Sunday 29th Jan 2023
Dhivehi Edition
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State Debt

Maldives' financial crisis deepens as debt to India surpasses MVR 40 billion

The Maldives' debt to India has reached a staggering MVR 40 billion (approximately USD 2.5 billion), according to Foreign Minister Shahid. Speaking at an event to inaugurate the Hanimaadhoo development project, Shahid stated that in the past four years, India has provided the Maldives with "aid" of USD 2.7 billion.
However, out of that amount, only USD 173.7 million was grant aid, with the remaining amount being loans, despite Shahid's characterization of them as aid as well.
The Maldives' government debt to India has skyrocketed since President Solih assumed office in 2018. However, the government has failed to disclose the terms of most loan agreements. Just last month, the government issued a bond of USD 100 million to the State Bank of India and borrowed an additional USD 200 million from the Reserve Bank of India.
Shahid claimed that the government is using the money from these loans to conduct various infrastructure projects, but it is unclear if the country will be able to pay off the debt in the near future. The increasing debt to India is a cause for concern for Maldives and its people.