Minister of Tourism Ibrahim Faisal has stated the urgency of issuing debt relief measures to prevent financial deterioration economies face, especially those among the Small Island Developing States (SIDS). The remarks were made by the minister during the United Nations High-level Thematic Debate on Debt Sustainability and Socio-Economic Equality for All.
During the address, Minister Faisal highlighted the extreme vulnerabilities SIDS face due to external shocks faced by the economies. The minster observed the lack of international financial assistance to address such issues. He further revealed that several SIDS including the Maldives incur high debt levels when borrowing from external sources, further deteriorating the financial situation of the economy. The increased cost of borrowing limits the capability of the country to invest in developmental projects required for economic growth, while negatively impacting the economic sustainability in the long run.
Stressing the significance of high levels of investments to achieve economic growth, Minister Faisal proclaimed that the biggest challenge most SIDS face in this stance is obtaining the necessary finance required for investment. The minister emphasised the importance of the provision of concessional finances and measures allowing to borrow at low-interest rates. However, he unveiled the challenges faced to attain the required financial assistance, which in turn hinders the developmental progress of the nation. On this stance, he revealed that the high-cost external debts incurred are not sustainable, especially during global recessions or external shocks. Moreover, the minister underscored that the elevated debt service payments impede the government's ability to allocate funds for developmental initiatives and projects.
Aiming to address the financial obstructions faced, Maldives advocates for debt relief initiatives with an overarching goal of assisting countries experiencing severe financial debt distress. The Maldives also calls for international efforts to establish policies which provides relief measures to prevent their financial crisis from escalating.