India Looks at the Maldives and Sees China

5 MINS READFeb 8, 2018 | 23:03 GMT
The Maldives is an Indian Ocean archipelago with a population of about 400,000.

The Maldives is an Indian Ocean archipelago with a population of about 400,000. China is investing hundreds of millions of dollars in the country, heightening fears in India that it's losing influence in the region.

  • India wants to see a sympathetic politician in power in the Maldives who can advance its interests, someone like exiled former President Mohamed Nasheed.
  • India's goal in the Maldives is to pressure President Yameen Abdul Gayoom to uphold a Supreme Court ruling that would enable Nasheed to return to the capital and potentially run again for president.
  • In turn, New Delhi wants a sympathetic government in the Maldives to re-evaluate ongoing Chinese infrastructure projects that India fears may presage Beijing's eventual military presence in the island nation.

A rapidly unfolding political crisis in the Maldives has created challenges and opportunities for India as the world's largest democracy seeks to limit Chinese influence in the tiny island nation of 400,000 people. On Feb. 5, Maldivian President Yameen Abdul Gayoom imposed a 15-day state of emergency. He ordered the arrests of two Supreme Court judges — including the chief justice — as well as Maumoon Abdul Gayoom, an opposition leader and former president who ruled the Maldives for 30 years with India's backing. Yameen's sweeping directive, which he says was aimed at thwarting a judicial coup, followed a Feb. 1 high court ruling that called on Yameen to reinstate 12 members of parliament and that overturned charges against nine jailed opposition figures.

Significantly, one of the opposition politicians is former President Mohamed Nasheed. Forced to resign in February 2012, the exiled Nasheed has hounded the government from abroad for suppressing democratic norms and for increasing the country's reliance on Chinese debt to dangerous levels. In response to Yameen's state of emergency, Nasheed tweeted a request for India to send troops to the Maldives to restore political stability. (In 1988, India sent 1,600 troops to Male, the Maldivian capital, to undercut an attempted coup involving Tamil rebels from Sri Lanka.)

Ruling Out a Military Option

While India wants to see a sympathetic politician, such as Nasheed, in power who can advance its interests, it reportedly has rebuffed his request for military intervention or even a special envoy for Male. This refusal is to be expected. Sending troops to the Maldives would undoubtedly reinforce New Delhi's image as a domineering hegemon unafraid to use force against its smaller neighbors. Such a reaction could tilt the regional political scales in China's favor, which already has benefited from anti-Indian sentiment at play during December elections in Nepal, where the pro-Chinese Left Alliance, led by former Prime Minister Khadga Prasad Oli, swept to power.

In any case, India's goal in the Maldives will remain the same: to pressure Yameen to uphold the Supreme Court's ruling, which would enable Nasheed to return to Male, face another trial and potentially run again for president. (To be sure, the court's Feb. 6 reversal of its Feb. 1 decision to free the jailed opposition leaders complicates India's aims.) In turn, New Delhi wants a sympathetic government in Male to re-evaluate a raft of ongoing Chinese infrastructure projects that India fears may presage Beijing's eventual military presence in the Maldives. New Delhi is already alarmed by China's possible use of Pakistan's Gwadar port as a naval base, in addition to its newly launched base in Djibouti on the other side of the Indian Ocean. It is also keeping an eye on Sri Lanka's Chinese-funded Hambantota port. India wants to avoid the same elsewhere along its periphery.

Underpinning Chinese and Indian interest in the Maldives is its strategically significant location astride key shipping and energy routes, including those crossing from the Gulf of Aden to the Strait of Malacca. From Beijing's point of view, the Maldives could offer a critical naval port and air base to help safeguard these important sea lines of communication. India, which seeks to remain the dominant naval power in the Indian Ocean, wants to avoid any Chinese naval presence in the region — thus its interest in supporting a pro-Indian politician like Nasheed.

Fiscal Constraints

With the military option off the table, India can resort to a mix of diplomatic overtures and economic appeasements to bend Maldivian politics in its favor. But fiscal constraints underscore the limits of India's economic heft, while also highlighting its competing priorities as it seeks to stave off challenges to its traditional status as the dominant military and economic power in South Asia. The Maldives accounts for $19 million — or 2 percent — of India's $865 million foreign aid allocation in 2018, according to the recently unveiled federal budget. This is the lowest amount India has set aside for any country in South Asia. Bhutan, by comparison, another tiny and sparsely populated country on India's periphery — and another site of Sino-Indian competition — was allocated 48 percent.

This is problematic because money is what the Maldives needs to invest in infrastructure as it diversifies its $3.6 billion economy, promotes connectivity between its islands and broadens the tourism industry at the heart of its economic growth. Lacking adequate domestic funding, the Maldives is looking outward to make ends meet, and this brings in China. Chinese President Xi Jinping visited the Maldives in September 2014, leading to Yameen's participation in China's Maritime Silk Road, an extension of its vast Belt and Road Initiative. Ever since, China has increased its economic involvement in the Maldives, granting a $373 million loan from its Exim Bank to upgrade the airport, constructing the China-Maldives Friendship Bridge and building a 7,000-home housing project.

Yameen signed a free trade agreement with China in December to grow the country's fisheries exports, which will be destined for Asia's largest economy. The agreement was steamrolled through the Maldivian parliament, inviting sharp criticism from members of the opposition. Nasheed says the Maldives is falling into a Chinese debt trap that will threaten the country's sovereignty — echoing similar complaints heard from the opposition in Sri Lanka, where the government awarded a 99-year lease to China on the Hambantota port.

The funding requirements of Maldivian infrastructure suggest the country will have a difficult time diversifying away from Chinese funds. More broadly, India's fiscal constraints suggest New Delhi will continue to pursue a diplomatic pathway aimed at gathering international support to pressure Yameen's government to uphold the Supreme Court's ruling. But in the broader picture, India will keep running into the new reality that it is no longer the only dominant power active in South Asia.

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