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A total of US$600 million was secured by the government on its recent state visit to India, according to the foreign minister Ahmed Shaheed
(pic). He has described the trip as “eminently successful”.
In addition to the original US$100 million pledged by India, Shaheed said he was “almost certain” the government would be given a US$300 million loan from the State Bank of India in the Maldives.
A further loan for traders had been obtained from the Export-Import Bank of India, he said, while government officials had also met with “captains of industry” who were keen to invest in the Maldives.
“So if we look at all this, we are looking at a very practical injection of US$600 million."
Regarding the US$100 million, the foreign minister signed a bilateral agreement for the amount. He added the sum would be “dispensed shortly”.
Shaheed said half of this loan was interest-free while the other half had a “very very low” interest rate of 1.5 per cent.
One of the provisions of the credit was that half of the money should be spent on imports from India. The remainder, said Shaheed, was for the government to spend as it pleased.
According to Shaheed, President Mohamed Nasheed had informed those who had travelled with him to India that the money should be used “to set the bills in order”.
“Plugging the budget deficit is a top priority,” said Shaheed. “And this will ease the dollar shortage.”
The loan comes at a time of great financial difficulty for the Maldives, which currently has a budget deficit of Rf1.4 billion.
Fazeel Najeeb, governor of the Maldives Monetary Authority (MMA) recently confirmed the bank had loaned the government Rf203 million to offset the huge deficit which they had inherited from the previous administration.
The money, said Shaheed, would go towards this three-month loan.
Following the trip, the foreign minister was very optimistic about the future economy of the country. “In 18 months, we should be looking at a very rosy picture,” he said.
President Nasheed made the administration’s first state visit to India this month.
During his three-day trip, he met a host of dignitaries including the Indian President Shrimathi Pratibham Devesingh Patil, Prime Minister Manmohan Singh and Shrimathi Sonia Gandhi, president of the Indian National Congress.
Besides securing much-needed funds, the Maldives foreign minister said the visit to India by the Maldives president was made to “celebrate our democratic credentials”.