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‘China loans are not a debt trap’: finance minister

Finance Minister Ibrahim Ameer said no loans borrowed from foreign parties expose state assets to mortgage risk. He made the statement while addressing Parliament’s Public Finances Committee on Monday.

Western countries have repeatedly labeled loans borrowed from China as “debt traps,” a view shared by Maldives Parliament Speaker and former Maldives President Mohamed Nasheed. The spokesman said that the Chinese government-funded development projects are also debt traps, and the government has not directly responded to the allegations.

However, responding to a question from Maradhoo MP Ibrahim Shareef in the finance committee on Monday, Minister Ameer said no loan would jeopardize the state’s assets.

“Other countries around the world have relevant underlying assets like mortgages. But the loans are still unsecured loans; there is no underlying asset. There is no asset that can be confiscated even if the loans default,” he said.

“Other countries in the world have done it. In my time as finance minister since 2019, we have also received mortgage proposals [assets] Earned $200 million. We reject these offers. We borrow based on economic health,” he added.

“Whether China or another country, we look at the cost of borrowing. It doesn’t matter where [we are borrowing from]which country it is,” the minister said.

The Maldives was the largest borrower from China during President Abdulla Yameen Abdul Gayyoom’s tenure. Chinese banks provided loans for the development of Hiyaa Housing and Velana International Airport.

Richard Dement

The author Richard Dement