Speaker of the Parliament and former president Mohamed Nasheed has voiced concern over the loans borrowed by the previous government.
The Maldives has been severely affected by the economic downturn caused as a result of the COVID-19 pandemic. The tourism-dependent archipelago is facing numerous challenges in loan repayment.
Nasheed constantly expresses concern over the loans borrowed by the previous government from China. In a tweet published Saturday, Nasheed said the most dangerous issue with loans is that the state treasury may not have enough funds at the time of paying back the loan. Nasheed said when the grace period expires for loans borrowed between 2012 and 2018, it will need to be paid back by the current government of President Ibrahim Mohamed Solih in the next few years. While the state is in a difficult financial position at the moment, repayment of most loans will fall on 2021-2023 period, said Nasheed. Therefore, the best move at this time would be to restructure the loans such that no fines are incurred, he added.
While Nasheed has called to pardon fines incurred on loans, Chinese Ambassador to the Maldives had previously assured that the Chinese government was ready to discuss loan terms in the face of the COVID-19 pandemic.
The Maldives has borrowed over MVR 7.3 million in loans from different countries during the COVID-19 pandemic.