Maldives is PM Modi’s First Foreign Destination. Do You Know Why?

The Maldives is PM Modi’s first foreign destination and he will stopover in Sri Lanka on the way back. The Policy Times digs into India- Maldives relations to find out why PM Modi has chosen Maldives as his first destination, when apparently India has many other foreign policy priorities to address.

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Heading: Maldives is PM Modi’s First Foreign Destination. Do You Know Why?
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Why is Maldives, the first country that PM Modi is visiting this time? What has changed since the last tenure, when Maldives was the last of the SAARC countries that he visited? Andwhy didn’the choose a BIMSTEC country as his first destination, after inviting all of them to his swearing in?

All these questions and more will be answered in this article.

On the face of it, it looks like PM Modi is just reciprocating President Solih’s state visit as per protocol but a deeper analysis reveals that it is not as simple as it seems.

Strategic Location

The most important reason is the strategic location of the Maldives in the Indian Ocean, a region which India sees as crucial for its security and economic prosperity. The Maldives is in close proximity to major shipping lanes, especially those of oil and gas. The Indian Ocean region has today become very much important in maritime trade because it carries two-thirds of the global oil cargo, one-third of the bulk cargo, and half of all the container traffic. The fact that India and China import about 80 % and 60 % of their oil and gas requirements respectively and most of it comes from the Gulf through the Arabian Sea and the Indian Ocean to their shores is enough to understand how crucial the region is.

A picture from MarineTraffic.com illustrating the density of shipping traffic

MarineTraffic.com

The proximity of the Maldives to strategic Indian naval bases like Lakshadweep and Kochi makes it a crucial node in China’s ‘String of Pearls’ strategy of surrounding India with military bases. The title of an article by Ajai Shukla in the South China Morning Post “In Maldives, India’s Modi sees the glint of a Chinese pearl” sums this up perfectly. Having a hostile regime so close is no doubt harmful to India’s security.

Also, a Chinese presence in the Maldives could upset the good ties that India has with Seychelles and Mauritius-the other island nations of the southern Indian Ocean. For an India that wants to be the net security provider in the Indian Ocean region, it would be imprudent to depend on the US forces at Diego Garcia to protect itself in the case of Chinese aggression. Even that may not remain an option in the future due to increased calls on Britain to decolonize the Chagos Islands in which Diego Garcia is located.

Now that the South China Sea is almost wholly under Chinese dominance, the onus is on India and the remaining world powers to prevent the Indian Ocean region from becoming the next ‘Chinese lake.’

Chinese

Increased Chinese Presence in recent years

China had made huge inroads during the tenure of the two previous presidents-Abdulla Yameen and Mohammed Waheed. During the tenure of Mohammed Waheed, the contract given to GMR group for the development of the Male international airport was scrapped.

Relations were at an all-time low during the tenure of President Yameen- there was a visa row, India was asked to take back two helicopters that it had gifted and key projects like the development of Male Airport, Hulhumale Island City and the bridge from the airport to Male city, which is today called the China-Maldives Friendship Bridge were awarded to Chinese companies. Enactment of laws like the one which allowed foreigners to possess an island in perpetuity in return of an investment of $1 billion made India fear a Chinese takeover. The Maldives also got closer to Pakistan with a power plant deal and went against India’s decision to boycott the SAARC summit due to Pakistani terror.

Return of an India friendly government

After so much of bad blood and a long hiatus, the Maldives Democratic Party (MDP)led by Ibrahim Solih and Mohamed Nasheed with a declared ‘India First policy’ has come back to power. So it is not surprising that India would like to get the relations back on track at the earliest. Some of the troubling issues have been quickly resolved by the new MDP government like that of the helicopters gifted by India and the visa issue. The Maldivian Foreign Minister Abdulla Shahid has said in an interview to The Hindu newspaper that “ties with India are rock solid”. It is important for India to go in when the door is open and not cede any more space to China.

Fear of a debt-trap

The Maldives at present is going through a challenging financial situation due to mounting debt to China. According to various news reports and Chinese statements, the figure is around $1.3 billion which is a quarter of the GDP. But there are fears that the debt could be as much as $3 billion. Some observers have also said that the Maldives could go the Sri Lanka way, i.e. have to hand over assets like ports to China. During the state visit of President Solih to India, PM Narendra Modi said “For Maldives’ social and economic development we are providing a financial assistance of $1.4 billion in the form of budgetary support, currency swap agreements and concessional lines of credit” which could help to restart Indian projects and contribute to debt servicing. The currency swap deal would save precious foreign exchange reserves of Maldives.

Scope for Trade and Cooperation

The Maldives also offers a lot of scope for trade and cooperation. People to people contacts are good. There are around 25000 Indians who live and work in the Maldives mainly as professionals- teachers, nurses, doctors, etc. India has been the preferred destination for Maldivians for higher education.

According to data from the Indian Ministry of Commerce, the present bilateral trade is only $222.68 million. This can definitely be increased if positive steps are taken both bilaterally and at multilateral fora like the IORA and BIMSTEC. There is a lot of scope for cooperation given the emergence of the ‘Blue economy’ that depends on sustainable use of ocean resources for economic growth and improved livelihoods. Areas include marine energy production, fisheries, aquaculture, seafood processing and storage, joint exploration of marine resources, research, improved maritime connectivity, etc. The joint statement issued during the state visit of President Solih to India identifies various areas for developmental cooperation, including private sector involvement in development of housing and infrastructure, water and sewerage systems in the outlying islands, healthcare, education, and tourism.

india maldives relation

Joint fight against terror and organized crime

In the light of the recent terror attack in Sri Lanka, it has become inevitable for all countries in the region to join hands to combat radicalization. The Maldives has itself been a victim of radicalization as 69 of its citizens had left to fight for ISIS and the Sri Lankan blasts mastermind, Zahran Hashim is alleged to have visited the Maldives before the blasts. In this direction, the proposed signing of the Mutual Legal Assistance Treaty is definitely a good step as it would allow a better exchange of information and easier prosecution of offenders.

Terror attacks and radicalization are as big a threat to the Maldives as climate change because its economy is heavily dependent on tourism. Official statistics from the 2018 Tourism Yearbook published by the Ministry of Tourism of Maldives says that 23% Maldives GDP was from tourism in 2017. And as seen in the case of Sri Lanka, falling occupancy rates in hotels can have a devastating effect on the local economy.

tourism

Of late, the Indian Ocean has also become a hotbed of crimes like piracy, narcotics and human trafficking which are adversely affecting the peace and security of the region’s population.

India and Maldives as Good Neighbours

India has always been at the forefront to assist the Maldives as seen in the case of the 2014 Male drinking water crisis (Operation Neer) and the 1988 Operation Cactus  to defeat the People’s Liberation Organization of Tamil Eelam (PLOTE) militants planning a coup d’état to take over the Maldives and even during the recent induction into the Indian Ocean Rim Association (IORA).

During the state visit of President Solih, both nations reiterated strong commitment to further strengthening and reinvigorating the traditionally strong and friendly relations between India and the Maldives, nurtured by geographical contiguity, ethnic, historical, socio-economic and cultural ties between the peoples of the two countries. They also reiterated an abiding faith in, and commitment to democracy, development and peaceful co-existence.

Future Trajectory

The Maldives will continue to be a contested space as China is no pushover and Maldives doesn’t have the financial might to ask the Chinese companies to pack their bags and leave. Even though the new government may openly advocate a pro-India policy, it would still have to engage with China.

India has to understand that it cannot have a big brotherly attitude in the neighbourhood, as it had at times in the past, due to the increased Chinese presence. It is best for India is to make it clear to the Maldives that we aren’t against any country doing infrastructure development, but these projects should not be inimical to Indian national security.

India has to change along with the times. To counter a rising China, India has to cooperate with the rest of the Quad, i.e. USA, Japan, and Australia and work together for the socio-economic development and security of the region unlike in the past when India looked upon the entry of any extra-regional or third country’s entry into its backyard with suspicion. The EU could be the other major player.

The $1.4 billion aid cannot be a one-off and India must be prepared to help with more funds if required as these are the transactional costs in modern diplomacy. With the rise of the Blue Economy, we can hope for Blue growth and thus a diversification of economy which would reduce the dependence on tourism.

An assurance from the Maldives to respect Indian security concerns while doing infrastructure development will be the most important confidence-building measure. Pending projects have to be speeded up and actual delivery has to happen to buttress India’s credentials as a trustworthy partner.

The Trilateral Security Maritime Security Co-operation Initiative which was signed between Sri Lanka, Maldives and India in 2013 and held back due to the political situation in the Maldives, can now be expanded to include Mauritius and Seychelles and realize the vision of SAGAR( Security and Growth for All) as stated by PM Narendra Modi. This would also fulfill India’s goal of being the net security provider in the region.

With so many new areas of synergy, the hope is that both nations would continue their relations in the same spirit as seen in the last few months. What remains to be seen is how both the governments go about it, starting with PM Narendra Modi’s address to the Maldivian Parliament in a few days time.

Author Bio

Rajesh Saravanan is a student at Hindu College, University of Delhi. He has a keen interest in foreign policy and aspires to be a diplomat.  He is doing his internship with The Policy Times and occasionally blogs at Indian Zest.

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Heading: Maldives is PM Modi’s First Foreign Destination. Do You Know Why?
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The Maldives is PM Modi’s first foreign destination and he will stopover in Sri Lanka on the way back. The Policy Times digs into India- Maldives relations to find out why PM Modi has chosen Maldives as his first destination, when apparently India has many other foreign policy priorities to address.
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The Policy Times