As of March this year, Maldives’ state debt had reached MVR 86.3 billion.
If this debt is divided per capita – as per the latest census figures – every Maldivian citizen is indebted by MVR 224,000.
As per the debt statistics publicized by the Ministry of Finance, MVR 44 billion of the total debt is domestic debt, while MVR 41 billion is external debt. And while MVR 68 billion of the total debt is made up by the various loans and debts taken on directly by the State, MVR 18 billion is from loans for which the Maldivian government has given a sovereign guarantee.
Whilst the Maldives’ GDP is expected to generate MVR 66 billion this year, the country’s debt in relation to GDP is at 130 percent.
Of the debt taken from foreign lenders, the most have been taken from India. Indian loans make up USD 1.8 billion, or MVR 28 billion. Moreover, if the USD 150 million bond issued to the State Bank of India branch in Maldives, and the currency swap facility signed between the central banks of both nations is taken into consideration, Maldives must repay USD 2.4 billion to India.
This is a number greater than 50 percent of the nation’s GDP.
President Ibrahim Mohamed Solih was elected to power due to his promise that he would not put the people of the Maldives in debt. However, since he came to power, the country’s debt has increased exponentially. For instance, by the end of 2018, Maldives’ state debt was at MVR 60.2 billion. Within two years into the Solih presidency, this number has increased to MVR 86 billion. This is an increase of MVR 26 billion. This is the first time in recent history that the nation’s debt has risen this drastically in such a short period of time.
It is noteworthy that when President Solih was asked about his debt management policy during a press conference, he proved unable to answer the question.