Doubts whether able to pay next year's debts gone: Thoriq

Mahibadhoo MP Thoriq Ibrahim stated last night that one of the reasons the economy is struggling is due to the debt that needs to be paid by the current government. This debt is due to the two loans that were taken during former President Abdulla Yameen's administration and former President Ibrahim Mohamed Solih's (Ibu) administration, as was said by Thoriq.

He said this during the meeting at Mahibadhoo when President Dr. Mohamed Muizzu arrived to meet its residents. The President is currently visiting 10 islands in Alifu Dhaalu Atoll.

"President Muizzu has to pay off a total debt of USD 500 million next year. USD 250 million comes from former President Abdulla Yameen's administration for the Sunny Side bond. The other USD 250 million comes from former President Ibrahim Mohamed Solih's administration," said Thoriq, who is currently fulfilling his third term in Parliament.

He went on to say that Yameen and Solih stated the government will come to a "default" next year due to the USD 500 million debt not being paid. However, Thoriq said that the current administration is putting aside funds in order to pay the debt.

"Today, we see a postponement of a large portion of the debts that are to be paid to India and China, two of our neighboring countries. This was achieved through foreign relation discussions," said Thoriq.

Thoriq has also stated that his doubts regarding whether next year's debts can be paid have been cleared, after President Muizzu discussed the matter with Indian and Chinese leaders.

"A large portion of the USD 800 million that we owe can now be saved or put into the Sovereign Development Fund (SDF). Hope has been reignited that our economy can be saved next year, with the possibility that the outstanding amount from MDP's administration can be paid off on a lower loan rate," said Thoriq.

During the celebration of the 76th National Day of China on 1st October, Chinese Ambassador Kong Xianhua announced that concessions have been "finalized" regarding Maldives' debt.

"I am glad to announce that debt concessions have been arranged and finalized between both relevant sides. China's aid in stabilizing Maldives' financial and fiscal position is not the only thing that is shown when looking at these agreements," said the Chinese Ambassador.

"China trusts the strong potential of the Maldivian economy and the reformation steps the Maldivian government has taken."

As per Thoriq, the Maldivian government is required to pay a total of USD 800 million to international entities. He also stated that one of the biggest steps the current administration has taken to ease loan payments for the state is to have banks be the medium for exchanging Dollars. 

Thoriq said that this was something previous Presidents had not dared touch, and that it was not an easy choice for President Muizzu to make.

"Former Presidents have not dared to touch the Dollar exchange due to the few businessmen in the tourism industry. Their influence is strong, in politics, in finance, the employment industry and in the national economy. Former Presidents have feared their disapproval or the possibility their political cooperation would not be available," said Thoriq.

While referencing MMA selling Dollars beyond the determined rate, Thoriq stated that the solution is for Dollar exchange within the Maldivian economy. He also stated as part of the solution that the Dollars that enter MMA have to be given to businesses through banks after next year's Sukuk has been paid.

"In my perspective, this is the biggest issue the Dollar is facing here," said Thoriq.

Thoriq went on to say that after the USD 800 million is paid off and along with the projects that are to begin, Maldivians will re-elect President Muizzu during the 2028 elections.

As per Thoriq last night, he had repeatedly requested for debts to be accrued in a responsible manner during his time as an MP in Parliament during former President Ibrahim Mohamed Solih's administration. He went on to say that his requests fell on deaf ears, and that the results of that are being seen today.

Thoriq highlighted that during Solih's government, PPM/PNC had requested mortgages not be taken out on places such as Ameeniyya School, Iskandar School and Olympus.

Thoriq said that Solih's government had sold a USD 500 million Sukuk to the international market in order to pay the USD 250 million Sunny Side bond that was taken during former President Yameen's administration.

"We are now stuck with having to pay this debt, with its troubles even reaching the economy," as was stated by Thoriq.

He went on to say that the previous government withdrew USD 150 million through STO during Covid, when the economy was at its lowest point. He also said a large portion of that amount has been paid this year.