Sino-Indian Competition In Maldives

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TIC Focus l

Former Maldivian President Mohammed Nasheed has clashed with the Chinese envoy over Male’s “alarming levels” of Chinese debt, which stands at $3.4 billion, even as India has regained ground in the strategically important Indian Ocean atoll nation with the exit of pro-Beijing former president Abdulla Yameen.

Speaking at a think tank meeting last week, Nasheed said that the cost of Chinese projects was extremely high and that from 2020 onward 15 percent of Male’s budget will have to be spent on paying back the debt owed to various Chinese companies. Responding to Nasheed on Saturday, the Chinese Ambassador Zhang Lizhong in a series of Twitter posts said that the cost of the bridge project was $200 million, of which 57.5 percent was funded by a Chinese grant aid.

He said that the Maldivian government had to pay back $100 million only, which was half of the project cost, spread over a 20 year period after completing a five-year grace period. Zhang said the total amount owed by the Maldives to China was $1.529 billion, which included $872 million in concessional loans and $657 million in preferential loans up to November last year.

In response, Nasheed tweeted: “Maldives total foreign debt includes the active sovereign guaranteed debt and not just government to government loans. The extent of Maldives sovereign guarantees to Chinese banks are at potentially alarming levels. We must all be mindful for the future. @AmbassadorZhang.” Responding to Nasheed’s tweet, Zhang asked him to refrain from spreading “continuous unverified and misleading information to the public”, which could harm bilateral ties.

Indo-China Competition

The Maldives consist of nearly 1,200 islands spanning more than 90,000 sq km, key shipping lanes pass through this tiny Indian Ocean nation.For years the Maldives has been in the sphere of Indian political influence. Beijing has stepped up its engagement in the country in recent years, seeing it as a key part of the investment route along its “Belt and Road Initiative”. This has prompted Indian fears that Maldives is slipping out of New Delhi’s grasp.

Those fears have grown as former Maldives President  Yameen used Chinese money to build infrastructure in the Maldives, and after he endorsed Beijing’s new Silk Road initiative.

Bilateral ties between India and the Maldives have deteriorated during Yameen’s time in power.In March 2015, Indian Prime Minister Narendra Modi cancelled his state visit to the island nation over the treatment of Mohamed Nasheed, the former pro-India Maldivian president who had been jailed.

The Maldives also declined India’s invitation to take part in its biennial eight-day naval exercise, Milan, this year. Yameen’s government has also rejected visa renewals for Indians who were legally working in the Maldives, without giving any explanation.

However, Yameen was defeated in September 2018 elections which saw opposition leader Ibrahim Mohamed Solih becoming the new president. Ibrahim is a member of the Maldives Democratic Party which is headed by Muhammad Nasheed who is staunchly pro-Indian.

New Govt in Maldives

After Yameen’s ouster, Prime Minister Narendra Modi had attended President Solih’s inauguration and said that India stood ready to help Maldives tide over its financial problems.   Modi visited Maldives in June, his first trip to a foreign country after taking over as prime minister for the second term, signalling the close cooperation between the two nations.

During the visit, the two countries agreed to start a regular passenger-cum-cargo ferry service between Kochi in Kerala and Kulhudhuffushi and Male in the Maldives. Maldives is also reported to be planning to scrap an agreement with China to build an Indian Ocean observatory in Makunudhoo, which would have given Beijing access to a critical space in the Indian Ocean both from the commercial shipping and strategic point of view.

President Solih had also made India his first official stop abroad.Signalling Male’s strategic importance, India has allocated Rs 576 crore to Maldives for development aid in the 2019-20 budget, higher than the Rs 440 crore allocated in the last budget.

Indian interference

It can be asserted that India is using Nasheed as its instrument. The former Maldives president is considered very close to India after having attained higher education there. He has stated several times publicly that India is closer to Maldives instead of China. India is using fears over Chinese deals and debt to instigate popular opinion against China.

Indian military deployment remains uncertain as Chief of Maldives National Defence Force (MNDF) Major General Abdulla Shamaal on 30 June affirmed that there are no plans to establish any foreign military headquarters in Maldives. Shamaal made the statement in response to opposition political parties’ allegations against the incumbent administration of attempting to lease land to the Indian army for them to establish a military base.

However, India and Maldives  signed six agreements, including defense and maritime during the trip. One of the agreements involves the Indian Navy and the Maldives National Defence Force sharing “white shipping information”—i.e., prior information about commercial shipping. Both nations also inaugurated a Maldives National Defence Force training facility and Coastal Surveillance Radar System.

In the end, it can be asserted that India is using the Maldives Democratic Party as a tool to roll back anti Indian influence such as China and PAkistan from the South Asian country in order to retain control over vital shipping lanes in the Indian Ocean. China will try to rectify the situation by renegotiating loans and deals with the new government in a similar manner to Malaysia. China will retain its interests in Maldives as they predate Yameen and will continue.