Amid grim forecast, Maldives says it is ‘well prepared’ to avert default
India and China “very sensitive” and willing to help the island nation, top Ministers note
Image credit :- thehindu
India and China have expressed a strong willingness to assist the Maldives amid ongoing economic challenges, according to top officials. The Maldives is currently facing a potential default on its sukuk bonds, with financial pressures mounting as the country grapples with significant debt levels. Indian officials have indicated that the Maldives can access $400 million from a currency swap program and potentially seek additional long-term loans under a previously established line of credit.
The Maldives' new administration, led by President Mohamed Muizzu, is navigating a complex geopolitical landscape. Despite Muizzu's initial anti-India stance and inclination towards strengthening ties with China, both nations have shown readiness to provide support. This cooperation highlights the delicate balance the Maldives must maintain between its two powerful neighbors, especially as it seeks to stabilize its economy.
In recent discussions, the Maldives has also explored the option of settling import payments in local currencies with both India and China. This move is aimed at reducing reliance on the US dollar and preserving foreign exchange reserves, which have dwindled significantly. The Maldivian government imports substantial goods from both countries, making this arrangement potentially beneficial for all parties involved.
China's involvement in the Maldives has been marked by military and economic agreements, including a recent defense cooperation pact that raises concerns in New Delhi. The strategic competition between India and China in the Indian Ocean region underscores the importance of the Maldives as a focal point in their rivalry. India has been proactive in offering support to the Maldives, particularly in light of the island nation's economic crisis, which has been exacerbated by previous diplomatic tensions with India.
As the Maldives prepares for discussions with Indian officials, the potential for increased financial assistance remains a key topic. The situation reflects broader regional dynamics, where both India and China are keen to solidify their influence in the Indian Ocean, while the Maldives seeks to navigate its economic and diplomatic challenges effectively.
