President seeking US$300 million credit facility from Saudi Arabia for “budget support”

The government has confirmed it is in discussion with Saudi Arabia, seeking a long-term, low interest credit facility of US$300 million to help overcome “fiscal problems”.

President’s Office Spokesperson Masood Imad confirmed President Waheed had held discussions with senior Saudi Arabian dignitaries including Crown Prince Salman bin Abdulaziz Al Saud over the proposed credit facility, during his recent visit to the country.

“The president has initiated the talks so it is just a matter of working out the details now,” Masood said, explaining that the funds would be used for “budget support” and development projects.

The opposition Maldivian Democratic Party (MDP) has meanwhile said the government would still be required to secure parliamentary approval for the funding.

MDP MP and Spokesperson Hamid Abdul Ghafoor said that the heavily partisan parliament now effectively controlled state finances as a result of former opposition politicians – now part of President Waheed’s government – imposing tighter spending restrictions on former President Mohamed Nasheed’s administration.

Ghafoor argued that with the MDP failing to recognise the legitimacy of the present government due to the controversial transfer of power last February, he did not believe there would be support for approving the credit agreement with Saudi Arabia due to the government’s existing extravagant borrowing levels.

The party accused the current government of reckless financial management, pointing to a potential US$1.4 billion compensation bill facing the state for deciding last year to abruptly terminate a US$511 million airport development contract agreed with infrastructure group GMR.

The compensation claim amounts to four times that of the Maldives’ current state reserves should it be awarded by a Singapore court overhearing arbitration hearings between GMR and the government.

“Since we do net see this government as legitimate, we do not see why we should support them,” he said. “They have put us into debt with their handling of the airport development and another bill for a border control system.”

Earlier this month, Malaysian security firm Nexbis invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control system technology in the country, in line with a concession agreement signed in 2010.

Immigration Controller Dr Mohamed Ali confirmed at the time that Nexbis had submitted a bill seeking charges for the period its system has been in use, as work continues on replacing the Malaysian company’s border controls with new technology provided by the US government.

Development delays

In April this year, Finance Minister Abdulla Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

Jihad warned that government offices and independent institutions might be unable to pay salaries or electricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).

Earlier the same month, Jihad also announced that the government had decided to delay all new development projects that were to be financed out of the state budget due to shortfalls in revenue.

The decision to suspend new projects was revealed after Housing Minister Dr Mohamed Muiz told local media at the time that he had been instructed not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

Both Finance Minister Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls from Minivan News at time of press.


6 thoughts on “President seeking US$300 million credit facility from Saudi Arabia for “budget support””

  1. The chances of even $1 of this $300 million dollar "facility" landing in the hands of the regime is as big as Waheed winning the election in the 1st round. And that probability, ladies n gentleman is 0.0.

    I bet the Saudis Sheikhs are just shaking (pardon the pun) their heads in disbelief at the stupidity of this guy. They were too polite to tell him to piss off. This whole thing is tantamount to asking for a blank cheque for a whopping $300 million dollars to spend as Mr Waheed pleased, aka "budget support".

    There is no country in the world, that'll agree to such a stupid scheme. Anyway, here's a better idea for Waheed, and I offer my advice free of charge. Whilst on your door-to-door round to gather signatures, ask every Maldivian and expatriate living here to donate US$750.0 for "budget support".

    There are around 400,000 people stranded on these islands, and that should get his US$300 million. There's more chance of that succeeding than the Saudi Arabians handing him over ANY dollars.

  2. Interest? As in usury? Sub Haana Allah! How can Saudi Barbaria ask for interest and how can Dhivehistan accept that? Because rules don't apply when you're the rule-makers. LOL.

  3. So pleased to know the bankrupt Maldivians are now trying to con the Saudis into handing over large sums of money they cannot possibly repay without selling their mothers in the casbah!!
    At least the cow worshipping kuffars of India are not being screwed.....for the time being at least.
    Krishna be praised!!
    I wonder how much the Saudis will offer for Kuribee?

  4. I think it's important that a law be passed outlining a period that an out going government can take credit facilities and start new projects that is costly. In my opinion this will limit starting projects that are not financed but depending on the daily income we get also limit propaganda projects for the sake of getting votes.

  5. Saudi , China and US will support Maldives.

    Nasheed took short term loan from India at very hight interest rates ? India took advantage of the situation charge huge interest on the short term loan.

    India had tried to bully Maldivian by showing thier muscles too.

    You will see that this 300 million dollars are given within next one month .

  6. Kuribee, I can see you selling your mother in the casbah very soon.
    How can a bankrupt country, with a fragile economy based on tuna fishing and tourism, possibly repay a loan of $300 million? the maths morons.............
    Can't see the US ever supporting you.....wrong religion!!
    Dream on...........


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