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MALE (Reuters) – The new president of the Maldives took office on Saturday, declaring that state coffers had been looted and warning that the country was facing financial difficulties after being in debt with Chinese lenders in the country. part of an infrastructure boom.
Maldives President-elect Ibrahim Mohamed Solih (left) swears in front of Chief Justice Dr. Ahmed Abdulla Didi (right) during the swearing-in ceremony in Male, Maldives on November 17 2018. REUTERS / Ashwa Faheem
The Maldives, renowned for their luxury resorts on palm-fringed islands, are the latest in many small countries where China has invested millions of dollars for the construction of highways and housing as part of its Belt initiative. and Road ".
But these projects indebted a little over 400,000 people in the country and prompted inquiries into how contracts were awarded to Chinese companies under the previous administration.
"When I assume the presidency, the financial situation of the state is precarious. The damage caused by projects carried out solely for political reasons and at a loss is enormous, "Ibrahim Mohamed Solih said in a speech shortly after his appointment as president.
Indian Prime Minister Narendra Modi, seeking to reclaim land in a country considered part of his zone of influence, was the highest-ranking foreign visitor at the ceremony held in a stadium. football in the capital, Male.
Solih, a former lawmaker, won the presidential elections in September as a joint opposition candidate against President Abdullah Yameen, a strong man who brought the country closer to China and faced international pressure for the imprisonment of his political rivals.
"State coffers have lost several billion rufiyaa (local currency) because of embezzlement and corruption perpetrated at different levels of government," Solih said.
He said it was not clear what the state had lost. Its transition team announced this week that it will carry out a forensic audit of transactions concluded by the Yameen administration, many of which are with Chinese state-owned companies.
The main concern of the Solih team is the country's debt to Chinese lenders for projects such as a multi-kilometer sea bridge connecting the airport to the capital, the expansion of the airport itself and large-scale housing projects on reconquered islands.
Mr. Solih's transition team said he was told that the country owed $ 1.5 billion to Chinese lenders, but feared that it would be much higher. Even $ 1.5 billion of debt would be more than a quarter of the country's annual gross domestic product.
Modi told Solih that India was ready to help the Maldives overcome their economic difficulties, the Indian Foreign Ministry said in a statement at the end of their meeting.
India, which has long been the main political and economic partner of the Maldives, was concerned that China's expansive diplomacy was aimed at establishing an outpost on the islands.
China is already well established in Sri Lanka, off the south coast of India, where it has built a port and now controls it by converting its debt into equity.
Modi and Solih agreed that both countries would be aware of everyone's concerns and the need for stability in the Indian Ocean, said the Indian Foreign Ministry in his statement.
China said it hoped that the policies followed during the Solih presidency would be maintained and that this would create good conditions for Chinese companies.
Additional report by Mohamed Junayd, edited by Louise Heavens
