After a tumultuous election, Ibrahim Mohamed Solih was sworn in on Saturday as President of the Maldives. In a surprising victory over Abdulla Yameen, more is set to change in the Maldives than just their head of state. As Beijing and Delhi struggle for regional dominance, the Maldives has become another battleground in the region.
While the Maldives traditionally had close political and economic ties to India, Abdulla Yameen attempted to bring the country much closer to China. Yameen readily accepted Chinese money and loans for ambitious infrastructure projects, which required hiring Chinese state firms. The new administration plans to immediately begin an forensic audit of the deals signed by the Yameen government, with high suspicions of embezzlement and corruption across different levels of government. Some of the infrastructure projects included a mile-long sea bridge connection the capital to the airport, expanding the airport, and constructing large housing projects. While Solih’s transition team has been informed that the Maldives owes $1.5 billion to Chinese lenders, there are fears that the real amount could be much higher. Even the $1.5 billion represents a quarter of the Maldives’ GDP, leaving the country in dire financial straits. Solih has described the financial situation as “a colossal blow” suffered due to reckless development project. Solih has publicly expressed his desire to renew ties with India and fortunately for the Maldives Prime Minister Modi has been more than receptive. He was the highest ranking foreign attendant at the swearing-in ceremony on Saturday.
India long feared that the Chinese investment in the Maldives would eventually lead to an increased Chinese presence on the islands, even potentially a military outpost. As China’s Belt and Road Initiative spreads, many countries are becoming more and more aware of the risks of accepting Chinese money, and a few countries such as India have grown increasingly aware of the geostrategic advantages China seeks to gain. Sri Lanka’s experience provides the starkest warning, and India will seek to prevent anything similar from occurring in the Maldives as well.
Prime Minister Modi and President Solih have spoken at length together about a range of bilateral issues and both wish to strengthen relations that had been damaged by the previous administration. Solih briefed Modi on the Maldives fragile economic situation, and Modi discussed potential ways to continue their development partnership, including ways to help the Maldives pay off their loans to China.
One way that Modi believes India can help their island neighbor is by facilitating easier visa procedures. The Maldives is most well known for its beautiful beaches, and thus tourism plays a large role in its economy. Modi has invited Solih to make an official state visit to India as soon as he can, where they plan to continue working together to address the issues the Maldives face, as well as issues found within the broader region. Besides economic connections (such as increased Indian private investment), the two leaders also discussed the need for increased commitment and support in the fight against terrorism.
While the Maldives may only contain 400,000 people, the return of a pro-India leader will be seen as a victory for India in its struggle with China for influence in the region. India has long made it clear that it seeks to move against the Chinese Belt and Road Initiative, fearing potential encirclement as Chinese investment spreads. As India and the Maldives renew their ties, India will hope to demonstrate to other South Asian countries that India is a better alternative to Chinese investment.