Chinese banks ask Maldives to repay $ 10million loan, World News
Chinese bank Exim has asked the Maldives to repay a $ 10 million loan. This is part of the loan granted to former President Yameen’s ally, Sun Ahmed Shyam.
The $ 127 million loan was given as a sovereign guarantee and China is now asking the Maldives to pay an outstanding installment. The timing couldn’t be worse. The Wuhan virus hit the economy. The tourism sector is at a standstill.
So why is China asking for money now?
This is called blackmail. China is punishing the Maldives for their proximity to India.
The former president of this island country Abdullah Yameen was the puppet of China. He accelerated infrastructure projects with Chinese funds.
And in the process, Yameen had cast aside democracy and the rule of law. Take a look at the influx of money.
China has invested $ 830 million in the island country’s airport. China has built a 2 km bridge to connect the island from the airport to the male.
He also built a 25-story apartment complex and a hospital in the Maldives. Beijing sent 306,000 tourists to the Maldives in 2018
Talk about Chinese debt trap diplomacy …
Here is a question. Why the Maldives?
Because it is of strategic importance to Beijing. The Maldives have key sea routes.
It is located along the sea route from China to the Middle East.
During a visit to the Maldives in 2014, Chinese President Xi Jinping announced that the Maldives could become part of the Maritime Silk Route.
In other words, the “belt and the road” initiative.
In August 2018, 3 Chinese navy ships docked in Malé.
The Maldives have accumulated an estimated $ 1.3 billion debt to China.
This is more than a quarter of the Maldives’ GDP.
The estimates are contradictory.
In 2018, former President Mohamed Nasheed said China handed over a $ 3.2 billion bill.
“It was a bill. There was just one number, $ 3.2 billion. It was shocking,” Nasheed said. “It wasn’t just a conversation, it was a written note given, it was clear, you owe us a lot.”
In short, China’s plan was on track, until Solih’s government took over in September 2018.
Currently, the Maldives owe China billions of dollars.
What happens if he doesn’t pay back $ 10 million to China’s Exim bank?
This could affect the credibility of the Maldives.
What happens if the man pays?
This could have an impact on its foreign trade and its foreign exchange reserves.
India handed over a check for $ 5.6 million. This is the implementation of the high impact grant project. In July, the State Bank of India announced $ 16.20 million in liquidity assistance for businesses and deferred loan repayments.
But India may not be able to extend this support to all countries crushed by Chinese debts.
They can either learn from the Maldives or prepare for disaster.