India- Maldives Partnership: A Strategic Imprint in the Indian Ocean

Financial Assistance Package

Under this initiative, New Delhi has endeavoured to expand its outreach and enhance its cooperation with its neighbours. In this light, New Delhi has recently inked four agreements with Male, on the back of India’s Foreign Secretary’s visit on the 9^th of November. These agreements include community development projects and cooperation in sports and youth affairs that are aimed to foster the socio-economic welfare of the Maldivians. New Delhi has announced and introduced an array of initiatives that include a $500 million infrastructural development project, introduced a cargo ferry service between the two countries, established a ‘travel bubble’, provided an uninterrupted supply of essential commodities and extended an additional financial aid of $250 million to help revive the economic meltdown.

Upon signing the memos, the Indian Foreign Secretary opined that “The MoUs which we have signed today are emblematic of our strong development partnership which is multi-faceted and designed to meet the specific requirements of the Government and people of Maldives.” Besides the agreements, New Delhi has granted US $100 million, the last remittance of the $500 million package deal, signed earlier this year in August for the development of the Greater Male Connectivity Project (GMCP), the largest infrastructure project of its kind in the country carried out by India at an affordable price.

GMCP oversees the development of roads, bridges and causeways across several islands and strings the following archipelagos of Villingili, Thilafushi and Gulhifahu with Male, hence reducing the commercial and residential burden off the capital city. Withal, upon completion of the project, it would further extend the physical connectivity of Male to two more islands with the help of the Chinese built Sinamale Friendship Bridge that will provide fillip to economic activity and subsequently, generate employment opportunities to all in the region. Apart from physical accessibility, the Indian assisted programmes include water and sewage projects in 34 islands, the development of a port in Gulhifalhu, the construction of a cancer hospital and the building of a cricket stadium in the island of Hulhumale, the establishment of fisheries in various archipelagos and the expansion of airports across the island nation.

The inaugural launch of the cargo ferry service between India and Maldives set-off on the 21^st of September by India’s Minister of State for Shipping and his Maldivian counterpart, Minister of Transport and Civil Aviation in a virtual ceremonial event. The cargo ferry service operates between Tuticorn and Cochin ports in India with Kulkudhufushi and Male ports in Maldives. This commercial maritime connectivity between the two countries would entail in the development of the Northern region of Maldives and further revitalise the mercantile interactions between the two economies.

A tourism driven and dependent-economy, Maldives was the first nation in the neighbourhood to open its gates to India by virtue of the ‘travel bubble’ for the movement of people for employment, tourism and medical emergencies. Likewise, the Indian Foreign Minister has communicated that there will be a renewal of allocated items for the supply of essential goods to Maldives during 2020-21. These allocations will ensure to guarantee and safeguard Maldives’ food security, medical requirements and warrant for the continuous supply of essential construction material for its infrastructure development. The provision to continuously supply essential items to Maldives, results in economic stability and ensures modest rates on the selected imported goods. Likewise, India has rendered services by scurrying food and medical supplies, to other SAARC member countries to cope with the pandemic distress.

Bearing in mind the magnitude of the pandemic and its catastrophic ramifications on the global economy, India has played the good Samaritan to help resuscitate the island nation’s economy by extending an ‘urgent financial assistance’ concessional loan of $250 million. The unconditional nature of the concessional loan enables Maldives to use the aid at its own discretion without having to refer with the Indian Government. Appreciating New Delhi’s swift response, Maldives President Ibrahim Solih thanked the Indian Prime Minister Narendra Modi and expressed his gratitude in a tweet that read “A landmark moment in Maldives-India cooperation today as we receive Indian assistance of USD250 million as budget support and USD500 million for the Greater Male Connectivity Project.” Similarly, Maldives Foreign Minister Abdullah Shahid noted that the financial package would help mitigate the revenue gap in the country and aid the government to meet its immediate financial requirements. He also added that the infrastructural project is “a new milestone in India-Maldives ties that will anchor the economic and industrial transformation of the Maldives.”

Neutralising Chinese Influence from Maldives

In contrast to India’s unconditional concessional loan of $250 million to Maldives, China’s ‘debt-trap’ diplomacy and loan shark economic policies have left the country’s treasury bleeding. Taking a dig at China, former Maldives President Mohammad Nasheed tweeted that “The ‘super low-cost assistance’ announced by India is in sharp contrast to the ‘eye-watering expensive commercial loans that leaves the nation mired in debt’”. He has time and again vociferously expressed his displeasure for Chinese investments and endorsed for the revocation of their loans. India’s timely monetary assistance has warranted in addressing Maldives’ financial predicaments, and marks India’s commitment towards mutual development, and its sincere drive to convert its bilateral ties into a strategic partnership.

The series of initiatives undertaken by India on the socio-economic front, displays its ethos and resilience to collaborate, cooperate and progress, through mutual understanding and development. India’s partnership with Maldives is a testament to its growing steadfast commitment towards ‘development cooperation, transparency, full participation and ownership of the host country,’ and reaffirms its outlook towards the welfare of its neighbourhood. Similarly, Maldives’ reciprocal ‘India First’ foreign policy has signalled to China, its political intent and diplomatic predisposition. Complementing Maldives’ politico-diplomatic asseveration, India has pledged to extend its full support to Maldives’ candidate for the upcoming 76^th election of the President of the United Nations General Assembly in 2021.

Eyeing to make inroads into the archipelago with its BRI projects and scheming loans, China has failed to create a positive impact in the country. On the contrary, it has left an indelible mark in the country’s coffers by leading the country into a debt-trap and virtually bankrupting the state with its debts. Maldives owes an estimate debt of $1.4 billion to China. While its current annual GDP stands at over $5.7 billion, the pandemic has retarded the revenue and economy further damaging its GDP. A sense of fear has gripped the officials in Male, who believe that the government may fail to repay the loan by 2022-23 and as a result, share the same fate as Sri Lanka.

For China, the archipelago is a strategic asset that commands vital shipping lanes in the Indian Ocean. Over and above the islands are only few hundred kilometres away from India. Having a foot in the islands could enable China to install listening and observation posts in the area and confine India’s influence within its territorial waters. However, the incumbent Maldivian government under President Solih has taken cognisance of the economic disaster caused by China and has turned towards India for its socio-economic and financial assistance, thereby balking Chinese interests in the region.

As India seeks to re-establish its maritime imprint in the IOR and restore the balance of power, its politico-diplomatic engagements are increasingly crucial to disengage and deter the expansion of Chinese maritime influence. Persistent interactions, mutual communication and development with the neighbourhood is the need of the hour, if India seeks to enhance and restore its influence against the Chinese sway. As India’s politico-diplomatic rules of engagement are benevolent and mutually agreeable in contrast to the Chinese parochial, self-obsessed and belligerent disposition, it gives India an edge over its challenger. Leveraging this advantage is left to the imagination of the politico-strategic community in the South Block.

Pic Courtesy- Google Maps, Maxar Technologies

(The views expressed are personal.)