Surpise guests from Maldives in Delhi
Last week, two surprise guests from a neighbour in the Indian Ocean landed in Delhi at very short notice. The Maldives foreign minister, Dr Ahmed Shaheed, and finance minister, Mr Qasim Ibrahim, had come with an urgent request ~ to seek help in fixing Maldives’ first budget deficit in decades.
The tsunami and its aftermath had blown a hole of $100 million in the finances of the tiny island nation. As a consequence, for the first time in decades, Maldives encountered a financial crisis. It had accounted for an average GDP growth of eight per cent for the last two decades, thanks mainly to its booming tourism sector. Not only were government revenues affected by the tsunami, tourist arrivals dropped to less than 50 per cent compared to last year, forcing hotels to give large discounts to woo reluctant tourists.
Before they left on 8 September, India had agreed, in principle, to give Maldives a grant of about $2 million in aid. MEA officials said this was the first time India will be giving an outright grant to Maldives, instead of assistance on project-basis. Half of the assured money to Maldives will be the Indian aid of $1.1 million for post-tsunami reconstruction. That money will be doubled and now sent as a one-time grant.