- Extends USD 1.4 Bn budgetary support
By JK Verma 24 December 2018
New Delhi. 23 December 2018. Prime Minister Modi, after meeting visiting President Mohamed Ibrahim Solih of Republic of Maldives, announced that “India will extend financial assistance of $1.4 billion to the Maldives in the form of budgetary support, currency swap agreements and concessional lines of credit, for its social and economic development.”
It was the first foreign visit of President Solih, after taking over on 17 November 2018, as President of Maldives, which consists of 26 atolls and about 200 islands. Solih came to India on a three day visit with a high level delegation and stayed in President House as a special guest, which indicates the close relationship between both the countries.
Besides the financial assistance, India and Maldives also signed agreements/MoUs and joint declarations on visa arrangements, cultural cooperation, mutual cooperation to improve the ecosystem for the enhancement of business of agricultural products and joint declarations in the fields of information and communication technologies. Both countries also agreed to work jointly on several fields including health, investments, tourism etc.
India also offered 1000 extra seats to Maldivian people for training in diverse fields including judiciary, policing, community development, information technology, media, leadership, audit and financial management just to name few. Due to relaxation on visa rules more people can come for medical treatment and the parents can accompany their children, who are studying in India.
Both the countries also agreed on the maintenance of peace and tranquility in Indian Ocean Region and delivered a terse message to China, that they would not allow their territory to be used against the interests of other country. It was also decided to increase patrolling, aerial surveillance, exchange of information and capacity building in Indian Ocean Region.
India and Maldives also agreed to fight terrorism. It is important for India and other democratic countries, as influence of Wahabism was increasing rapidly in the island nation. The Middle East countries have pumped massive economic assistance in Male, which resulted rise of Islamic fundamentalism and extremism. Number of mosques and Madrassas were considerably increased and it resulted in young Maldivian youths joining the the Islamic State of Iraq and the Levant (ISIL) which is also known as Islamic State (IS). 200 radicalised young Maldivians had gone to Iraq and Syria to join ISIL from the population of approximately 440000 only. It clearly indicates the high level of radicalisation of the country which is dangerous for the whole region including India.
The visiting president also reaffirmed the ‘India-First Policy’ and mentioned that the archipelago nation will work closely with India. President Solih also invited India’s private sector to work in the development of housing, healthcare, education, tourism, water and sewerage as well as infrastructure development of the island nation. It is important that Indian private sector grab the opportunity and involve itself in the development of the Maldives, which is struggling with repayment of massive loan given by China mainly during the presidency of tinpot dictator Abdulla Yameen, who helped Beijing by giving all the contracts with ulterior motive of undermining Indian interests. In fact President Yameen cancelled a contract of GMR, a subsidiary of Bangalore-based GMR Infrastructure Ltd. The Indian company won the contract after a global tender in 2010 to upgrade the airport and construct a new terminal.
The Maldivian Democratic Party (MDP) won elections by disparaging the mounting Chinese debt on the country; hence President Solih may cancel few contracts given to Chinese companies on unreasonable terms and conditions. President Solih also promised to reassess all the contracts. These cancelled contracts as well as new orders can also be awarded to Indian firms.
President Solih defeated President Yameen in an election in October 2018 although it was projected that Yameen who imposed emergency, raided Solih’s election office, denied visas to international observers including India, arrested and imprisoned his half brother and former ruler Abdul Gayoom, Supreme Court judge and police commissioner, will not permit the election commission to hold free and fair elections. Analysts also mentioned that Yameen would manipulate the elections as he had overt as well as covert support of China.
Nonetheless The Ministry of State Security (MSS), the intelligence and security agency of China, which look after the internal as well as foreign intelligence, had rightly analysed that if the elections are rigged there will be very strong international condemnation, hence it advised Yameen to contest the elections on the basis of developmental work completed during his presidency. However Maldives, which has a total population of about 440,000 people, was much against the massive construction activities and rising debt which may be between $1.5 billion to $3 billion.
Mohamed Nasheed, who served as president of Maldives from 2008 to 2012 and was the first democratically elected president and founder member of Maldivian Democratic Party, stated that Chinese Ambassador gave him in writing that Chinese loan on Maldives was $3.2.billion dollars. However later Chinese asserted that the figure was highly “exaggerated.”
Even after the announcement of election results in which Solih of MDP defeated Yameen, the analysts apprehended that the latter would not handover the power. Hence the Indian, Ministry of External Affairs issued a congratulatory press release even before the formal announcement of election results by the commission. Not only India, Sri Lanka, United Kingdom and United States all congratulated Solih. The US Mission in Maldives issued the press release on September 24 congratulating Solih on his victory also mentioned that “We expect all parties to respect the will of the Maldivian people and support a peaceful transition of power through the November 17 inauguration”. The press release was tantamount to a veiled threat, that power should be transferred as per the scheduled programme.
In view of the strategic location of Maldives, China was increasing its influence in the country which was a cause of concern not only to India but for USA, Japan and other countries. China has opened an Observation Station at Makunudhoo, which can accommodate even submarine. China which has already taken two islands, is constructing a military base there.
The relations between India and Maldives declined, when Yameen extended undue favours to China and also imposed emergency in the country, which lasted 45 days. China, which considers India as its prospective adversary, constantly makes efforts to encircle India. Beijing made huge investments in India’s neighbourhood. Bangladesh already surrendered Chittagong port to China while Beijing has established a signal intelligence station at Coco Islands of Myanmar after taking it on lease. Recently China and Myanmar also signed a multibillion dollar agreement to develop a deep seaport in Kyaukpyu in Rakhine state. The port will be near to Vishakhapatnam port where India is developing a submarine base. Although Myanmar has reduced Chinese investment but the port is very important strategically.
Sri Lanka had to surrender Hambantota port to China on lease as it failed to repay the loan installments. Maldives had already given unspecified number of islands to China and it constructed a naval base in Marao Islands, where a missile fitted nuclear powered submarine is deployed. Pakistan which is passing through an economic disaster because of abetting terrorism in its neighbourhood, has already given control of Gwadar port. In fact China Pakistan Economic Corridor (CPEC) which was projected as a great achievement will be a death knell for Pakistan. China has also opened its first overseas naval base at Djibouti in 2017.
Besides Maldives Chinese intelligence agency MSS also got another jolt in Sri Lanka where a constitutional crisis erupted when President Maithripala Sirisena dismissed Prime Minister Ranil Wickremesinghe and appointed Mahinda Rajapaksa as prime minister. However Sri Lankan Parliament and judiciary rejected the move and Ranil Wickremesinghe had to be reinstated. President Sirisena and Rajapaksa are known to be pro-China while Wickremesinghe has soft corner for India. Chinese intelligence which is known for its ruthless moves will not digest these two defeats so easily and will make all-out efforts to retain its hold in Male.
It is a diplomatic victory of India that the newly elected President Solih paid first visit to India and also mentioned that the country would adhere to ‘India first policy’ but Beijing would also try to win over the new president. China is already working on numerous important infrastructure projects inclusive of renovation of the airport and a bridge to link the airport with Male. The 70 percent loan of the island nation is of China and it has to pay an installment of $ 92 million a year to Beijing. The gross domestic product of Maldives is around $ 3.9 billion, while the annual revenue is $1.5 billion only, hence it will be difficult for Maldives to repay the debt. It will be difficult for India to compete with cash rich China therefore India should take the support of wealthy countries like Japan and European Union. The lone super power America will also like to contain China and extend its assistance to India.
(Jai Kumar Verma is a Delhi-based strategic analyst and member of United Services Institute of India and Institute for Defence Studies and Analyses. The views in the article are solely the author’s. He can be contacted at firstname.lastname@example.org)
The article appeared in www.aviation-defence-universe.com on 23 December 2018