Speaker of the Parliament Mohamed Nasheed has revealed that 15% of the National Budget should be allocated to pay back the loan owed to China.
Speaking at the annual conference of India's Think Tank, the former president said the interest rates on the Chinese loans are extremely high due to them being commercial loans.
Therefore, the government needs to assign 15% of the National Budget effective from next year for the purpose of paying back the loans owed to China, said Nasheed.
While it is not just the high interest rates incurred on the loan that the government has to pay back, the project cost was also high, said Nasheed, alleging that the company had sent bills for higher amounts. Therefore the current government is now working on paying back the cost as well as the interest, said Nasheed.
Nasheed further emphasized the importance of paying back the debt, even if it meant bringing down state expenses, revealing that over US$ 3.4 billion is currently owed to different Chinese companies.
The former president also highlighted that developmental projects are hindered due to the debt owed to China, revealing that discussions will be conducted regarding reviewing the agreements made with China.