Avoid turbulence

The Maldivian government’s cancellation of a contract with GMR Infrastructure for developing Male Airport has put India-Maldives relations in a tailspin.

An angry Indian government has frozen aid to the archipelago. However, there are few signs that the Maldivian government will back down under pressure.

Defying a Singapore court order staying the cancellation of the contract, it ordered the state-owned Male Airport Company Ltd. to take over the running of the airport. There have been allegations that money changed hands to seal the deal, which was signed in 2010 when Mohammed Nasheed was Maldives’ president.  

 There is reason for India to be concerned over developments in Maldives. The decision to cancel the GMR contract appears to be a political one aimed at casting aspersions on the previous government. Importantly, it is a response of president Waheed to growing clout of religious extremists and anti-India parties within the ruling coalition. There are sections too that are keen on deeper business ties with China.

There is some concern in India that Waheed succumbed to the combined pressure from these vested interests. India’s annoyance with the Maldivian government is understandable. After all, it had rushed in to express support to Waheed’s government following the controversial resignation of Nasheed. A month ago Waheed’s spokesman described India’s envoy to the archipelago as a ‘traitor’ and an ‘enemy of Maldives.’ If that did not wake India up from its slumber, the GMR controversy should. It should prompt Delhi to rue that hasty decision to endorse Waheed.

While India’s concern over the arbitrary cancellation of a multi-million dollar contract is understandable – the GMR deal was one that India has been touting as a flagship of its successful investment abroad, GMR’s dealings in India have been under a cloud and one wonders whether the government should be staking its relationship with a neighbouring country and going out on a limb to defend the business of a private company with a spotty reputation.

Indeed, external affairs minister Salman Khurshid’s outburst at the cancellation of GMR’s contract is out of proportion and needlessly jeopardises the country’s larger interest. The company can fight its own case and the Indian government must resist the temptation to engage in ‘Big Brother’ behaviour.  Muscle-flexing will only push Male into the waiting arms of other powers.