Chinese ambassador accuses Nasheed of overstating debt

Combined file photos of (from L-R) Chinese ambassador Zhang Lizhong and Speaker of Parliament, former President Mohamed Nasheed.

Chinese ambassador Zhang Lizhong has refuted statements made by former Maldivian President Mohamed Nasheed regarding the value of the Maldivian government’s debt to China.

Speaking at an annual conference by an Indian think tank, Nasheed said the Maldivian government owed China USD 3.4 billion in loan payments for past and ongoing projects by Chinese companies.

The Chinese ambassador Zhang took to Twitter last Saturday to say he was taken aback to hear Nasheed relay such “unsubstantiated information”.

“@MohamedNasheed SHOCKED to learn the unsubstantiated information regarding China loans in today's reports. China has conducted friendly and mutual-beneficial cooperation with every government of the Maldives,” wrote Zhang.

He suggested that Nasheed was either uninformed or misinformed.

Zhang shared data published by Maldives Monetary Authority (MMA) and stated that the total foreign debt of Maldives was USD 3.21 billion, and the debt to China was USD 1.5 billion – far less than the value quoted by Nasheed.

MMA data shows the foreign debt is MVR 49.6 billion at the 1st Q of this year,equivalent to $ 3.21 billion. Total loans from China include $872 million concessional loans and $657 million preferential loans up to last Nov. it means $1.529 billion in total when projects complete. pic.twitter.com/h8JXZemEML
— Zhang Lizhong (@AmbassadorZhang) July 6, 2019

Nasheed has long since accused China of setting debt traps in an effort to gain control of the South East Asian region – a sentiment seconded by several other political and economic experts in the region – but denied by the Chinese government.

In another recent remark regarding the debt to China, Nasheed said the Maldivian government would need to allocate 15 percent of its annual budget towards repaying the debt starting from 2020.

The current administration, after coming to power, secured a USD 800 million credit facility from the Indian government. Nasheed, though he has been highly critical of the debt to China, has not made any remark regarding the huge debt to India.