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Agence France-Presse

The Maldives is seeking a “diplomatic” solution to restructure its Chinese debt as the small but strategically located atoll nation struggles with repayments, the foreign ministry has said.
Former strongman president Abdulla Yameen relied heavily on Beijing to provide financial support during his five-year term and his successor’s party has accused China of a land grab in the country.
Foreign Minister Abdulla Shahid said on Thursday that China was a generous donor, but the previous Maldivian government borrowed heavily without adequate provisioning for repayments.
Speaking in Sri Lanka’s capital Colombo, he said the direct loans as well as government guarantees to state-owned enterprises on their loans from China amount to a debt of some US$1.4 billion.
This was a large burden for the nation of 340,000 Sunni Muslims, he said.
“Borrowings by the previous government [of president Abdulla Yameen] were unreasonable and put us in difficulty,” Shahid said. “But, we can solve this mess through diplomatic means.”
The pro-Beijing Yameen was jailed last month for five years and fined US$5 million for corruption during his term that ended late last year.
“We could have a debt restructuring in the future. I am in contact with the Chinese government and I am confident that we can reach a diplomatic understanding.”
Why China’s belt and road loans may not be the debt trap other countries fear
Shahid is visiting Sri Lanka for talks with Sri Lanka’s new leaders – President Gotabaya Rajapaksa and his prime minister brother Mahinda – who also borrowed heavily from China during their previous term in office between 2005 and 2015.
The former Sri Lankan government handed over control of the Hambantota port in the south of the island to a Chinese company on a 99-year lease in December 2017.
It said it was unable to service a US$1.4 billion debt from Beijing to build the loss-making harbour.
The port was one of a string of infrastructure projects in Asia, Africa and Europe being funded under China’s Belt and Road Initiative, which critics say is saddling nations with debt.
The new president has publicly declared that he opposed handing over control over a strategic asset to China and said he wanted the deal renegotiated. He has not given details.


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Belt and Road Initiative

Maldives looks for new deal on China debt

Maldives Foreign Minister Abdulla Shahid says China was a generous donor, but the previous Maldivian government borrowed heavily without adequate provisioning for repayments. Photo: AFP

Faced with a mounting economic crisis, the cash-strapped Maldives is looking to renegotiate its piles of Chinese debt

A construction worker looks on at the China-funded Sinamale bridge in the Maldives. Photo: Reuters

(181118) -- MALE, Nov. 18, 2018 (Xinhua) -- Maldives' newly sworn-in President Ibrahim Mohamed Solih (R) shakes hands with Chinese President Xi Jinping's special envoy and Minister of Culture and Tourism Luo Shugang during their meeting in Male, Maldives, on Nov. 18, 2018. (Xinhua/Zhu Ruiqing)

(180830) -- MALE, Aug. 30, 2018 (Xinhua) -- Photo taken on Aug. 30, 2018 shows the aerial view of the China-Maldives Friendship Bridge, in Maldives. The China-Maldives Friendship Bridge, the first cross-sea bridge in the Maldives, opened to traffic on Thursday evening. The bridge is an iconic project of the Maldives and China in co-building the 21st Century Maritime Silk Road. (Xinhua/Wang Mingliang)

Next Hambantota? Welcome to the Chinese-funded US$1.4 billion Port City Colombo in Sri Lanka

A rendering of the Colombo Port City project in Sri Lanka, which is financed by the China Communications Construction Company. Photo: Handout

(190116) -- COLOMBO, Jan. 16, 2019 (Xinhua) -- Chinese Dredgers work at the construction site of the Colombo Port City project in Colombo Port City, Colombo, Sri Lanka in this June 20, 2018 file photo. A China-funded port city being constructed in Sri Lanka's capital Colombo has completed the reclamation of land from the sea and will soon be ready for the second phase, China's CHEC Port City Colombo (Pvt) Ltd. said on Wednesday. (Xinhua)

Sri Lankan activists stage a demonstration demanding the scrapping of a 1.4 billion dollar Chinese investment to reclaim the sea and build a new city known as the Port City, in the capital Colombo on March 3, 2015. The new government has ordered a review of the controversial project which formally began construction in 2014 despite allegations of environmental damage due to land reclamation. AFP PHOTO / ISHARA S. KODIKARA

(190424) -- BEIJING, April 24, 2019 (Xinhua) -- Photo taken on March 23, 2019 shows the storage yard of the Hambantota Port in Sri Lanka. (Xinhua/Tang Lu)

Sri Lankan cricketer Mahela Jayawardene walks back to the pavilion after his dismissal during the third and final One Day International (ODI) cricket match between South Africa and Sri Lanka at the Mahinda Rajapaksa International Cricket Stadium in Hambantota on July 12, 2014. AFP PHOTO/ Ishara S. KODIKARA

People stand at the sea front of Galle Face Green as the construction site of the Colombo Port City development stands in the background in Colombo, Sri Lanka, on Saturday, April 22, 2017. Once fought over by European powers, Sri Lanka is now benefiting from the attention of Asia's biggest economies, drawn to its Indian Ocean location along some of the world's busiest sea-lanes. The Chinese-financed $1.4 billion Colombo Port City project is its largest foreign-funded investment on record and Hong Kong-based Shangri-La Asia Ltd. is building an upmarket $400 million beachfront resort on Colombo's main "Galle Face" beach front. Photographer: Taylor Weidman/Bloomberg

Sri Lankan President Gotabhaya Rajapaksa plays downs links with China on trip to India

Gotabhaya Rajapaksa was elected Sri Lankan president in November. Photo: AFP

(FILES) In this file photo taken on August 2, 2011, a barge is berthed at the new port in Hambantota. Sri Lanka will move its southern naval command to a port leased to a state-run Chinese firm but China will not use it for military purposes, the prime minister's office said June 30. / AFP PHOTO / Lakruwan WANNIARACHCHI

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New administration aims for a diplomatic resolution to heavy borrowing under previous president



New administration aims for a diplomatic resolution to heavy borrowing under previous president.
