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NEW DELHI: The International Monetary Fund (IMF) warned on Wednesday that the Maldives was at “high risk of debt distress” amid heavy borrowing from China and a shift in allegiance to India under the presidency. Mohamed Muizzu.
China has promised more funding to the Maldives since pro-Beijing Muizzu took power last year.
Muizzu, who defeated the pro-Indian president Ibrahim Mohamed Solih, made his first international trip to Beijing after taking office. He thanked China after his visit for its “selfless assistance” to development funds.
Although the IMF did not provide details on the Maldives’ external debt, it said there was a need for “urgent policy adjustment”.
“Without significant policy changes, overall budget deficits and public debt are expected to remain high,” the IMF said after an assessment of the country’s economy.
“The Maldives remains exposed to a high risk of external and global debt distress.”
The IMF’s warning comes at a time when several South Asian countries are already reeling from the consequences of their massive borrowing from China.
Pakistan and Sri Lanka are saddled with billions of dollars in debt, which has exacerbated economic crises in both countries.
According to observers, both countries received billions of dollars from Beijing under the presidential mandate. Xi Jinpingit’s ambitious Belt and Roads Initiative (BRI).
The Maldives was another country that was part of China’s expansion plans, especially in the strategic Indo-Pacific region.
The world’s east-west shipping lanes pass through the nation’s chain of 1,192 small coral islands, stretching about 800 kilometers (500 miles) across the equator.
Muizzu’s mentor, former president Abdallah Yameenwho ruled the country for five years until 2018, had also borrowed heavily from Beijing for construction projects.
This borrowing left the Maldives owing 42% of its external debt of more than $3 billion to China in 2021, according to the agency. world Bankquoting the Maldives Ministry of Finance.
(With the participation of AFP)
China has promised more funding to the Maldives since pro-Beijing Muizzu took power last year.
Muizzu, who defeated the pro-Indian president Ibrahim Mohamed Solih, made his first international trip to Beijing after taking office. He thanked China after his visit for its “selfless assistance” to development funds.
Although the IMF did not provide details on the Maldives’ external debt, it said there was a need for “urgent policy adjustment”.
“Without significant policy changes, overall budget deficits and public debt are expected to remain high,” the IMF said after an assessment of the country’s economy.
“The Maldives remains exposed to a high risk of external and global debt distress.”
The IMF’s warning comes at a time when several South Asian countries are already reeling from the consequences of their massive borrowing from China.
Pakistan and Sri Lanka are saddled with billions of dollars in debt, which has exacerbated economic crises in both countries.
According to observers, both countries received billions of dollars from Beijing under the presidential mandate. Xi Jinpingit’s ambitious Belt and Roads Initiative (BRI).
The Maldives was another country that was part of China’s expansion plans, especially in the strategic Indo-Pacific region.
The world’s east-west shipping lanes pass through the nation’s chain of 1,192 small coral islands, stretching about 800 kilometers (500 miles) across the equator.
Muizzu’s mentor, former president Abdallah Yameenwho ruled the country for five years until 2018, had also borrowed heavily from Beijing for construction projects.
This borrowing left the Maldives owing 42% of its external debt of more than $3 billion to China in 2021, according to the agency. world Bankquoting the Maldives Ministry of Finance.
(With the participation of AFP)
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