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China defends ‘completely normal’ Maldives investments

The three largest Chinese projects are together worth $1.5 billion and there will be repayment problems, a think-tank says.

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Chinese investments in Maldives resorts are “completely normal,” the country’s ambassador said, rejecting claims of land grabs and debt traps.

Ambassador Zhang Lizhong was speaking last week at a forum aimed at promoting tourism ties between the two countries. China has been the largest supplier of tourists for eight consecutive years and more than 300,000 Chinese tourists visit the archipelago every year, he said.

But the world’s second biggest economy, which has a mammoth infrastructure project spanning dozens of countries, has also been charged with land grabbing in the Maldives and dragging it into a debt trap.

China has previously hit back at both accusations, but its ambassador went on the defensive again.

There were no political conditions attached to any investments or projects, he insisted, and the partnership was open, inclusive and transparent.

“I want to announce here that the numbers of resorts developed by Chinese enterprises in Maldives is no more than seven. Chinese enterprises only involved in the operations of few resorts, which are completely normal investments.

“The total cost of China-Maldives Friendship Bridge is 1.26 billion RMB (US$224.2 million) and 57.5% of the cost is grant by the Chinese government, 36.1% is preferential loan from Chinese government and 6.4% is from the Maldivian side.”

The bridge would be completed this month and would officially open to traffic in the second half of this year, he said. The upgrade and expansion of Velena International Airport’s runway was almost complete, with a scheduled test flight at the end of August.

“The 16 buildings of 7,000 apartments housing project of Hulhumalé Phase II is under construction and 8 buildings will be completed at the end of this year. The link road between Hulhule énd Hulhumalé is in progress orderly and will be put into use in the second half of the year.”

The IMF and World Bank say such projects have the capacity to transform the Maldivian economy, but are concerned about the high debt being fuelled by the infrastructure scale-up.

Gateway House, a think-tank in Mumbai, says Chinese investments and aid to the Maldives have surged since 2012.

Its research says the three largest Chinese projects are together worth $1.5 billion and that there will be repayment problems.

 

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