President Ibrahim Mohamed Solih has said that his government had been forced to take on huge loans to conduct development projects, as the money acquired from the sale of islands through Maldives Marketing and Public Relations Corporation (MMPRC) had not been transferred into the right accounts and thus been rendered inaccessible to the incumbent administration.
President Solih made the remarks while answering a question from media at a press conference held at the President's Office on Wednesday. The President revealed that the Maldives was MVR 86.5 billion in debt right now, which included a debt of MVR 66 billion without sovereign guarantee.
Alluding to when his administration took office, President Solih said that his government had virtually no finances within the state budget to conduct development projects when he first assumed the presidency. He also added that the government had been very transparent with their intentions to acquire more loans to finance these projects in the past. President Solih went on to assure that the benefits of those loans would become apparent within the next two years.
The President noted that his administration's plans to run the country had been severely derailed with the onset of the Covid-19 pandemic. In answering a question presented by media, President Solih stated that taking this many loans would not have been necessary had MMPRC losses been accounted for, namely the roughly MVR 3 billion missing from state funds from the sale of islands through grand corruption under former president Abdulla Yameen Abdul Gayyoom's administration.
Further shedding light on the issue, President Solih said that the Yameen administration had acquired a loan of more than USD 200 million at very high interest rates, and that paying it back would fall on his administration in the coming year. President Solih acknowledged that this would be a very difficult endeavor, and noted that the money being accumulated in the sovereign fund was reserved to tackle that specific debt. Noting additional financial losses incurred under the previous administration, the President also remarked on Maldives Monetary Authority (MMA) having to pay over USD 200 million in the GMR case as well.
Restating the difficulties with debt looming ahead, President Solih revealed that the hope was to have repayment of the loan delayed by an additional five years, and that his administration was hopeful to secure that outcome. President Solih also confirmed that work was being done to have USD 150 million taken as loans from India converted into grants, and expressed surety that the conversion would ease the Maldives' debt situation considerably.
During the presser, President Solih remarked that the Maldives' economy was now slowly recovering from the devastating impact of the global Covid-19 pandemic. The President noted that while his administration had received criticism for projecting the start of economic recovery for the end of last year, the prediction had held true. President Solih went on to express hopes that the Maldives' economy would be even more robust by the end of 2021, and declared that 2022 would be a year where citizen's concerns about the nation's finances would be eased significantly.
