India extends financial support to the Maldives and invests in big projects

By: |
August 13, 2020 5:10 PM

In fact, New Delhi had indicated last month that it will be announcing a `substantial financial assistance package’ for neighbouring Maldives to help its economy post COVID-19 recovery.

India has decided to create an air travel bubble with Maldives which will help the island nation to revive its tourism industry and boost its economy. India has decided to create an air travel bubble with Maldives which will help the island nation to revive its tourism industry and boost its economy. (Representative image)

To extend a helping and supporting hand, India has announced USD 250 million support to the Maldives. This amount which is through a soft loan arrangement was announced on Thursday (Aug 13, 2020) by the External Affairs Minister Dr S Jaishankar. Highly placed sources told Financial Express Online that, “This assistance from India will give the Maldives much-needed budgetary support to mitigate the impact of the economic crisis caused by global COVID-19 pandemic. It will also help in shoring up liquidity, and help ease exchange rate fluctuations.”

In fact, New Delhi had indicated last month that it will be announcing a `substantial financial assistance package’ for neighbouring Maldives to help its economy post COVID-19 recovery.

Assistance of USD 400 million has been extended through the Currency swap arrangement, and this will help the Maldives located in the Indian Ocean to tide over liquidity crisis.

Financial Express Online had also reported that India had provided around 6.2 tonnes of essential medicines under `Operation Sanjeevani’ and also 600 tons of essential food items amidst the COVID pandemic.

A message on the Maldivian Independence Day (July 26), from the Indian High Commission, said, “Maldives `India first policy’ combined with `Neighbourhood first policy of India’, has set the foundation of the growing relationship.” Adding, “This is an all-weather friendship which is steeped in history and with a glorious future.”

According to sources, in the last one and half years the bilateral relations between the two countries have witnessed a remarkable change as President Solih and his government has acted on its ‘India First’ policy in right earnest.

As has been reported earlier, India’s total financial commitment in the Maldives covering all loan and grant projects are well over US$ 2 billion, and all this was announced soon after President Solih had come into power in November 2018.

Creation of an air travel bubble with the Maldives:

India has decided to create an air travel bubble with Maldives which will help the island nation to revive its tourism industry and boost its economy. The Maldives has opened up its border for the international travellers from July 15 and with the tourist traffic coming in, it will be able to stabilize its economy.

Also, it has been decided to help the Indians who had left the Maldives due to COVID-19, to return to their jobs in that country.

Greater Male Connectivity Project (GMCP)

In one of the high visibility infrastructure projects, the President of Maldives had sought India’s and the approvals for the project were obtained in less than a year.

More about the GMCP

This project involves the construction of 6.732 km of bridge and causeway links. These will be between the islands of Villingili, Gulhifahu and Thilafushi with Male. According to sources, the bridge-section will be 2.08 km, 780 m causeway section and 3.87 Km embankment and causeway section.

Update

So far, the 1.39 km Maldives-China Friendship bridge (connecting Malé with Hulhule and Hulhumale to its east) is the most visible infra-project in the Maldives. However, once the GMCP is ready, the other projects will be rendered insignificant in comparison. Also, besides projecting India’s overarching presence in the Maldives through a high-visibility project in the Greater Malé region. And showcasing India’s expertise in implementing a complex infrastructural project of this scale.

It will also be a complement to the Gulhifalhu commercial port project, which is being constructed under an Indian LoC of USD 800 million.

Ferry Service between India and Maldives:

Soon there will be a cargo ferry service between India and Maldives, which will help in enhancing the trade ties between the two sides. And with a direct cargo ferry service present, India will be replacing other countries and become one of the top trade partners of the island nation.

On the anvil are several projects which will start soon and the direct cargo ferry service will help.

Presently, under the USD 800 million Line of Credit (LOC), in Maldives there are seven big projects which are being implemented by India. These projects include: water supply and sewerage systems on 34 Islands; Cancer hospital in Hulhumale; Addu Development Project-Road Development and Reclamation; Expansion of Maldives Industrial Fisheries Companies (MIFCO) Facilities; Gulhifalhu Port Project; Hanimadhoo International Airport Redevelopment and the Construction of International cricket stadium in Hulhumale.

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