Q&A: Maldives not in debt crisis, China insists

During the nearly half a century of diplomatic relations, global superpower China has remained one of, if not the most important development partner of the Maldives. Under China's flagship Belt and Road Initiative (BRI) the tiny island nation has benefited with a multitude of Chinese funded major infrastructure projects in the recent past.

However, following a change in government last November, such mega projects including the stunning over-water bridge linking the capital Male to the reclaimed suburb Hulhumale and the airport island have come under heavy scrutiny dogged by allegations of debt trap diplomacy and land-grabbing, threatening the once cordial Sino-Maldives relations.

AVAS Online spoke with China Ambassador to Maldives Zhang Lizhong as he shed light on the accusations, spat with former president and Speaker Mohamed Nasheed, the policy of the Chinese government and his vision for the future of China-Maldives relations.

On the 47 years of China-Maldives relations?

"This year we celebrate 70th Anniversary of the Founding of the People's Republic of China and the 47th Anniversary of the establishment of diplomatic relations between China and Maldives. For the past 70 years, China has achieved historical progress. We have successfully lifted 800 million people out of poverty with 400 million middle income population. For many years, China has contributed 30% of the global economic growth. These achievements are attributed to the strong leadership of Communist Party of China, the hard work, appropriate socioeconomic policies and Reform and Opening up. While China is integrated with the outside world, we did our effort to contribute to the welfare of the global village."

"As China continues to develop, it has promoted a community of shared future for the mankind. China promotes the BRI which is a public product to the world and has benefited a lot of developing countries. Maldives is a very good example. In recent years China has firmly supported economic and social development in the Maldives. Our cooperation under BRI has been very strong. That cooperation should be considered in a larger context. As China is growing and is ready to share its development opportunities with friendly countries especially developing countries, countries like Maldives have caught the chance and benefited themselves through mutual benefit cooperation with China."

"For the last 47 years, China-Maldives relations has enjoyed steady growth. We have implemented many infrastructure projects especially the friendship bridge which has made a huge social economic impact. Our relationship is a good example of excellent relations between a big and a small country, based on mutual respect, equality and mutual benefit. I'm very confident that as China's growth becomes stronger and more prosperous, our cooperation with the Maldives will be stronger and we will continue to assist Maldives' social and economic growth."

On Maldives foreign minister's ongoing China visit?

"Ever since the new government took office we have maintained close contacts and communication with the top level of the government, with President Ibrahim Mohamed Solih, Foreign Minister Abdulla Shahid and other key ministers. It is very clear that President Solih wants a better and stronger relationship with China. Both sides understand the continuity and stability of this important relationship is in the interest of both sides. So the foreign minister's visit to China is of no surprise to me. It is a good opportunity to review what we have done what we have achieved and to look ahead for further progress. He will have discussions with our state leaders and exchange views on various important issues. And I think this visit is significant for future relationship. It will help to enhance the political trust. With all the noises, different voices, criticism and doubts about this relationship, people need to have a clear understanding and a clear picture of how this relationship develops. It helps to enhance our future cooperation.

"China is committed to support the socioeconomic development of the Maldives. Our commitment to that is very strong. Our cooperation did not stop after the new government took office. This year we will organize 12 seminars on capacity training. As an outcome, over 400 people will or have received capacity training in China while a number of other aid programs still continue. I believe the cooperation will be enhanced after this visit. Maldives and China does not have any issues left over from history. We only discuss cooperation and how to move that cooperation forward in a better way.

"We understand that Maldives is a small economy and vulnerable to huge loans. What China wants for Maldives is sustainable development. What China is looking to do is encouraging more investment which does not increase your debt while continuing to provide assistance according to Maldives' needs. It is not our policy to force any country to accept conditions they do not like. We never force any country to do something they don't like. If there are any issues on our cooperation under the BRI, we need to discuss and find a way to properly handle these issues."

On debt trap and land grabbing accusations?

First of all, Maldives is not in debt crisis. We should have a very clear picture about what the situation is here. I have taken note of the international financial organizations like Moody's and Fitch. They have given a B+ credit analysis due to the strong performance of tourism development. So there's no such debt crisis in the Maldives. But in the meantime we are also concerned by debt sustainability. Debt sustainability is not only a concern of the Maldives side, but also a concern of the Chinese side. We don't want to see Maldives in debt crisis. It’s not good for Maldives and not good for our side. To tackle the debt issues, I noticed current government is taking a lot of measures including diversification of financial resources and diversification of the economy. I trust the current government has the ability and the wisdom to manage the challenges from increasing debt. But Maldives of course needs more development. Because people need a better life, affordable houses, better schools and better medical care. I believe the government has sufficient time and the wisdom to seek a balance between development and debt sustainability."

"From Chinese side we will continue to encourage investment to this area, with more focus on the livelihood improvement. We will continue to provide aid within our capability for the benefit of Maldives' social and economic development. I think our financial organizations will fully consider the economic scale and debt sustainability while they are acting according to international best practice and doing feasibility studies and make sure these projects are clean, green and affordable to Maldives. We are cooperating with the Maldivian side to manage any difficulties, while we are cooperating under the BRI."

On war of words with Mr. Nasheed?

"I cannot accept such accusations as land grabbing and debt trap. There are absolutely no grounds to these accusations. I have personally met with the Speaker Nasheed two times. We have exchanged views on a number of issues relating to our relations. And I can tell you that Mr. Nasheed has given many positive remarks on our relations on tourism, investment, climate change and solar energy. He gave me the impression that he is supportive of this relationship. Even when we talk about China-Maldives relations during his presidency we enjoyed good development. China conducted a number of assistance programs in Maldives. He has made his contribution to the relationship between China and Maldives and I sincerely hope he could continue to do so. I would say that if Mr. Speaker can publicly clarify his positions on these friendly and beneficial relationships, it would help the public understand the things better."

"But on the debt and land grabbing accusations I want to stress that it doesn't help to accuse China of these things. It doesn't help to single out China for blame. Because China is an important development partner for the Maldives. We have made our contributions to the development of Maldives. Our relationship is based on mutual trust, mutual respect and mutual benefit. However, I understand the public has concerns on the debt. These debt issues should not be politicized and neither should they be exaggerated. This will divert attention from the real issues by blaming China with some inflated numbers. Because China is just one of Maldives' development partners. Maldives has debt from different countries and international organizations. We need rational debate and rational dialogue on how to manage these issues. In the coming years we have many challenges. So we need to find out a way to cope with these issues if they were to arise. I think it will be more helpful to the Maldives side."