New Maldives Regime Will Tread Cautiously in Foreign Affairs

COLOMBO: The newly elected Ibrahim Mohamed Solih government in the Maldives is likely to tread cautiously in foreign affairs particularly vis-à-vis India and China, even though foreign media is consistently portraying the regime change as one signaling the end of Chinese influence and the enhancement of Indian influence.

Given the defeat of the manifestly pro-China Abdulla Yameen in the September 23 Presidential election, foreign media reports blithely assumed that President Solih will swing towards India and the West abandoning China altogether.

Indeed, the optics on November 17, the day on which Solih was ceremonially installed as President, would have given such an impression.

Indian Prime Minister Narendra Modi was the only Head of a foreign Government to attend the ceremony, and he was quite clearly the star of the show. In contrast, China was represented by the Minister of Culture and Tourism, Luo Shugang.

In his first speech to Maldivian MPs as President, Solih said: "We will endeavor to fortify the existing ties the Maldives has had with India and other regional countries.”

And India was the only country the President mentioned specifically.

In the half an hour bilateral between Solih and Modi, Solih told the Indian leader about the "dire economic situation" facing the Maldives and sought Indian investment in the housing and sanitation sector. On his part, Modi sought more opportunities for Indian companies to invest in the Maldives in different sectors.

It was announced that the Maldivian Minister of Foreign Affairs Abdulla Shahid will make an official visit to India on November 26.

In a first positive pro-Indian step since 2013, Defense Minister Mariya Ahmed Didi said that the Maldives would not be returning the two Indian naval helicopters gifted to the country.

"It’s not in our culture to ask neighbors to take back what they give," Mariya said.

Former President Abdulla Yameen had wanted the choppers out because he felt that its Indian crew were intelligence operatives.

Pressure From Nasheed

Former President and chief of the ruling Maldivian Democratic Party (MDP) Mohamed Nasheed told Reuters that the new government will take a tough stance against China.

Lashing out at the Free Trade Agreement (FTA) with China entered into by the previous regime led by Abdulla Yameen, Nasheed said that it will be canceled.

“The trade imbalance between China and the Maldives is so huge that nobody would think of an FTA between such parties. China is not buying anything from us. It is a one-way treaty,” Nasheed said, adding that parliament will not pass laws required for the zero tariffs agreement to come into force.

The Reality

However, going by what happened after a similar regime change in Sri Lanka and Nepal, and the statements of the new leaders in the Maldives, a radical anti-China swing is unlikely.

Experience in South Asia, shows that parties which came to power playing the anti-China card tended to crawl back to China after a period of investigations into the terms of the Chinese contracts and loans.

In Sri Lanka’s case, the re-negotiated deal with China on the US$ 1.2 billion Hambantota harbor signed by the “anti- China” Wickremesinghe government, was vastly more favorable to China than the previous one negotiated by a supposedly “pro-China” Rajapaksa government.

China got Hambantota port on a 99 year lease and with a 70% stake in it, while Rajapaksa had offered only a 35 year lease in his time.

The US$ 1.4 billion Colombo Port City project, was heavily criticized during the 2015 Presidential and parliamentary elections as a White Elephant and as an environmental threat and was stalled for 16 months. But eventually, it was resumed with some modifications which were not really unfavorable to China.

The city area was extended from the initial 233 hectares to 269 hectares, and the land given to China was converted from freehold to a 99 year lease. The revised agreement gave China a greater role in the city’s development but in partnership with others.

In the Maldives, the 2 km long bridge between capital Male and the island of Huluhumale was highly criticized by the then opposition as an unwarranted investment .But it is proving to be a boon for overcrowded Male. Connected by the bridge, Hulhumale provides Male much needed lebensraum. The all-weather bridge is helping Huluhumale develop as a satellite town relieving pressure on Male.

The Solih government is proceeding cautiously. Foreign Minister Abdulla Shahid said: “The FTA has been already signed. So the government can only say anything after finding out all the details. If we say anything without finding out all the details it can harm relations between the two countries. So first, we must find out all the details before commenting."

"We need to find out details of the loans and free aid given to us by China. We need to find out the weight of the loans and reshape the loan agreements in a way that we can carry them," Shahid said.

According to customs statistics, the Maldives imported US$342 million worth of goods from China between January and August this year. Exports amounted to US$265,270 during the same period. This is by no means a “yawning” trade gap, Nasheed was complaining about.

In fact ,the trade gap with his friend India is yawning. Maldives imported $194 million worth of goods from India, its traditional partner, during the same period, while exporting $1.8 million of products.

With the MCFTA offering zero duty to fish exports, Maldives will be able to greatly expand fish exports to China. At present Maldivian fish exports overall are valued at US$ 121.5 million.

Nasheed May Not Be Decisive Factor

Nasheed, who is an incurable radical, may not have the influence on the Solih government as many people imagine.

Nasheed is a born agitator and is best in opposition, as his conduct as President between 2008 and 2012 showed.

President Solih and Foreign Minister Shahid are a different kettle of fish altogether. They are sober, practical and integrationist rather impulsive, idealistic and divisive.

“China has offered the most development assistance to the Maldives," Solih reportedly told the Chinese Minister of Tourism who represented Xi Jinping at the inauguration. He mentioned various projects like the friendship bridge which have brought tangible benefits to the Maldives.

China Unfazed

Unfazed by the regime change, China has said it has a "firm and clear cut will" to maintain good ties with the Maldives. It pointed out that during his meeting with the Chinese Tourism Minister, Luo Shugang, on November 17, President Solih had praised China.

The Chinese state-run Global Times daily said in an op-ed article recently, that "Solih is viewed as pro-India by the Indian and Western media. However, pro-India does not necessarily mean anti-China.”

“Due to close geographic distance, it is normal for India to have such a large influence on small Indian Ocean countries. China's cooperation with these countries was never meant to replace India's influence," the article said.

"India and China should support these small countries in adopting a stable foreign policy and protecting foreign investment. The two nations can also carry out mutual third-party cooperation to seek a win-win scenario and stabilize the entire region," the Chinese official daily said.

"Undoubtedly, China has its own stakes in the Indian Ocean as it is an important gateway for China's opening-up. But China's cooperation with Indian Ocean countries is not to squeeze out any other country," it said.

China is the biggest investor in the Maldives. Chinese investments account for US$ 2.37 billion in a total FDI of US$ 3.22 billion.

It is perhaps this US$ 3.22 billion which is interpreted as Maldives told debt to China, without considering the loan, interest and grant component of it.

India’s exports to the Maldives are just a wee bit lower than China’s. In 2016, Indian exports to the Maldives were valued at US$ 275,665, 477, while China’s were valued at US$ 285, 640, 637. But this similarity is ignored in the writings of commentators.

Writing in Global Times, Long Xingchun, Director of the Center for Indian Studies at China West Normal University and a Senior Research Fellow with The Charhar Institute said: “The Maldives may lend priority to India in its foreign relations, but it won't constrain itself to India.”

“The building of infrastructure by China in the Maldives has created favorable conditions for the business and personnel of Indian companies on the island country. China and India can actually help boost Maldives' development by using their own strengths.”

Two Plus One Formula

China has come up with a constructive "two-plus-one" mechanism, namely, China and India plus another South Asian country, as a demonstration of sincerity.

“This aims to harmonize relations between countries and serves the interest of all relevant parties, and is worth a careful consideration by New Delhi. Perhaps the two powers can have a try in the Maldives first,” Long Xingchun wrote.

(Cover Photo: Chinese Special Envoy and tourism Minister Luo Shugang with Maldivian President Ibrahim Mohamed Solih)