Maldives’ new president warns state coffers ‘looted’ after China-led boom

MALE (Reuters) – The brand new president on the Maldives took office on Saturday, declaring the state coffers to own been looted and warned that the country was in financial difficulty after accumulating debt with Chinese lenders within the infrastructure boom.

The Maldives, renowned for its luxury resorts on palm-fringed islands, could be the latest in numerous small countries where China has invested vast amounts building highways and housing as part of its Belt and Road Initiative.

But these projects have ended the region of around 400,000 people debt and prompted involves investigations into how contracts were awarded to Chinese companies through the previous administration.

“Once i take control of the presidency, the state’s finances are precarious. The wear and tear done due to projects conducted just for political reasons, as well as at a reduction, are huge,” said Ibrahim Mohamed Solih in a very speech shortly afterwards he was sworn in as president.

Prime Minister Narendra Modi asia, which happens to be seeking to claw background from a country it thought to be element of its part of influence, was the best ranking foreign visitor along at the ceremony kept in a soccer stadium within the capital Male.

Solih, a veteran lawmaker, won the presidential election in September being a joint opposition candidate against president Abdullah Yameen, a strongman who steered the country even closer China and faced international pressure over imprisoning political rivals.

“Hawaii coffers have lost several immeasureable rufiyaa (local currency) caused by embezzlement and corruption conducted at different levels of the government,” Solih said.

He stated it wasn’t clear how much the state of hawaii had lost. His transition team said immediately may well conduct a forensic audit of deals sealed through the Yameen administration, a lot of them with Chinese state firms.

The big worry for Solih’s team is the debt the nation has increase with Chinese lenders for projects such as a mile-long sea bridge connecting the airport into the capital, the airport expansion itself and large housing projects on reclaimed islands.

Solih’s transition team stated it had been told the country owed $1.5 billion to Chinese lenders, but fear it might be much higher. Obviously any good debt of $1.5 billion could be over the quarter in the country’s annual gross domestic product.

Modi told Solih that India stood able to assist the Maldives through its economic difficulties, the Indian foreign ministry said inside of a statement following their meeting.

India, that has been the Maldives’ main political and economic partner, had grown concerned that China’s expansive diplomacy was aimed towards establishing an outpost for the islands.

China already has gained a very good foothold in Sri Lanka, just off the southern coast asia, where it possesses a built a port and now controls it in a debt-for-equity swap.

Modi and Solih agreed the two countries would be tuned in to each other’s concerns along with the require for stability in the Indian Ocean, the Indian foreign ministry said within the statement.

China claims it hoped there would be continuity in policies during Solih’s presidency plus it would create good conditions for Chinese firms.

(Additional reporting by Mohamed Junayd, editing by Louise Heavens)

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