India-Maldives: Strengthening Partnership

With the Indo-Pacific region vying for greater international attention, the Indian Ocean has assumed a greater criticality for the regional powers. Inevitably, India and China competing for greater influence in the common waters has lent the region with greater complexities and greater possibilities for increasing their activities and mark their presence. In this backdrop the recent developments in the island nation of Maldives augurs well for India and a stable regional landscape.

The last September ushering-in of President Solih, the Maldivian Democratic Party (MDP) leader, led to resurgence of Indo-Maldivian bilateral relationship. With MDP recently winning the majority (65 seats in the 87 members) strength in the People’s Majlis (the parliament) the bilateral relations looks poised for better times ahead. This mandate of two third majority in the parliament, a first for any political party, has several positive implications. At the domestic front, the garnering of such numbers reflects the trust that the people have reposed on this MDP led government. In the last decade, ever since the introduction of the multiparty democracy in 2008, no one single political party nor coalition ever received this huge mandate essentially pointing to President Solih’s ability to keep his election promise of introducing domestic reforms for greater democratic norms and equitable mechanism as well as a review of the foreign policy undertaken by his predecessor.

MDP’s main electoral pitch which included the ‘Agenda 19’ will drive the legislative reforms as well as ensure legal powers and greater financial means to local councils. The electoral promise also included, introduction of minimum wage Bills, unemployment benefits, reform the tax regime, and reforming the judiciary. Prior to Solih’s win the previous authoritarian president had corroded the democratic elements and seen high level of corruption pervading the system. Not surprisingly, in the ensuing political developments, India was isolated from Maldives and the once two close friendly neighbours, Delhi and Male, barely had much bilateral interaction. While none can underestimate the Maldivian strategic advantage barely few hundred kilometres from India’s southern tip of Lakshadweep Islands, India’s ability to influence in Male had weakened during the last five years and was reduced to being marginalised in the new friendships that Male seemed to find.

In the past, India and Maldives have enjoyed strong bilateral cooperation, traversing defence and socio economic developments. PM Modi has reiterated India’s commitment to deepening the partnership and the two sides have decided to work together in areas, including fisheries development, tourism, transportation, connectivity, health, education, information technology, new and renewable energy and communications too. With nearly 30,000 Indian working mainly in tourism and health sectors, the warming of relationship has eased the previous uncertain times that had fallen on them.

There are multi-fold reasons for India to engage more deeply with Maldives, especially in the background of the interesting developments in the region. Re-establishment of democratic norms and restoration of close bilateral tie would be India’s main interests in Maldives. As Modi in his congratulatory call to President Solih on his recent win last week, hoped that this phase would consolidate the democratic process and strengthen the democratic institutions in the island nation. There is a clear interest on both sides to closely engage and develop and widen the scope to strengthen bilateral ties to deliver tangible benefits the people of Maldives as well as maintaining peace and security in the region.

President Solih, soon after taking over, had signalled the interest in working closely with India and in keeping with the new emerging positive atmospherics. There has been three high level exchange of visits in less than six months, beginning with PM Modi’s presence in Male at the swearing in of President Solih who soon visited India and in March this year External Affairs Minister Sushma Swaraj’s visit to Maldives.

Thus, the last few bilateral visits have resulted in some key agreements:-

• Agreement on the Facilitation of Visa Arrangements;
• Memorandum of Understanding on Cultural Cooperation;
• Memorandum of Understanding for Establishing Mutual Cooperation to Improve the Ecosystem for Agribusiness;
• Joint Declaration of Intent on Cooperation in the field of Information & Communications Technology and Electronics.

The Maldivian Foreign Minister Sahid’s reiteration of Male’s ‘India First policy’ and their sensitivity towards Indian security and strategic concerns, provided a perfect frame work for India to offer the US$ 1.4 billion a line of credit. This support would be critical for Male given its present huge fiscal debt. Maldives, a middle-income country, with tourism and fisheries sectors contributing largely to its nearly 7 US$ economy and 4.8% growth rate, has in the past few years been faced with a huge debt crises, with its current account deficit now standing at 17.1%. Male was made to agree to interest rates on concessional loans between 1.5% to 2%, and around 6% to 7% for those loans under sovereign guarantee from China in lieu of the large infrastructural developments planned for Maldives. These projects included the four lane Sinamale Bridge linking Male to Hulhule Island and a massive housing project on Hulhumale for which China gave an invoice for US $3.2 billion. Indeed as per a recent International Monetary Fund report, managing the rising public debt would be Male’s main challenge in the days to come. While China has said they will only be willing to renegotiate the terms of payment, Maldivian Finance Minister Ibrahim Ameer has expressed intentions to review all other unfinished projects as well as reducing the interest rates. Solih, now with this strength in the Majlis, will be able to review the deepening crises of debt emanating from the many projects that seemed to tie Male to Beijing, and find more partners for development and growth.

Apart from the debt, Maldives has been also struggling with gradual rise of sea levels amongst other environmental issues, and Indian support will be vital in addressing many of the imminent danger this small island nation faces. While Indian LED bulbs lit up the streets of Malé City, India and Maldives will have to ensure the light in the partnership burn stronger irrespective of the governmental changes in either of the capitals. Sustaining this bilateral partnership is critical to both as well as for a peaceful region.