Maldives sitting on a debt pile, not bankrupt as of now | World News - Hindustan Times

Maldives sitting on a debt pile, but not bankrupt yet

Feb 19, 2024 06:40 PM IST

As Maldives reels under an economic crisis, Mohammed Muizzu has sought financial help from Turkey and China, but no one is seen forthcoming.

New Delhi: Even though Maldives has not gone bankrupt as media reports would have us believe, Male is heavily leveraged with external debt mounting to nearly USD 4.038 billion and the internal debt nearly matching the figure with debt crisis looming ahead in 2026. The gross national income of Mohammed Muizzu ruled Maldives is USD 5.6 billion as per official figures.

Maldives President is playing the China card with India hoping that Emperor Xi will give Male aid to tide over economic crisis
Maldives President is playing the China card with India hoping that Emperor Xi will give Male aid to tide over economic crisis

While Muizzu with his overt anti-India stance is asking for debt relief from his close friend Xi Jinping and Islamic emirates in the Middle-East, the Chinese debt of USD 1.3 billion constitutes nearly 30 per cent of its external debt with sovereign bonds maturing in 2026. Even though Muizzu sought financial support from the likes of Turkey and China, no one is seen forthcoming as the Island nation reels in a fully blown economic crisis.

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The Chinese surveillance ship Xiang Yang Hong 03, which was scheduled to dock at Male seaport for operational turnaround on February 8, is still awaited by the Maldivian authorities. The spy ship is currently located 20 hours from Male in the south Indian Ocean, well outside the EEZ of the Maldives, Sri Lanka and India.

Chinese surveillance ship Xiang Yang Hong 03
Chinese surveillance ship Xiang Yang Hong 03

For the record, the Chinese surveillance ship was only allowed to use the Male port for OTR and not conduct any survey or ocean bed mapping in the EEZ of Maldives and beyond.

While India is expected to replace the military crew of one ALH helicopter flying Maldivian flag by the end of this month or early March, the Modi government is on a wait and watch mode but fully prepared to help Maldives in case of an humanitarian disaster.

Rather than get worked up with Muizzu’s anti-India posture for his own political survival, the Modi government has given a green signal to Indian Navy to extend the air strip at Agatti islands in next door Lakshadweep and Minicoy Islands with a new air base sanctioned for Minicoy islands. Defence Minister Rajnath Singh will commission the first squadron of MH-60 R Sikorsky helicopters in Kochi on March 4-5 and then head towards Maldives on board India’s two aircraft carrier strike forces to Minicoy to commission a new base called INS Jatayu.

Even though Muizzu’s anti-India political posturing is aimed at the Majlis elections in April, the public mood towards China’s Belt Road Initiative (BRI) for infra development in Maldives is at best lukewarm. This is after a number of countries like Pakistan, Kenya and Tanzania are reeling under BRI debt after taking high interest loans from Chinese EXIM banks.

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    Author of Indian Mujahideen: The Enemy Within (2011, Hachette) and Himalayan Face-off: Chinese Assertion and Indian Riposte (2014, Hachette). Awarded K Subrahmanyam Prize for Strategic Studies in 2015 by Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) and the 2011 Ben Gurion Prize by Israel.

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