President Ibrahim Mohamed Solih defended Wednesday financial assistance of US$1.4 billion secured from India during his recent state visit, dismissing opposition criticism over debt and sovereignty.
“I want to assure the Maldivian people today that the nation will not be further indebted because of this,” Solih said in his first press briefing since assuming office last month.
The Indian assistance includes US$200 million as budget support to ease cashflow constraints, of which US$50 million was grant aid and US$150 million would be invested in treasury bills and bonds at a 1.5 percent interest rate, he said.
For the rest, India opened a line of credit up to US$800 million to finance infrastructure projects, and an existing currency swap arrangement was increased to US$400 million to shore up the foreign currency reserve.
He stressed that the loans would be offered at concessional terms. “When contractors are taken for projects carried out with these loans, we have agreed that having a Maldivian partner would be obligatory,” he added.
The new administration would not enter any agreement that undermines Maldivian independence and sovereignty, President Solih declared, dismissing reports of allowing foreign military bases in the country as “completely untrue.”
The Maldives did not sign any reciprocal agreements aside from visa facilitation, he said.
The official visit to India this week was hailed as the beginning of a “new era” of diplomatic relations with the giant neighbour.
Historically close ties were strained under former president Abdulla Yameen, who forged a partnership with India’s rival China and secured financing for flagship infrastructure projects, stoking fears in New Delhi of loss of influence and possible military bases in its backyard.
The Indian funds would not be used to pay down an estimated US$1.5 billion owed to China, Solih said.
The president went on to address the controversy over two Indian helicopters, which the previous administration wanted India to take back amid speculation of unauthorised military uses.
The helicopters are operated by Indian pilots but used as directed by Maldivian authorities for medical evacuations and search and rescue operations, Solih said.
The agreement for the helicopters were renewed by the administrations of both former presidents Abdulla Yameen and Dr Mohamed Waheed, he noted.