Not long after a meeting between the delegation from the Maldives and representatives of the Indian government, news broke out on the Nikkei Asian Review that India was prepared to offer the Maldives a loan of $1 billion in return for improved security ties between the two countries, and a permanent military base within the Maldives.
The Maldivian delegation comprised of the Maldivian Ministers of Foreign Affairs; Abdullah Shahid; Economic Development; Fayyaz Ismail; and Finance, Ibrahim Ameer.
The Nikkei Asian Review reported that negotiations are going well and that the “Maldivian Foreign Minister Abdulla Shahid and Indian External Affairs Minister Sushma Swaraj agreed to cooperate on economic and security issues.” It was reported that their meeting was mainly about gaining Indian support for the 2019 budget, which may rise to be as high as 47 billion Maldivian Rufiya (USD$3.04billion), as well as to secure financial aid for development projects.
The loan is to be made available for the purposes of paying off Maldivian debts to China and to finance development projects. This comes in light of the fact that the 2019 Budget, which is currently under review, has an earmarked 2.8 billion Maldivian Rufiya (USD$182 million) for repayment of loans. Although Mr Mohamed Nasheed’s interviews in which he claimed that the true value of external debt to China was around USD$3billion. The actual figure is estimated to be $1.6 billion, as agreed upon by the governor of the Maldivian central bank, Mr Ahmed Naseer, and by the Chinese ambassador to the Maldives, Mr Zhang Lizhou.
In addition, this reason is unprecedented as the Maldives not yet failed to repay any of its foreign loans to China.
Currently, although India does not have a military base in the Maldives; the Indian army has stationed up to 48 military personnel in the Maldives. These military personnel were sent to maintain and train members of the Maldivian military to operate two helicopters which were “gifted” to the Maldives by India after an agreement between the two governments in 2010. Mr Mohamed Nasheed had been the president during the signing of that agreement.
Soon after Mr Ibrahim Mohamed Solih came to power in 2018, the administration has agreed to increase the number of personnel.
President Yameen Abdul Gayyoom had requested that India take back their gifted helicopters, yet India had refused to do so. The Abdul Gayyoom administration proceeded to refuse to renew the visas of the Indian military personnel, yet India took no measures to remove them from the country.
The accommodation and feeding of these Indian military personnel as well as the provision of infrastructure such as hangars are managed by the Maldivian government. As of this writing, no Maldivian military personnel have been trained to use these helicopters. It is not without good reason that many have come to view these helicopters as Trojan horses for the Indian government.
In the last five years, the Maldives received Chinese financial aid without such political and military strings attached. This is one of the main reasons why underdeveloped nations choose to enter into agreements with China. Such strong ties were not appreciated by New Delhi. In fact, these offers come from India in order to diminish the Maldivian ties with Beijing and to monopolize the tiny island nation, opines the Maldivian newspaper Mihaaru.
With the invitation to Indian Prime Minister Narendra Modi; ahead of any other world leader; made within a day of securing his election victory: Mr Solih’s administration has made its priorities very clear. In this new era of the Maldives’ “India-first” foreign policy, it remains to be seen what further compromises the tiny island nation will be forced to make.
Mr Shahid had previously served as foreign minister to the former president Maumoon Abdul Gayyoom, during his thirty year reign, during which the Maldives had also adopted a devoted “India-first” policy. The question of whether Abdul Gayyoom’s “India-first” policy’s was effective in bringing sustainable development to the Maldives is hotly debated.