India on Sunday provided a soft loan of $ 250 million to the Maldivian government as budget support to mitigate the economic impact of the Covid-19 pandemic, the latest in a series of support measures for the Indian Ocean archipelago.
The aid was welcomed by Maldivian Foreign Minister Abdulla Shahid, who said it would help close the income gap and meet the immediate needs of his government. The Covid-19 pandemic has had a massive impact on the tourism industry, the mainstay of the Maldives economy.
The financial aid, first announced during a virtual meeting between Shahid and his Indian counterpart S Jaishankar on August 13, was presented at a ceremony at the Maldives Ministry of Foreign Affairs attended by Shahid, Finance Minister Ibrahim Ameer , the Indian envoy Sunjay Sudhir and the senior official of the Bank of India Bharat Mishra.
Shahid, who spoke in Hindi at the event, said: “The entire world has faced an unprecedented challenge, an invisible enemy, a threat that we cannot ignore, a virus that has halted the operations of the world’s airlines and has forced all countries to make difficult decisions. It is a pandemic that forced us to close our borders and our homes.
“But our friends, as always, have shown that this pandemic could not get them to close the doors of their hearts. Even in this difficult time, India has been our great friend. ”
Shahid also tweeted: “Thankful to receive the $ 250 million financial aid from India to the Maldives today. The financial assistance provided through the SBI subscription of national government treasury bonds will support the financing of the income gap and meet the immediate financing needs of the government. ”
The Indian side said that the budget support was provided in response to a request from President Ibrahim Solih to Prime Minister Narendra Modi for assistance in overcoming the difficult economic situation. The soft loan has a very low interest rate and can be repaid in 10 years, according to a statement from the Indian mission in Male.
The loan is “granted without conditions” and the Maldives is “free to use the money to repair the internal economic situation in accordance with its own priorities,” according to the statement. The aid “is channeled through SBI, Male so that it is not reflected in foreign loans from the Maldives” and the Indian government has provided a sovereign guarantee to SBI for the loan.
“Since the principal payment is due only at the end of the 10 years, it will not impose any immediate debt service liability other than the semi-annual interest payment. Maldives is the only country to which India has provided such assistance, ”the statement said.
During the meeting of the two foreign ministers on August 13, India also unveiled a $ 500 million package to help Maldives build a connectivity project linking its capital Male with three islands.
As part of the measures to counter Covid-19, India will send contracted doctors and nurses on short-term contracts to strengthen the Maldives health system. Over the past weeks, a total of 500 Maldivian patients traveled to India in eight batches for treatment.
A team of Indian doctors and specialists visited the Maldives in March to help prepare for Covid-19 and two shipments of 11.7 tonnes of drugs were delivered in April and May. India also lifted restrictions on the export of medical supplies, breathing apparatus, test kits and reagents and maintained the supply of basic products to the Maldives.
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