India on Sunday provided a soft loan of $ 250 million to the government of Maldives 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 Maldives Foreign Minister Abdulla Shahid, who said it would help close the income gap and meet his government’s immediate needs. The Covid-19 pandemic has had a massive impact on the tourism industry, the backbone 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 handed over at a ceremony at the Maldives’ foreign ministry in the presence of Shahid, the minister of Finance Ibrahim Ameer, Indian envoy Sunjay Sudhir and senior government official. Bharat Mishra, Bank of India official.
Shahid, who spoke in Hindi at the event, said: “The whole world has faced an unprecedented challenge, an invisible enemy, a threat we cannot ignore, a virus that has stopped operations airlines of the world and forced all countries to make tough decisions. It is a pandemic that has forced us to close our borders and our homes.
“But our friends, as always, have proven that this pandemic cannot get them to close the doors of their hearts. Even in these difficult times, India has been our great friend.
Shahid also tweeted: “I am grateful to receive financial assistance of $ 250 million from India to the Maldives today. Financial assistance provided through the underwriting of GoM National Treasury Bonds by SBI will support the financing of the income gap and meet the government’s immediate financing needs.
The Indian side said 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 over 10 years, said a statement from the Indian mission in Male.
The loan is “extended without conditions” and the Maldives are “free to use the money to redress the national economic situation in accordance with their own priorities,” the statement said. The aid is “channeled through SBI, Male so that it is not reflected in the Maldives’ external borrowing” and the Indian government has provided a sovereign guarantee to SBI for the loan.
“Since the principal payment is only due after 10 years, there will be no immediate debt service liability other than the semi-annual interest payment. The Maldives is the only country to which India has provided such assistance, ”the statement said.
At the meeting of the two foreign ministers on August 13, India also unveiled a $ 500 million package to help the Maldives build a connectivity project linking its capital Malé to three islands.
As part of the measures to fight Covid-19, India will send doctors and nurses recruited on fixed-term contracts to strengthen the Maldives health system. In recent weeks, a total of 500 Maldivian patients have traveled to India in eight batches for treatment.
A team of Indian doctors and specialists traveled to the Maldives in March to help prepare for Covid-19 and two shipments of 11.7 tonnes of medicine were provided in April and May. India also lifted export restrictions on medical supplies, breathing apparatus, test kits and reagents and maintained the Maldives’ supply of essentials.