President Mohamed Muizzu has thanked India and China for helping strengthen the Maldives’ fragile economy, highlighting the importance of the two countries in addressing the Island nation’s looming debt crisis and its future development.

China and India provide the most assistance in repaying the country’s debt, President Muizzu said on July 26 at an official function held to mark the 59th anniversary of the country’s independence.

“I thank the Chinese government and the Indian government on behalf of the Maldivian people for their cooperation with this effort to strengthen the economy, to assure our economic sovereignty, for the sake of the Maldivian people,” Mr. Muizzu was quoted as saying by Maldivian news portal adhadhu.com.

Mr. Muizzu came to power last year on an anti-India campaign plank seeking the removal of around 80 Indian military personnel operating helicopters and Dornier aircraft donated by India.

China for its part has scaled up its relations with Maldives, since Mr. Muzzu, widely regarded as a pro-Beijing leader, took over power.

Early this year, he visited China during which the two countries elevated their ties to a comprehensive strategic cooperative partnership and signed 20 agreements followed by a military assistance pact with Beijing much to the disquiet of India as Maldives is its closest neighbour located strategically in the Indian Ocean.

He also permitted Chinese research vessels also regarded as “spy ships” to berth in Maldives waters after Sri Lanka banned them for a year.

However, after clinching an agreement with India to replace the military personnel flying the helicopters used to evacuate the patients from a host of islands in the archipelagic nation, Mr. Muizzu warmed up to India and attended Prime Minister Narendra Modi’s swearing ceremony.

He also praised ₹400 crore assistance by India and sought to restructure debt owed to India by Maldives.

The marked change in his policy towards India came as in May this year the International Monetary Fund (IMF) warned the Maldives that it faces a high risk of debt distress without significant policy changes.

The IMF noted that the Maldives’ current account deficit is expected to remain large and that its overall fiscal deficits and public debt are projected to stay elevated.

Following this, the Muizzu government sought the restructuring of loans from China. Maldives debt to China reportedly amounted to over $1.3 billion about which Beijing initially expressed reservations to restructure the debt.

Mr. Muizzu said in his July 26 meeting that China has given the green light on deferring loan repayments for five years which will be a big relief to avert Maldives falling into a similar situation faced by Sri Lanka leading to debt default.

At the height of the Sri Lankan crisis, China declined to restructure loans taken by Colombo. India stepped in to bailout Sri Lanka from the crisis with about $4 billion in assistance.

A large portion of the loans taken by the Maldives from China’s Exim Bank for development projects during former President Mr. Yameen’s government must be repaid in 2026, according to adhadhu.com report.

The Maldives will face a serious fiscal crisis if the loans are not restructured.

Technical work on restructuring the loans taken from China’s Exim Bank is ongoing, which was how President Muizzu believed that “foreign policy should be shaped to protect the country’s independence,” the report said.

Mr. Muizzu also said the implementation of a free trade agreement (FTA) signed between the Maldives and China during Mr. Yameen’s government will begin in September and expressed hope to sign a similar agreement with India as well.

Efforts are also underway to enter into FTAs with Turkiye and Britain.

The result of implementing the FTA with China would be the elimination of tariffs for a total of 7,897 items in nine sectors, including 298 fisheries products, Mr. Muizzu said.

He also said his government is working on currency swap agreements with China and India to help local businesses.

This would pave the way for alleviating the dollar shortage and assuring economic sovereignty, he said.

For its part, China continues to ramp up its aid to Maldives by strengthening its collaboration in key infrastructure and renewable energy projects that are vital for the sustainable development of the Maldives.

Maldives Foreign Minister Moosa Zameer who was in Beijing early this week held talks with his Chinese counterpart Wang Yi and other officials.

During his visit, the two countries signed a Letter of Exchange on the feasibility study for the redevelopment of Male and Villimal Roads Project, a key pledge of Mr. Muizzu’s government.

The discussions focused on strengthening collaboration in key infrastructure projects that are vital for the sustainable development of the Maldives, the Maldivian Foreign Ministry said in a press release on July 23.

Male:

China has gifted 1,500 tonnes of water from the Tibetan glaciers to Maldives, the second such donation in less than two months, a media report said on Friday.

This is the latest in the multiple grants and aid that China has promised the Maldives, especially since pro-China Mohamed Muizzu took over as the President in November 2023.

Not just that, Maldives and China are also collaborating to enhance weather monitoring systems in this small island nation that bears the brunt of changing climate, including challenges such as sea level rise.

According to a report in the news portal Sun.mv, China’s Xizang Autonomous Region gifted 1,500 tonnes of mineral water to the Maldives government on Thursday. The Ministry of Foreign Affairs said that the donated water will be distributed to island communities, for use during times of drinking shortage.

Earlier on March 27, the Maldives government had announced that it had received a similar consignment of 1,500 tonnes of water from China.

Foreign Minister Moosa Zameer, while speaking at a ceremony where Wang Lixin, the Chinese Ambassador to the Maldives, handed over the donation, said that China continues to remain a “good friend to the Maldives,” especially during the challenging times and crisis.

The minister also expressed his gratitude to the people of Xinjiang Autonomous Region for the kind gesture and to the government and the people of China for their continued support and goodwill.

“Grateful to receive 1,500 tonnes of mineral water from the people of Xizang Autonomous Region, PRC. This generous donation will greatly support our island communities during water shortages. Thank you for your support and friendship,” Zameer said on his official X handle late on Friday and tagged Wang while posting photos from the ceremony.

The Maldives has 26 atolls and its 1,192 islands are mostly composed of coral reefs and sandbars, a combination that makes groundwater and freshwater extremely scarce, and the problems are exacerbated due to climate change.

The country has tried between 2011 and 2015, a UN-funded ‘Increasing Climate Resilience through an Integrated Water Resources Management Programme’ but with limited success.

In December 2014, India carried out ‘Operation Neer’ during one of its worst water crises following a massive fire in the Male Water and Sewerage Company complex on December 4, 2014.

While announcing the earlier consignment in March, the government had said that the decision to provide Maldives with drinking water was reached during the official visit in November 2023 of China’s Tibet Autonomous Region’s Chairman, Yan Jinhai to the Maldives, when he met President Muizzu.

At that time, it was deliberated to donate water that is produced out of frozen water procured from glacial regions which are highly clean, clear, and rich in minerals. Moreover, Tibet (Xizang in Chinese) Autonomous Region is known to produce high-cost premium brands of water, the Maldives Foreign Ministry said then.

Previously, China had been exclusively known for its assistance in the urban and economic development of the Maldives. But since Muizzu assumed office, China has been helping the country with the supply of defence equipment too.

Meanwhile, a report in state-run PSM News Service said that efforts are ongoing to establish lightning detection and thunderstorm tracking systems in the Maldives with the assistance of the Chinese administration.

Speaking at a conference, Minister of Climate Change, Environment, and Energy Thoriq Ibrahim emphasised the reinforcement of these efforts through collaboration with China’s civil aviation administration.

The minister also highlighted discussions with China’s First Institute of Oceanography that are aimed at strengthening marine observation and forecasting capabilities in the Maldives, the report said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)