Finance Minister: Maldives will not face sovereign default

Finance Minister Ibrahim Ameer. (Sun Photo/Mohamed Muzain Nazim)

Finance Minister Ibrahim Ameer stated he has full confidence Maldives will not default on its loans. 

In an appearance on RaajjeTV on Monday night, Ameer dismissed speculation regarding the debt situation. 

“The current talk is discourse aimed at taking the shine off our work,” he said. 

Ameer said that as the state seeks investors, all investors base their decisions on the effectiveness of state’s financial policies. 

“Investors will look at how the Maldivian economy is performing, our debt situation, our deficit. They will look at all this before deciding to invest in Maldives,” he said. 

Ameer said that if Maldives goes into sovereign default, the state will need to find a way to pay back its debt by exploring income sources. 

“If we face a default, we will need to make the repayment somehow with the income generated by the state. Maldives has never faced something like that in its long history. We regularly service our debt,” he said. 

Ameer also denied rumors the government plans on putting up assets such as school and office buildings as collateral for loans.  

He said they were baseless allegations spurred by politicians. 

“I want to make it very clear to all Maldivian people, we have no intention of putting up Maldivian assets as collateral for loans,” he said. 

Ameer said that the government is exploring ways to fill the financing gap. 

“If the expenditure is high, we will need to fill the financing gap. We will the financing gap by securing finds from overseas. The option for raising funds is to either secure grants or raise funds by going to the market,” he said. 

Ameer said that while the government has the option of putting up assets as collateral when seeking loans, no Maldivian administration has done so. 

“We may secure finance by selling sukuk, but have no intention of securing finance through collateral,"” he said. 

Ameer has repeately defended the government's financial policies. When presenting the state budget for 2021 back in November last year, Ameer said that while it is undeniable that Maldives faces mounting debt and other economic obstacles, the challenges aren't unique to Maldives, and isn’t resulting from an issue with the government’s policies.