Maldives' new president warns state coffers 'looted' after China-led boom
By Sanjeev Miglani
MALE, Nov 17 (Reuters) - The new president of the Maldives
took office on Saturday, declaring the state coffers to have
been looted and warned that the country was in financial
difficulty after racking up debt with Chinese lenders in an
The Maldives, famous for its luxury resorts on palm-fringed
islands, is the latest in a number of small countries where
China has invested millions of dollars building highways and
housing as part of its Belt and Road Initiative.
But these projects have left the country of just over
400,000 people in debt and prompted calls for investigations
into how contracts were awarded to Chinese companies during the
"As I take over the presidency, the state's financial
situation is precarious. The damage done due to projects
conducted only for political reasons, and at a loss, are huge,"
said Ibrahim Mohamed Solih in a speech soon after he was sworn
in as president.
Prime Minister Narendra Modi of India, which is seeking to
claw back ground in a country it considered as part of its area
of influence, was the highest ranking foreign visitor at the
ceremony held in a soccer stadium in the capital Male.
Solih, a veteran lawmaker, won the presidential election in
September as a joint opposition candidate against president
Abdullah Yameen, a strongman who steered the country closer to
China and faced international pressure over imprisoning
"The state coffers have lost several billions of rufiyaa
(local currency) due to embezzlement and corruption conducted at
different levels of the government," Solih said.
He said it wasn't clear how much the state had lost. His
transition team said this week it would conduct a forensic audit
of deals sealed by the Yameen administration, many of them with
Chinese state firms.
The big worry for Solih's team is the debt the country has
run up with Chinese lenders for projects such as a mile-long sea
bridge connecting the airport to the capital, the airport
expansion itself and massive housing projects on reclaimed
Solih's transition team said it had been told the country
owed $1.5 billion to Chinese lenders, but fear it could be much
higher. Even a debt of $1.5 billion would be more than a quarter
of the country's annual gross domestic product.
Modi told Solih that India stood ready to help the Maldives
through its economic difficulties, the Indian foreign ministry
said in a statement following their meeting.
India, which has long been the Maldives' main political and
economic partner, had grown concerned that China's expansive
diplomacy was aimed at establishing an outpost on the islands.
China has already gained a strong foothold in Sri Lanka,
just off the southern coast of India, where it has a built a
port and now controls it in a debt-for-equity swap.
Modi and Solih agreed the two countries would be mindful of
each other’s concerns and the need for stability in the Indian
Ocean, the Indian foreign ministry said in the statement.
China has said it hoped there would be continuity in
policies during Solih's presidency and it would create good
conditions for Chinese firms.
(Additional reporting by Mohamed Junayd, editing by Louise
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