China’s EXIM Bank orders Male to pay $10 million from a loan issued to MP Siyam, if the government fails or refuses to pay the debt, it would devalue the national currency
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New Delhi: A day after Male expressed its gratitude celebrating its 55th independence day, towards Beijing praising its socio-economic investment, China reciprocated by serving the Maldives a notice to pay back a part of its loan.
According to reports, China’s EXIM Bank has ordered the Maldivian government to pay back $10 million from a loan issued to the parliament representative for Dhaalu Atoll’s Meedhoo constituency Ahmed Siyam granted via a sovereign guarantee provided by the previous administration. If the government fails or refuses to pay the debt, it would result in sovereign default, causing a devaluation of the Maldivian currency, and affecting Male’s international trade, as well as affect the country’s global ranking.
Local media reports indicated that China in 2017 had issued a $127 million loan to the Sun Siyam Resorts Pvt Ltd, owned by the Meedhoo MP, which was the largest loan undertaken with a sovereign guarantee by the state. While the date for when Siyam’s loan payments were due to continue to be unclear, however, estimates indicate the $10 million he had failed to settle would likely default to the Maldivian government. Reports also added that the Chinese financial institution had ordered the government under President Ibrahim Solih to repay the remainder of the loan by 6 August 6.
Sources claimed that the former government under the then President Abdulla Yameen had granted the sovereign guarantee to Siyam after he placed approximately $20 million with the Maldivian Finance Ministry, as a payment guarantee, in addition to having mortgaged his resorts to acquire the loan.
Regional media reports highlighted that MP Shiyam is currently involved with developing one of the largest resorts in the Maldives, located at Dhigurah, Noonu Atoll. The project is funded by the aforementioned Chinese bank’s loan.
