President Ibrahim Mohamed Solih, on Wednesday, stated that the government would negotiate with China to ensure that the terms of previously signed agreements between the two nations would be favourable to Maldives.
Speaking at the first press conference held at the President’s Office since his inauguration, President Solih expressed his belief that renegotiation would not hinder diplomatic relations or interfere with ongoing China-backed projects in Maldives.
The government’s main efforts are to lengthen the repayment period of Chinese loans and cut down interest rates. According to the administration, loans taken during the previous administration had short repayment periods and carried high-interest rates.
President Solih assured that the government did not intend to use recently acquired financial aid from India to repay loans taken from China. Solih stated that the financial aid received could be repaid and would not burden the budget.
Solih announced that the government would attempt to lease the 150 islands designated for tourism development in order to increase state revenue.
According to the Ministry of Finance, the previous administration borrowed a total of USD 3.7 billion (MVR 57 billion) as loans and guarantees out of which USD 1.4 billion was sourced from the Chinese government. This includes concessional loans and sovereign bonds.
Several members of the then opposition coalition had expressed their concerns over China's “debt trap” diplomacy, some stating their belief that the biggest struggle faced by President Solih during his term would be paying back the debt owed to the Chinese government.