swap and concessional lines of credit worth $1.4 billion,” Modi said during a brief media appearance with Solih.
Solih said the two sides had signed agreements that will pave the way for greater cooperation in defence, healthcare, trade, education and cultural exchanges. Modi said he and Solih were in agreement that bilateral cooperation must be strengthened to maintain peace and security in the Indian Ocean region. “The security interests of both countries are linked to each other. We also agreed that we must be aware of each other’s interests and views for the stability of this region,” Modi said.
Yameen had taken the Maldives closer to China and away from India, a traditional partner of the Indian Ocean nation. The move led to a five-year construction boom driven by Chinese loans under its Belt and Road Initiative, but Solih’s government has said the country’s debt could be worth more than $3 billion.
Bilateral relations hit an all-time low when Yameen imposed a 45-day emergency in February. India criticised his decision and urged him to restore the democratic process and release all political prisoners.
The Indian support is the largest assistance yet for the Maldives. Modi, the only head of state or government invited to Solih’s swearing-in on November 17, had earlier said India was prepared to help the Maldives in “every possible way” to cope with the crisis. Solih, for his part, had spoken of an “India first” policy even before he assumed office last month.
Solih’s decision to make his first foreign visit after assuming office to India showed the importance attached by the new regime in Male to bilateral ties, Indian officials said.
The four agreements signed during the visit cover facilitation of visas, cultural cooperation, mutual cooperation to improve agribusiness, and cooperation in information and communications technology and electronics, a joint statement said.
Solih reaffirmed his “India first” policy and appreciated the assistance provided by India, the statement said. “The two leaders agreed to strengthen cooperation to enhance maritime security in the Indian Ocean Region through coordinated patrolling and aerial surveillance, exchange of information and capacity building,” it added. Modi and Solih also reaffirmed their support for cooperation in combating terror.