Nasheed calls for Maldives' debt to be restructured without additional fines

Parliament Speaker, former President Mohamed Nasheed (R) with President Ibrahim Mohamed Solih (L) at the Viyavathi Councilors' Conference in Crossroads Maldives on December 15, 2019. (File Photo/Sun/Mohamed Muzain Nazim)

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.

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.