President Mohamed Muizzu has thanked India and China for helping strengthen the Maldives’ fragile economy, highlighting the importance of the two countries in addressing the Island nation’s looming debt crisis and its future development.

China and India provide the most assistance in repaying the country’s debt, President Muizzu said on Friday at an official event to mark the 59th anniversary of the country’s independence.

“I thank the Chinese government and the Indian government on behalf of the Maldivian people for their cooperation with this effort to strengthen the economy, to assure our economic sovereignty, for the sake of the Maldivian people,” Muizzu was quoted as saying by Maldivian news portal adhadhu.com.

Muizzu came to power last year on an anti-India campaign plank seeking the removal of around 80 Indian military personnel operating helicopters and Dornier aircraft donated by India.

China has scaled up its relations with the Maldives since Muzzu, widely regarded as a pro-Beijing leader, took over power.

Early this year, he visited China during which the two countries elevated their ties to a comprehensive strategic cooperative partnership and signed 20 agreements followed by a military assistance pact with Beijing much to the disquiet of India as the Maldives is its closest neighbour located strategically in the Indian Ocean.

He also permitted Chinese research vessels regarded as “spy ships” to berth in the Maldives waters after Sri Lanka banned them for a year.

However, after clinching an agreement with India to replace the military personnel flying the helicopters used to evacuate the patients from a host of islands in the archipelagic nation, Muizzu warmed up to India and attended Prime Minister Narendra Modi’s swearing-in ceremony.

He also praised ₹400 crore assistance by India and sought to restructure debt owed to India by the Maldives.

The marked change in his policy towards India came as in May this year the International Monetary Fund (IMF) warned the Maldives that it faces a high risk of debt distress without significant policy changes.

The IMF noted that the Maldives’ current account deficit is expected to remain large and that its overall fiscal deficits and public debt are projected to stay elevated. Following this, the Muizzu government sought the restructuring of loans from China. The Maldives debt to China reportedly amounted to over 1.3 billion US dollars about which Beijing initially expressed reservations to restructure the debt.

Muizzu said in his Friday meeting that China had given the green light on deferring loan repayments for five years which would be a big relief to avert the Maldives falling into a similar situation faced by Sri Lanka leading to debt default.