India has approved a budgetary support of $50 million for Maldives despite being on the receiving end of its President Mohammed Muizzu’s anti-India and pro-China rhetoric.
This announcement comes after fruitful discussions between India and Maldives regarding debt relief when Moosa Zameer, Maldives’ Foreign Minister, visited India on an official three-day visit (from 8 to 10 May).
This is the first visit of any high-ranking official of the Muizzu government to India.
Until this new Muizzu-led government, India used to be the first destination of Maldivian presidents. However, Muizzu broke this tradition and visited Turkey, following this up by visiting China, both nations which have an axe to grind with India.
Thanking India for the budgetary support, Moosa said, “I thank EAM @DrSJaishankar and the Government of #India for extending vital budgetary support to Maldives with the rollover of USD 50 million Treasury Bill. This is a true gesture of goodwill which signifies the longstanding friendship between #Maldives and #India.”
In the budgetary support, India rolled over a $50 million treasury bill for another year through the State Bank of India.
This comes as a relief for the Maldivian economy, which according to the International Monetary Fund (IMF), is at risk of debt distress. The IMF just yesterday (13 May) gave a warning to the Muizzu government to slow down its borrowing from its main creditor, China, urging it to cut spending, raise revenue, and reduce external borrowing.
The primary revenue source for Maldives is tourism.
Indians, who were until last year the largest group traveling to Maldives, are seeing a constant decline following the derogatory remarks against Indian Prime Minister Narendra Modi by three ministers of the Muizzu government.
Its Tourism Minister, Ibrahim Faisal, in fact, asked Indian tourists to not shun Maldives and visit it in large numbers, since the decline in Indians visiting Maldives has started to have a financial impact on its tourism industry.
It is estimated that this decline may have led to a revenue loss of approximately Rs 468 crore rupees or $56 million.
Maldives President Muizzu, since his election in the Presidential polls, has increasingly taken an anti-India and pro-China stance. Muizzu himself won the Maldivian Presidential election riding on the back of an ‘India-Out’ campaign.
He asked India to withdraw its personnel from Maldives by May 10, who used to maintain various India-gifted equipment and train Maldivian personnel on how to operate them, did not renew a hydrographic agreement, and allowed Chinese spy vessels to berth in Male.
The last batch of these personnel left Maldives just four days ago and were replaced by civilian operators.