Maldivian President Ibrahim Solih is in India on a 3-day visit, his first foreign visit since assuming power. After Solih won the election against the previous China-leaning president, Abdulla Yameen, PM Narendra Modi was the only head of government to be invited to Solih's swearing-in. Solih is in Delhi to mend fences with India, and explore investment opportunities.
Solih's election win over Yameen means that India once again has a friend in the Maldives.
In a speech soon after his win, Solih said that the Maldives' coffers were drained of several billion rufiyaa due to corruption, embezzlement, and indebtedness to China under the previous government. So as he arrives in India, here are the issues between the two countries that have been or are being resolved to get bilateral relations back on track.
Helping Escape Chinese Debt
With the defeat of Yameen, new president Solih has been outspoken about the extent of the Maldives’ Chinese debt – about $1.5 billion, he said in a speech.
After talks between Modi and Solih on 17 December, India announced $1.4 billion of aid to the debt-ridden country.
A Whole New Visa Agreement
Under the Yameen government, the Maldives had stopped renewing and granting work visas to Indian nationals, in an apparent diplomatic snub to New Delhi as Yameen cosied up to China.
But under Solih, the two nations have been working through the visa issue and are have signed a new agreement on visa facilitation after their talks. The new agreement will allow Indian investors to travel to the Maldives, and will also allow more Maldivian students to study in India.
The Helicopter Snub Undone
Earlier this year, Yameen had quite rudely indicated to Delhi that it take back two of the helicopters it had gifted the Maldives.
But soon after Solih's victory, in an interview to WION, the new Defence Minister Mariya Ahmed Didi had said, "It’s not in our culture to ask neighbours to take back what they give."
The helicopters, Maldivian Foreign Minister Abdullah Shahid had said in an interview to Times Now, would be staying in the Maldives after all, to be put to civilian uses like search and rescue operations and medical emergencies.
Dornier Back in Play
The Dornier aircraft, offered as yet another gift by India to the Maldives, had been rebuffed by the Yameen government. Uh, why would the Maldives reject a free aircraft?
Well, speaking to Times Now, Maldivian Foreign Minister Shahid had said that the previous government preferred to buy the Dornier on loan from Pakistan instead, because they would get a commission... but that the new government had no interest in taking on another loan, and would prefer it as a gift from India as offered.
Refurbishing the Main Port
Malé needs to relocate and refurbish its existing commercial port, as it can no longer deal with the number of ships coming in. The Wire reports that Malé wants to use India’s proposed line of credit of at least $700 million to redevelop its port. But there’s a small problem: The last time an Indian company was given a contract to redevelop national infrastructure, it went badly. Indian infrastructure company GMR was given the contract to redevelop Malé’s airport in 2010, but was unceremoniously kicked out in 2012.
Not that Malé didn’t have its reasons; GMR had been charging each passenger $27 in airport development charge and insurance surcharge, India Today reported. The Maldivian civil court had ruled against such a surcharge, and GMR took the case to arbitration in Singapore. The $500 milion deal had also been a victim of regime change as the Hassan government took over from the Nasheed government that had awarded GMR the contract.
But it does mean that private Indian players may be cagey about investing in the Maldives.
Wait, Not So Fast...
Yes, the bilateral relationship appears to be back on track, and yes the new government is much less keen on getting in bed with China than its predecessor, but a few facts remain: The Maldives has signed contracts with Chinese companies for infrastructure projects, and Solih has indicated that even though these were negotiated at inflated prices, there is no choice but to continue with them and try to mitigate further damage.
The Solih government has also said that China remains a friend, and one that has brought the Maldives economic benefit.
Like all small countries on India’s periphery, the Maldives will try to leverage both India and China against each other to get the best deal for itself, as all countries do – it will still be up to India to inspire friendship and cooperation.
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