Nasheed plans to renegotiate Chinese debt

Former president Mohamed Nasheed said he will renegotiate the Maldives’ debt to China, accusing Beijing of dragging Maldives into a debt trap.

Nasheed, who won the main opposition Maldivian Democratic Party’s presidential ticket after a party referendum last month, told Reuters that a government formed by the opposition would not be able to repay the loans without a review.

The total loans to build infrastructure, provided by China’s Exim bank, should be “easily more than US$2.5 billion,” which is equivalent to the country’s gross domestic product.

“There is no way whatsoever we would be able to do that in 2020 and no one is going to give us the money,” Nasheed said, “None of the Chinese projects have been tendered. We do not know the amount, we do not know the terms, we do not know who is taking it and we do not know the government’s obligation on it.”

“We would have to renegotiate. It is a big cheat. We can’t agree to pay this amount. But we will pay the real amount.”

According to Mumbai-based foreign policy think-tank, Gateway House, the three largest Chinese projects in the country are worth more than US$1.5 billion or 40 percent of the country’s GDP.

“This will inevitably cause repayment problems, as visible in Sri Lanka, another country deep in debt to China,” Gateway House said in a report published February.

While Nasheed and the MDP are gearing up for the presidential poll, the Elections Commission has refused to accept the results of the MDP primary that awarded Nasheed the party’s candidacy.