India, Maldives rebalance ties

The India-Maldives bilateral relationship, which suffered greatly during the previous regime of Abdulla Yameen, is again looking up with the coming to power of Ibrahim Mohamed Solih, who had contested the recent election as the joint opposition candidate. President Solih recently came to India on a three-day visit. Through this visit, Solih wanted to give the message that India and Maldives are close neighbours and partners and what happened during Yameen’s time was just an aberration.

This was the first foreign visit of the Maldivian president after assuming power. After taking charge, Solih realised that the state coffers are empty due to massive corruption and embezzlement that took place during Yameen’s rule. To make matters worse, Yameen took massive loans from China, which is difficult for the Maldivian government to repay. Maldives is facing a serious financial crisis and a key objective of his visit was to seek help from India so that the new government stabilises.

Yameen allowed the Chinese to undertake a number of infrastructure projects at inflated costs. The Chinese have been engaged in building a mile-long bridge that links capital Male with its airport, which is located on another island, Hulhule. Besides, the Chinese are also engaged in expansion of this airport and building a housing project on the reclaimed island of Hulumale. This has left Maldives in huge debt.

China in recent times has been consciously following this policy, especially under its Belt and Road Initiative (BRI), whereby it creates grand infrastructure projects whose cost the recipient countries often find difficult to repay. This has made Sri Lanka surrender its port in Hambantota in a debt-for-equity swap. Maldives is also one of the debt-stressed countries under BRI. Male fears
that the Chinese would now infringe on its sovereignty, too, using debt as a pressure tool.

The new government of the Maldives is trying to wriggle out of this situation. It is seeking financial help from India so that it can manage its crisis better. India has tried to help Maldives as much as possible. It has given Male a package of $1.4 billion, out of which $200 million is grant for budgetary support. The rest of the money is concessionary loan.

During Yameen’s rule, the India-Maldives bilateral relationship had nosedived. Yameen had become a puppet in the hands of the Chinese. He was pursuing policies at the behest of the Chinese, mortgaging the future of Maldivians. According to one estimate, every Maldivian owes about $8,000 to China. Yameen justified the inflated costs of these projects saying that they were being completed in a very short time. The joint opposition at that time, however, believed that these projects were undertaken for political purposes.

Yameen, on the other hand, tried to delay Indian projects. He actually cancelled the projects of expansion of the main Male airport, which had been given to the Indian infrastructure company GMR, and awarded the same contract to a Chinese company.

Maldives had to face a big financial loss due to this decision as the international court ruled in favour of GMR and the country had to pay the company for its losses. A number of other Indian initiatives, such as a training academy for Maldives defence personnel and creation of a special economic zone, have suffered because of the hurdles created by the Yameen government.

Yameen had also tried to harm the bilateral relationship in defence and security. The installation of coastal radars is still incomplete as the previous Maldivian government did not provide visas to Indian technicians. Worse, Yameen asked India to take back helicopters that it had provided the island nation. There was confusion on the issue of Dornier aircraft, too. Yameen probably wanted to take a loan from Pakistan and buy the aircraft from them, whereas India was providing them as a gift.

Though defence cooperation was not a priority during Solih’s visit, his government has agreed to follow an ‘India first’ policy. Maldives has also reiterated its support for India’s candidature for permanent membership of an expanded and reformed UN Security Council. It will also support India’s candidature for a non-permanent seat for 2020-21.

India and Maldives have tried to mend their ties during the recent visit of President Solih, but it would be hasty to conclude that Chinese influence would start waning immediately. The Solih government has already stated that China remains a friend, and one that has brought the Maldives economic benefit. It is possible that once Solih government stabilises, it might once again start leveraging both India and China against one another to get the best deal for itself.

A number of countries like the UK and Japan have opened their embassies in Male realising the geostrategic importance of the Maldives. The interest of so many external players in the Maldives will ensure that India would have to spend considerable time, energy and resources to maintain its sphere of influence.

(The writer is Associate Fellow, Institute for Defence Studies & Analyses (IDSA), New Delhi)