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Modi gives $1.4 billion aid to Maldives amid worry over Male's China debt

Maldives has loaded up on debt that could be anything from $1.5 billion to more than $3 billion

Reuters  |  New Delhi 

When Ibrahim Mohamed Solih becomes president, a new chapter will begin - for  India
Maldives' president Ibrahim Mohamed Solih

will give financial assistance of $1.4 billion to the Maldives, said on Monday, the biggest aid yet to the island nation that is grappling with debt from a Chinese building spree.

Modi made the announcement after talks with Maldives' new president, Mohamed Ibrahim Solih, who defeated the pro-strongman in a surprise election result in October and is trying to reset ties with

During a five-year construction boom in the Maldives, built a sea bridge connecting the capital, Male, to the main airport and is developing the airport itself, as well as building housing on land reclaimed from the sea.

But the fast-paced building activity has stoked fears that the has loaded up on debt that could be anything from $1.5 billion to more than $3 billion.

Solih's administration has said it is trying to find out just how much the country of 400,000 people owes

Modi said stood ready to help the as a close friend and neighbour.

"For Maldives' social and economic development we are providing a financial assistance of $1.4 billion in the form of budgetary support, currency swap agreements and concessional lines of credit," he said during a with

Both India and China have been trying to build regional influence in the and other countries such as that lie along vital shipping lanes.

Soon after he took over last month, said state coffers had been looted over the past few years and warned that the country was in financial difficulty after racking up debt with Chinese lenders.

said the Maldives and India had signed agreements to cooperate on trade, health and defence. India would help improve Maldives' security through joint patrols as well as aerial surveillance, officials said.

India's big worry has been that China's expansive diplomacy in the region was aimed at securing an outpost on an island in the Maldives.

Modi said he had discussed regional security with Solih and both had agreed not to allow each other's territory to be used against the other.

 

First Published: Mon, December 17 2018. 15:43 IST
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