Former President Mohamed Nasheed has cautioned that the Maldives is currently heavily caught in a debt trap, and that the government alone is unable to address the nation’s escalating financial crisis.

In a Sunday post on X, Nasheed stated that the nation's debt issue has transformed into a significant problem. He claimed that the government is simply utilizing borrowed money to pay off earlier debts, frequently at elevated interest rates, instead of tackling the fundamental issues of the crisis. “Esto demuestra que el país está claramente atrapado en una trampa de deuda,” escribió en Dhivehi.

Nasheed mentioned that the Maldives has total debt obligations of USD 1.1 billion this year, which includes a payment of USD 500 million due in April, amounting to more than MVR 15 billion. The government is seeking to generate revenue through sukuk and bond offerings, including a MVR 2.4 billion bond through the Pension Office to settle debts to private enterprises.

The bond deal has sparked a series of resignations at the Pension Office. Chairman Dr. Ahmed Inaaz stepped down on Sunday, following the prior resignations of Saruvash Adam in October and Chief Financial Officer Hawwa Fajuwa on November 9.

Nasheed has earlier voiced worries regarding the nation’s capability to draw in investors. In September, he cautioned about a possible default due to decreasing investor confidence. He has continuously condemned China's involvement in the Maldives' foreign debt, alleging that it has ensnared the nation in unmanageable loans.

International credit rating agencies continue to assign a ‘junk’ rating to the Maldives, complicating the process of obtaining foreign financing. Opposition leaders have raised doubts about the government's ability to refinance its debts, particularly in light of news that Cargills might pursue a USD 300 million loan at a 15 percent interest rate.