New Maldives government to begin untangling secret building deals with China amid warnings of ‘land grab’ and US$3 billion debt
- Unprecedented investment under the ‘Belt and Road Initiative’ was agreed under secret terms, without other bids and at inflated prices that raised questions of corruption
- Critics of China’s massive infrastructure programme say it is mainly designed to further Beijing’s diplomatic and security objectives, and that poorer countries could be forced to surrender land or other resources as collateral
Fresh off his surprise election victory in the Maldives, president-elect Ibrahim Mohamed Solih had a warning for his economic team. The island nation had racked up huge debts to China during an unchecked, five-year building spree by the autocrat he had just defeated.
“Be prepared for it to be worse than we think,” one adviser recalled Solih saying.
He was right. Soon after the September 23 election, Solih met the Chinese ambassador and learned that the Maldives owed the Chinese government not US$1.5 billion, as had been widely estimated, but nearly US$3 billion. That’s more revenue than the Maldivian government raises in two years – a staggering figure that makes the diffuse island chain a prime example of how Chinese loans have swamped smaller economies.
As Beijing has pursued its “Belt and Road Initiative” – a massive infrastructure-building programme spanning dozens of countries – it found perhaps its most pliant partner in the president of the Maldives, Abdulla Yameen Abdul Gayoom, who silenced opposition and shrugged off corruption allegations while steering his country firmly into China’s orbit.
With minimal oversight, Yameen leased an island near the capital to Beijing at a cut-rate price and invited Chinese state-owned developers to build a mile-long bridge, thousands of flats and a new runway, fuel farm and passenger terminal at the main international airport.
It was more construction, more quickly, than had ever been seen in this Indian Ocean archipelago of fewer than 500,000 people. And nearly all of it was done under secret terms, without other bids and at inflated prices that raised questions of corruption, according to people with knowledge of the contracts.
We have to find out exactly what happened, because nobody really knows. It’s a huge amount of money
Details of the debt – and how much might have been stolen – will only begin to emerge after Solih takes office on November 17 and his aides gain complete access to documents Yameen’s government hid from lawmakers and the public. But information already collected by Solih’s transition team indicates the liabilities are greater than initially believed and will soon outpace the islands’ ability to pay.
