Parliament Speaker, former Maldivian President Mohamed Nasheed said on Saturday that, based on the current economic situation, he believes the wisest decision for Maldives will be to restructure loans taken during 2012-2018 without additional fines.
He made the remark in a series of tweets on Saturday morning.
Nasheed said that the grace period on many of the loans taken between 2012 and 2018 will expire during the current administration.
“The danger of debt is lack of sufficient income when the time for repayment comes,” he said, expressed concern that the loan repayment period looms closer with the government facing a cease in income due to the ongoing COVID-19 pandemic.
“Most of the loans will need to be repaid from 2021-2023. I believe that, based on the current situation, the wisest way is to restructure the debt of 2012-2018 without additional fines,” he said.
Enme ginain dhakkan jehenee 2021-2023 aai dhemedhu. Alhugandu dhekey gothugai adhuge haalathuga enme buhdhiveri gothakee 2012-2018 ge dharani ithuru jurimanaa akaa nulaa binaa (restructure) kurun.— Mohamed Nasheed (@MohamedNasheed) October 10, 2020
Nasheed’s appeal comes after China granted deferment on repayment of some of the loans from May to December under the G-20 Debt Service Suspension Initiative. However, the deferments were granted solely loans taken directly by the Maldivian government, and Maldives and China are engaged in discussions for similar arrangements for commercial loans taken with sovereign guarantees.
Maldives’s debt to China is valued at USD 1.5 billion.
Maldives has taken USD 1 billion in loans from China. This includes USD 600 million in loans taken directly by the government, while the remaining are commercial loans taken by companies with sovereign guarantees.