Nasheed: India’s assistance genuine, different from loans that leave nation mired in debt

Parliament Speaker, former Maldivian President Mohamed Nasheed (R) with Indian Prime Minister Narendra Modi (L). (File Photo/People's Majlis)

Parliament Speaker, former Maldivian President Mohamed Nasheed has stated that the financial assistance packages announced by India on Thursday is exactly what Maldives needs, and different from loans that will leave the nation mired in debt.

He made the remark in a tweet in response to the pledge of USD 250 million in budget support and USD 500 million for the Greater Male’ Connectivity Project announced by the Indian External Affairs Minister Dr. Subrahmanyam Jaishankar earlier this Thursday.

The Greater Male’ Connectivity Project will link Male’, Vilimale’ Thilafushi and Gulhifalhu via bridges and causeways, and once complete, will be the single largest infrastructure project in Maldives.

The announcement was made during a digital video conference between Jaishankar and his Maldivian counterpart Abdulla Shahid.

Nasheed described the financial packages as “super low cost development assistance”.

He said that the financial packages are exactly what Maldives needs.

“Genuine help from a friend, to help us build critical infrastructure,” he said.

He also said that the financial packages were different from “eye-wateringly expensive commercial loans that leaves the nation mired in debt.”

Nasheed has repeatedly remarked that the loans issued by China to Maldives during the administration of former Maldivian President Abdulla Yameen Abdul Gayoom to finance Sinamale’ Bridge which connects Male’ City with Hulhumale’ and Hulhule’, and the Hiyaa Housing Project were “debt traps”.

China, in addition to issuing a low-interest loan through Exim Bank, also provided USD 72 million in non-reimbursable financial aid to finance the bridge project.

The government has previously stated that the Male’ Connectivity Project will similarly be financed through a financial package from India which will include non-reimbursable financial aid.

In addition to financial package of USD 250 million in budget support and financial package of USD 500 million for the Greater Male’ Connectivity Project, India also confirmed the renewal of quotas for import of essential commodities from India.

It was also announced that an air travel bubble will be established between Maldives and India within a week’s time, the first in South Asia; and cargo ferry services between Cochin and Kulhudhuffushi City will be operationalized within three months.

Maldivian President Ibrahim Mohamed Solih has hailed the pledge of financial assistance as “a landmark moment in Maldives-India cooperation", while Indian Prime Minister Narendra Modi has stated that that India will continue to support Maldives in mitigating the economic impact of the COVID-19 pandemic.

“Our special friendship is, and will always remain, as deep as the waters of the Indian Ocean,” he said.