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Maldives is going to fall into economic crisis, IMF warns

Abdur Rahman Khan

The economy of the Maldives is almost entirely dependent on tourism.

The International Monetary Fund (IMF) has warned that if the Maldives does not change its policies, the smallest country in South Asia will soon face a major crisis in repaying its foreign debt. The world’s second largest lender gave this message in a statement on Wednesday.

The message from the IMF comes amid India’s recent spat with Maldivian President Mohammad Muijju and his government and growing rapprochement with China.

“If the Maldives does not make significant and meaningful changes in its policies, the country’s fiscal deficit and external debt will continue to increase and the Maldives will be at high risk of default,” the IMF said in a statement on Wednesday.

Maldives consists of 190 islands in the Indian Ocean. 189 of these islands are inhabited. The total population of the country is 5 lakh 29 thousand 667 people.

The economy of the Maldives is almost entirely dependent on tourism. Maldives is a very popular destination especially for Indian tourists and the country has been able to cope with the severe economic impact of the Corona epidemic due to the welfare of this tourism sector.

Mohamed Muijju, known as the “pro-Beijing” politician of Maldives, was elected as the country’s president on September 30.

Prime Minister Narendra Modi visited India’s southernmost Lakshadweep in January. He went there and posted some pictures on social media. Although the Indian Prime Minister did not mention Maldives by name in his post, many assumed that he was encouraging Indian citizens to vacation in Lakshadweep instead of Maldives.

Three Maldivian Deputy Ministers responded to this post. They called Modi a ‘hypocrisy’, ‘terrorist’ and ‘puppet of Israel’.

Since then, Maldives and India have been involved in an unprecedented conflict. The Maldivian government, however, has said that this is the opinion of the ministers concerned. It has no connection with the Government of Maldives.

The government suspended three deputy ministers. Their posts have also been deleted. Nevertheless, Indians reacted strongly to this incident. Many called for the boycott of Maldives with screenshots of these comments by the ministers. The hashtag ‘Boycott Maldives’ gained popularity through X.

Since then, the tourism business of Maldives has collapsed. Many of the Indian tourists have started visiting various tourist destinations in the interior of the country instead of Maldives.

The main point of the IMF is that if the Maldives does not strengthen its tourism sector soon, the country will have trouble repaying its foreign debt installments.

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