Nasheed says debt repayments unaffordable ‘even if we sell our grandmother’s jewelry’

Parliament Speaker, former President Mohamed Nasheed. (Photo/People's Majlis)

Parliament Speaker, former President Mohamed Nasheed said on Wednesday that Maldives will not be able to afford the debt repayments due for the upcoming year, “even if we sell our grandmother’s jewelry”.

In a tweet regarding the proposed state budget for 2021 on Wednesday morning, Nasheed said that the debt repayments due for the year will amount to 53 percent of the projected state revenue.

He said that over 80 percent of the debt repayments will go to China.

“Totally unaffordable. Even if we sell our grandmother’s jewelry, we won’t be able to afford these repayments,” he said.

He accompanied the statement with a picture of a fattaru bai, a traditional necklace.

The government has submitted a budget of MVR 34.79 billion to the Parliament for approval. The projected expenditure totals MVR 33.29 billion while the projected revenue totals MVR 17.79 billion, meaning an overall budget deficit of MVR 15.50 billion.

While Nasheed has stated that debt repayments in 2021 will amount to over half of the total projected state revenue, the projected debt repayment on the budget is MVR 4 billion, which amounts to 23 percent of the projected revenue.

While the government projects Maldives’ debt to rise to MVR 82.8 billion by the end of 2021, Nasheed, in a press conference on Tuesday, shifted the blame for the increase in debt to the administration of former Maldivian President Abdulla Yameen Abdul Gayoom.

Finance Minister Ibrahim Ameer stated that the government will not opt for fiscal consolidation but will increase expenditure to recover from the impact of the COVID-19 pandemic on the economy, even if it requires taking on more debt.