Saturday
27th Apr 2024
Dhivehi Edition
President Solih. Photo: President's Office.
President Ibrahim Mohamed Solih has failed to explain his debt management strategy.
At a virtual press conference held this afternoon, President Solih was asked by Dhiyares; the sister-newspaper of The Maldives Journal; to clarify his debt management strategy.
Dhiyares reporter Ahmed Azaan pointed out that $1.8 billion USD (MVR 27 billion) had been taken out as loans in the first two years of the Solih administration.
Also, $584 million USD had been taken out as a loan with sovereign guarantees. The national debt had risen to 140% of the country's GDP.
The President was asked what his strategy was to manage all of the debts the country had taken on.
President Solih responded by blaming the previous administration. He claimed that MVR 3 billion had been "stolen" through the MMPRC scandal, and that had forced the government to take on extra loans.
President Solih also denied that he had ever promised to never burden the citizens with debt while on the campaign trail. He claimed that he had instead said that he would take on loans in the first two years of his presidency.
He also claimed that the "good effects" of these loans would be seen in the last three years of his term, and that these loans had been taken to fund the government's projects.
President Solih also responded that he saw many welcome changes in the economy. He pointed out that Dhiyares journalist Azan had criticized his June 2020 claim, made just before the Maldives went into a full lockdown, that an economic "boom" was coming. He said that the "boom" that he had predicted then had indeed come, and he said that the tourism industry was also doing well.
President Solih pointed out that the previous administration had taken out $200 million USD in loans, and that the money was due the next year and that this was a huge burden on the country. An IMF report shows that a large portion of the funds saved in the Sovereign Development Fund, set up by the previous administration, had been exchanged by the Solih administration from foreign currency to Maldivian Rufiyaa.
The President also said that $150 million USD from the loans taken from India would be converted to a grant in the following month. He said that this would lighten the burden, and allow the country to take on more loans in future. He said that 2022 would be a good year for the economy.
It is worth pointing out that the President had failed to answer the question that he had been asked.