Maldives: Even a tiny state in the Indo Pacific has a big role in China-US competition

The Maldives is well aware that it is of a geostrategic importance to powers seeking to dominate the Indian Ocean and what some term the Indo-Pacific. It has responded well to China’s overtures in the past, but with political pushback against China, and other suitors, not least India and the US, calling on its door, how best should it play its cards?
Small cargo boats docked by Male harbour, Maldives. (iStock)
Small cargo boats docked by Male harbour, Maldives. (iStock)

The naval power strategist Alfred Thayer Mahan is considered one of the most influential strategic thinkers of the 18th and 19th centuries. A former president of the United States Naval War College, he wrote in his celebrated book The Influence of Sea Power upon History, 1660-1793 in 1890 that “whoever rules the waves rules the world”. He also predicted that the Indian Ocean would be the new battleground for the coming centuries.

True to Mahan's prediction, the Indian Ocean has become an arena of contestation for strategic control among the major powers. While China is looking for more certain waters to ensure its trade and strategic presence in the countries located in the Indian Ocean, the US, Japan, Australia and India have aligned to counterbalance China in the region. In that endeavour, to a certain degree, smaller island countries like the Maldives in the Indian Ocean are banking on their location in aligning with them. While the US, Japan and Australia are joining rather late in the race to secure their interests in the Maldives, China and India have shown that their efforts in engaging the Maldives all these years have not come to naught. However, in the present context and despite its best efforts, China is witnessing a boycott due to changing political trends in the Maldives. 

Debt trap narrative

On 11 December, Mohamed Nasheed, speaker of the Maldives Parliament and former president of the Maldives tweeted: “Over the next 14 days, Maldives Treasury must pay over $15m to Chinese banks. These banks have not, thus far, given any concessions for these loans. These repayments represent over 50% of government income over the next 14 days. After Covid, Maldives needs breathing space.”

The former president was referring to a set of loans from Chinese banks for development projects in the Maldives. It is not the first time that Nasheed has made such open remarks through social media accusing Chinese banks of not providing any relief in the repayment of the loans considering that the Maldives tourism industry is facing severe challenges due to the Covid-19. Within minutes, the tweet caught the global media's attention, especially India, and the issue was soon blown out of proportion.

The political sphere in the Maldives largely remains divided on the presence of China in the country.

An indoor fresh fruits and vegetables market in Male, capital of the Maldives. (iStock)
An indoor fresh fruits and vegetable market in Male, capital of the Maldives. (iStock)

China’s ambassador to the Maldives, Zhang Lizhong, responded the very next day with this tweet: “Did some homework. For 2020, the payment due stated as $1719,535 is √ .” He went on to correct Nasheed about a loan worth $2,375,000 ($2.3 million) for the Hulhumale Phase II construction of 1530 housing units — the amount was owed to a bank in a third country, and not Chinese banks. It needs to be noted that at present, the Maldives owes approximately US $7,236,003 (US$7.2 million) to the Chinese banks by December as per the data provided by the Chinese ambassador in his tweet.

However, after crying foul publicly, Nasheed settled the spat with this plea on Twitter: “Thank you for your concern, Excellency @AmbassadorZhang. We value our relationship with China. Let’s not wait until the 11th hour; let’s be done with this debt problem. The Maldives needs a further 2-year grace period, or we will never be able to repay these loans.” Ambassador Zhang has an active social media presence, and he has made similar diplomatic moves in the past, including responding to Nasheed on Twitter. 

Debating China politically 

The political sphere in the Maldives largely remains divided on the presence of China in the country. Nasheed has been an open critic of China while President Ibrahim Mohamed Solih has followed Nasheed’s narrative against China. Nasheed has not only accused China of a land grab in the Maldives, but he has also sought the support of the regional and global powers in balancing against Chinese influence in the Maldives since 2018. Twitter users in the Maldives responding to Nasheed’s post seem to be divided. Some asked him to resolve the debt matter internally as China has been a long-time development partner of the island nation. 

A man wearing a face mask transports wooden furniture on his bicycle along a street on the outskirts of Colombo, Sri Lanka, on 13 November 2020. (Lakruwan Wanniarachchi/AFP)
A man wearing a face mask transports wooden furniture on his bicycle along a street on the outskirts of Colombo, Sri Lanka, on 13 November 2020. (Lakruwan Wanniarachchi/AFP)

It was during the previous administration in 2011 that China opened a permanent embassy in the capital city Male. However, bonhomie soon turned to friction after Nasheed was ousted and arrested in an alleged coup d'état by the loyalists of former President Abdulla Yameen in 2012. Nasheed managed to escape to neighbouring Sri Lanka and further sought asylum in London. It was then that he began to criticise China for siding with the majoritarian President Abdulla Yameen. Nasheed returned to the Maldives after his close aide Abdul Solih made a remarkable victory in the 2018 presidential elections. Since his arrest in 2012, Nasheed has used his political prisoner's image in seeking support from the human rights groups and international organisations to assert his political position in the Maldives. In 2018, Nasheed even asked India for political and military intervention fearing that President Abdulla Yameen might use unfair means to win elections.   

The Quad and the Indo-Pacific strategy 

In the last five years, the Maldives has become a geostrategic battleground for the US, India and China. A small island country located in the middle of Indian Ocean became more strategic after the Quad alliance led by the US, Japan, India and Australia joined together for the stated aims of ensuring a stable, inclusive, free and open Indo-Pacific region. The present administration in the Maldives has responded positively to the joint call made by the Quad against China.

In October 2020, Secretary of State Mike Pompeo paid a visit to the Maldives to seek the island nation’s full support of the Quad’s Indo-Pacific strategy which is seen as a counter-strategy against the rising global influence of China, especially in the maritime domain. During the second ministerial-level meeting of the Quad in Tokyo this October, Mike Pompeo made a direct reference to China: “As partners in the Quad, it is more critical now than ever that we collaborate to protect our people and partners from the Chinese Communist Party’s exploitation, corruption, and coercion. We’ve seen it in the south, in the East China Sea, the Mekong, the Himalayas, the Taiwan Straits. These are just a few examples.” 

The Chinese embassy condemned the statement, saying, “During his trip, Pompeo has tirelessly spread political rumours on China and instigated China-Maldives relationship. Unilateralism and hegemony pursued by the US. is indeed a threat to peaceful and stable international relations.” 

The US’s long-haul strategy in the Maldives has become clearer after Pompeo announced that an embassy will be opened in the Maldives soon.

US Secretary of State Mike Pompeo walks to board an aircraft to leave for Maldives, in Colombo, Sri Lanka, 28 October 2020. (Eranga Jayawardena/Pool via Reuters)
US Secretary of State Mike Pompeo walks to board an aircraft to leave for Maldives, in Colombo, Sri Lanka, 28 October 2020. (Eranga Jayawardena/Pool via Reuters)

Further referring to the Quad, the statement read: “The ‘Quad’ or the so-called Indo-Pacific strategy aims at stirring up a confrontation among different groups and blocs and to stoke geopolitical competition, which violates the spirit of mutual benefits featuring win-win outcomes and undermines the prospect of regional peace and development. The 21st Century is an era of globalisation. The interests of all countries are inextricably intertwined. Organising closed and exclusive cliques stand completely against the trend of the times and common interests of the international community and will turn out to be a dead-end.” 

The US’s long-haul strategy in the Maldives has become clearer after Pompeo announced that an embassy will be opened in the Maldives soon. Thus far, diplomatic relations have been conducted through the US embassy in Sri Lanka that is concurrently accredited to the Maldives. Mike Pompeo had also travelled to India, Japan and Australia, where he unveiled the US's intent to engage with the Maldives and Sri Lanka under Indo-Pacific's umbrella more frequently. 

The signing of a security and strategic framework between the US Department of Defence and Maldives Ministry of Defence in September this year was a landmark achievement for the US in keeping a close eye on “peace and security in the Indian Ocean”. Meanwhile, the Quad has increased its joint efforts to assert its presence in the Indo-Pacific region by participating in the first and the second phase of 24th edition of Exercise Malabar in the Bay of Bengal and Northern Arabian Sea in November this year. The exercise witnessed a number of high-risk manoeuvres in the maritime domain involving both sea and sky fighter tactics. In response, China issued a statement questioning the legality of such exercises. However, it remains to be seen if the upcoming Biden administration will carry on the Trump administration policies, especially with regard to the Quad.

... India has a better presence in the Maldives than any of the Quad members. The close maritime proximity between India and the Maldives provides New Delhi with an edge in reaching out to Male in emergency times.

India versus China

Understandably, India has a better presence in the Maldives than any of the Quad members. The close maritime proximity between India and the Maldives provides New Delhi with an edge in reaching out to Male in emergency times.

Presently, dealing with the effects of climate change is one of the Maldives’ most pressing challenges. According to the UN’s Intergovernmental Panel on Climate Change report which suggests that sea levels could rise by as much as 1.1m by 2100, island nations such as the Maldives face a real danger of being submerged. While the country may soon become a hub for climate refugees, its immediate problems have been alleviated by India in times of need. For  instance, in 2014, Maldives pressed the panic button after a fire incident at a major water treatment plant. India swiftly reached out with 1,200 tonnes of bottled water.

A rickshaw driver wearing a face mask transports goods along a street in a market area in New Delhi, India on 19 December 2020. (Jewel Samad/AFP)
A rickshaw driver wearing a face mask transports goods along a street in a market area in New Delhi, India on 19 December 2020. (Jewel Samad/AFP)

Similarly, the recent bonhomie between India and President Solih has resulted in new pacts. In August this year, the Maldives received Indian assistance of $250 million as budget support and $500 million for the Greater Male Connectivity Project. India is involved in a number of infrastructure development projects including the construction of houses, parks, sports grounds etc. India has also been a significant contributor in Maldives’ fight against Covid-19 by supplying medical supplies including paracetamol and Personal Protective Equipment (PPE), and by promising to deliver Covid-19 vaccine once it is rolled out in India. 

...the economic minister of the Maldives was quoted in the Economic Times saying, “The trade links we have established over time will be destroyed if we go ahead with the FTA [with China]. This means we will have nothing to fall back on. Our trade relations with Singapore, Dubai and India will all be in vain..." 

Anti-China narrative

Meanwhile, China’s contributions to Maldives’ infrastructural development are highly visible to the common Maldivians. The China-Maldives Friendship Bridge, a 2km long bridge connecting the capital city Male to the island of Hulhule, was built at a cost of US$184.44 million using a mixed model of aid and loans. The construction was completed in a record two years in 2018. The bridge has enhanced tourism and increased the value of properties in the island Hulhule due to the direct land connectivity. 

A Free Trade Agreement (FTA) was also signed during the state visit of former President Yameen to Beijing in 2017. The agreement had eased import duties for Chinese goods. However, the current administration is looking to scrap the FTA and the economic minister of the Maldives was quoted in the Economic Times saying, “The trade links we have established over time will be destroyed if we go ahead with the FTA. This means we will have nothing to fall back on. Our trade relations with Singapore, Dubai and India will all be in vain. Of course, all businesses will opt for Chinese products if goods are available at lower costs.” Speaker Nasheed has even gone on to draw parallels between Hambantota port in Sri Lanka built by China that has become a symbol of the alleged Chinese debt trap globally. Therefore, an anti-China narrative has been in the limelight since the new Solih-led administration came to power in 2018. 

To conclude, China, India and Japan will play significant roles in the global power centre shift from the US and the West to Asia. Currently, China is looked upon as a trade, strategic and development partner by many of the smaller countries. The ground that China is gaining is apparent from the desperate moves by the US, Australia, and Japan to align with India to strengthen its visibility in Asia. However, the utility of loose alignments will still be determined by other factors such as each countries’ strategic and trade objectives. For instance, India is a Quad member and it has serious border disputes with China, but its bilateral trade with China has still seen a constant rise. Therefore, the strategic cooperation among the Quad members still needs to stand the test of time. Thus, though the Maldives may be at a great disadvantage when it comes to climate change, strategically, it is in the position to bargain for better incentives with any of these countries. If it plays its cards right, the Maldives tourism industry will recover and help to revive its economy affected by Covid-19.

However, the Maldives needs to be rational rather than take an absolute political stance in handling its foreign affairs, especially with regard to China. A balance in its foreign policy orientation is required if it hopes to get an immediate relaxation on its debt terms and a commitment for long-term development cooperation from China. Also, the leadership in the Maldives should keep all its doors open to countries with medical expertise to help fight Covid-19.

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