Speaker of the Parliament and former President of the Maldives, Mohamed Nasheed has stated that the proposed state budget for the upcoming year is a high figure due to the loans borrowed from China by the previous government.
The Finance Ministry has proposed a budget of MVR 34.7 billion for 2021. A revenue of MVR 17.8 billion is estimated for next year, including grants. While an expenditure of MVR 33.3 billion is expected, the proposed budget is in deficit by MVR 15.5 billion.
While the debate on the proposed budget was ongoing at the Parliament, Speaker Nasheed attempted several times to bring to the members’ attention the loan repayments due during the next year. Nasheed said while China had extended multiple loans to the Maldives between 2013 and 2018, the grace period of most loans have expired or are nearing expiry, with repayments lined up from now until 2023.
Noting that the loans were extended by Chinese businesses and banks, and Chinese governmnt banks, Nasheed, who always criticizes borrowings from China, said approximately MVR 4.9 billion has been allocated in the proposed budget for loan repayment. Over 80 percent of the payments are payable to China, said Nasheed.
“In my opinion, this budget is strained due to the large amount of loan repayments”, said Nasheed.
Most parliamentarians who have debated on the budget has pointed out that although the deficit remains high, the projects included in the budget are necessary to improve the country’s economy in its current state. Main-ruling Maldivian Democratic Party (MDP) that holds parliament majority is expected to back the proposed budget