- Capable of paying back loans
- Productivity will increase from projects
- Loans taken after critically analyzing risk
Economic and Youth Council has said the high debt level does not pose any cause for concern as those loans are being used to drive the mega and major development projects.
Clarifying the aspects of the World Bank report, EYC Co-Chair and Fisheries Minister Dr. Mohamed Shainee said there inherent risk in taking loans to conduct development projects. But, he assured that those loans were taken after critical analysis of the risk. He added that loans were at a small interest rate on the global money markets and that using this opportunity to kickstart development projects showed long term vision.
He said every project imitated by these loans will drive GDP forward, enabling the Government to pay up the loans. Dr. Shainee said while the report recognizes the risk of loans, the loans had driven major investments, recording a boom of 40 percent in the construction sector. Therefore, Dr. Shainee added that this was a clear indicator that the economy was heading in the right direction.
"When reports like this are misrepresented, the entire economy is effected. The report itself is a positive thing. Taking loans is a risk. But the loans we took were low interest loans, to generate positive returns," he said.
Minister Jihad said Maldives was one of the nations attracting the most investments in the region. He noted that World Bank had failed to mention this fact and as such this has impacted on the way the body had determined GDP progress. Jihad said GDP determination methods used by Maldives and World Bank were different. He added that all nations will take loans, and initially there will some difficulties which will get addressed once the profits started flowing in.
"The report did say that GDP will rise to 6.4 percent. I will say that we have sufficient reserves. We have that strength. We are paying back loans according to schedule," he said.
Tourism Minister Moosa Zameer said returns from the resorts, which will open this year, will assist the economy and boost production. He also added that the Government had carefully analyzed all risks associated with loans and strategies to pay back loans prior to taking them.
Economic Minister Saeed said the numbered of employed citizens had increased, with unemployment rate secured at a steady level. He also said the prices of goods were held at the same level in spite of the many development projects, saying that the report was generally positive.
