India opens $140 million line of credit for Maldives

India's line of credit will help Maldives come out of a tight fiscal situation, reports Prasanna D Zore from Male

India and Maldives on Saturday signed four agreements in the Maldivian capital of Male during a bilateral meeting between Prime Minister Manmhan Singh and President of Maldives Mohammed Nasheed.

These agreements deal with promotion of trade and investment, combating terrorism, an MOU on the renovation of the Indira Gandhi Memorial Hospital, extension of a $ 100 million line of credit to Maldives to help stabilse its fiscal position, another line of credit of $ 40 million dollars to ease the shortage of housing in the country, setting up of a National Police Academy, enhancing ferry services and port development.

"The government of India has agreed to extend a $100 million Standby Credit Facility to the government of Maldives to help stabilise its fiscal position.  We have agreed to examine a comprehensive package to help develop the Maldivian economy, including in the areas of banking and financial infrastructure and capacity building," said the PM.

Ahmed Nihan, a MP from the opposition PPM party and Eva Abdullah, MP and sister of President Nasheed, both agreed that the extension of the two lines of credit will go a long way in building bridges between the two countries and helping the economic development of Maldives.

"I congratulate Indian Prime Minister Dr Manmohan Singh for increasing bilateral aid," Abdullah told rediff.com after Dr Singh's address to the People's Majlis.

Nihan, though from the opposition, also welcomed India's "generous assistance" that will help Maldives come out of a tight fiscal situation and help build housing capacity.

Talking about combating terrorism and setting up a National Police Academy by India, Nihan said if implemented quickly, these steps will help Maldives face stiff challenges in the security arena.

"We too are seeing some terror-related activities in Maldives. Though an Islamic country, we don't believe in religious fundamentalism," he said, adding, "The sooner the NPA becomes a reality, the better for Maldives."