India Saves Maldives with 50 Million Dollar Budget Aid | Why is India Doing This?
StudyIQ IAS・2 minutes read
India provided $50 million in budgetary aid to Maldives, extending the repayment period by a year, strengthening their relationship, despite Maldives' rising debt concerns and anti-India sentiments among some political figures impacting financial stability.
Insights
- India's aid to Maldives, including interest-free treasury bills and budgetary assistance, showcases a strong bilateral relationship, with the recent $50 million aid being a testament to the enduring friendship between the two nations.
- The warning from the International Monetary Fund regarding Maldives' escalating debt, coupled with anti-India sentiments fueled by political figures like Mohammad Mazoo, not only impacts the country's financial stability but also deters Indian tourists and potential investors, posing significant challenges for Maldives' economy and diplomatic ties.
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Recent questions
What aid did India provide to Maldives?
$50 million in interest-free US treasury bills.
How much debt is Maldives projected to have by 2024?
$8.7 billion, exceeding the country's GDP.
Who praised India's aid to Maldives?
Maldives' Foreign Minister Musa Zameer.
How much does Maldives pay annually in interest?
$400 million, mostly to China.
What negative impact has anti-India sentiment had on Maldives?
Decline in Indian tourists and deterred potential investors.
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Summary
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India's $50 Million Aid Strengthens Ties
- Maldives thanked India for a budgetary aid of $50 million, which translates to over 440 crore rupees in Indian currency.
- India provided interest-free US treasury bills worth $50 million to Maldives, extending the repayment period by a year.
- The gesture was praised by Maldives' Foreign Minister Musa Zameer, highlighting the strong friendship between the two nations.
- India had previously announced a $1.4 billion aid package for Maldives in 2018.
- The International Monetary Fund warned Maldives about its increasing debt, which is projected to reach $8.7 billion by 2024, exceeding the country's GDP.
- Maldives currently pays $400 million annually in interest, mostly to China, impacting its financial stability and future prospects.
- Maldives' anti-India sentiments, influenced by political figures like Mohammad Mazoo, have led to a decline in Indian tourists visiting the country and potential investors being deterred due to negative statements about India.
