Both India and the Maldives also reassured each other that they will continue to be mindful of each other’s concerns and aspirations for the stability of the region and not allowing their territories to be used for any activity inimical to the other
Prime Minister Narendra Modi on Monday announced a provision of financial assistance up to $1.4 billion to the Maldives. The assistance will be given in form of budgetary support, currency swap and concessional lines of credit.
According to Strategic News International, the Presidential Spokesperson Ibrahim Hood said, “$200 million is for immediate budgetary support, $50 million of which is in the form of a grant. India will buy Maldivian treasury bonds for the remaining $150 million. The currency swap deal has been increased to $400 million from $200 million. A line of credit of up to $800 million has been earmarked for development projects—the ‘worthiness ‘of which the Government of Maldives will decide on. This $800 million can be sought as credit by the Maldivian Government on concessional terms, perhaps at interest rates as low as 1.5%.”
The announcement for the assistance came just a day after Maldivian President Ibrahim Mohamed Solih said in New Delhi that India is not only their “closest friend” but also the largest trading partner.
One of the immediate benefits of the provision will be the budgetary support as the Maldives is going through a crisis. Foreign Minister Abdulla Shahid had told SNI last month that the country needs $250-350 million in order to handle the difficult budgetary situation.
“We’re left in a situation where the country is facing real hardship. This information was shared with PM Modi immediately after the oath-taking ceremony (November 17, 2018) by President Solih. We need this immediate budgetary support in order to sustain the services of the government that it has to essentially provide. We also came into office with a lot of pledges of providing infrastructure to the people—basic infrastructures like fresh water, sewerage, housing, and access to islands and harbours. These are pledges we will have to deliver. In order to deliver these, we need generous assistance of India and many of our other friends in the international arena,” Shahid added.
The country’s finance minister Ibrahim Ameer announced that Maldives national debt is $3.7 billion in December.
Meanwhile, Solih in a joint statement stressed on his government’s “India-First Policy” and said that the country is committed to working closely with India. He, appreciating the generous assistance, identified various areas for developmental cooperation. This includes private sector involvement in the development of housing and infrastructure, water and sewerage systems in the outlying islands, healthcare, education and tourism.
On Sunday, Solih also declared that the Maldives is open for business at a meeting with top corporate leaders in Delhi. Prime Minister Modi also welcomed the expanding opportunities for Indian companies to invest in the Maldives in different sectors.
On the security front, the two leaders agreed on the importance of maintaining peace and security in the Indian Ocean Region. They also reassured each other that both the countries will continue to be mindful of each other’s concerns and aspirations for the stability of the region and not allowing their territories to be used for any activity inimical to the other.
Originally published on Strategic News International
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