Maldives- China relations

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Nov: Maldives unaware of what it owes China

After building spree, just how much does the Maldives owe China? Solih govt is clueless, November 24, 2018: The Times of India

The new government of the Maldives says it has no idea how much it owes China, which has led a construction spree in the tiny Indian Ocean nation, but fears the debts run up in the past five years could be unsustainable.

Mohamed Nasheed, a former president now serving as advisor to new President Mohamed Ibrahim Solih, said that the Chinese ambassador to the Maldives, Zhang Lizhong, handed the government an invoice for $3.2 billion — equivalent to around $8,000 for every inhabitant of the archipelago. China denies that, however, and says the number is closer to $1.5 billion. “It was an invoice. It just had a figure, $3.2 billion. It was shocking,” said Nasheed. “It wasn’t just a conversation, it was a written note handed over, it was clear, you owe us this much.”

Nasheed said Zhang gave Solih the note at a meeting on October 6, days after his stunning election victory over former President Abdulla Yameen. He did not give further details of exactly how the note was worded. Asked about Nasheed’s comments, China’s foreign ministry said that its ambassador in the Maldives had rejected “this untruth” in statements to local media, referring to an interview with news website Avas in which Zhang was quoted as saying reports of debt of around $3 billion were “deeply exaggerated”.

China has underwritten millions of dollars in loans for infrastructure in the Maldives, located along its busy shipping route to West Asia.

But the unprecedented building boom in the island chain of around 400,000 people stoked fears it was loading up on debt and prompted a strident opposition campaign that helped Solih defeat Yameen in an election in September.

After taking office at the weekend, Solih’s administration has said the country’s finances are in worse shape than expected, and that it will take weeks or months to untangle details of all the deals struck with Chinese firms.

“We are at a loss to understand how much we really owe to China,” said Nasheed.

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