AGREEING TO visiting Maldives President Ibrahim Mohamed Solih’s request for financial aid, Prime Minister Narendra Modi on Monday announced $1.4 billion financial assistance to the island nation in a bid to bail out its debt-trapped economy.
This comes in the wake of Chinese loans for projects which already account for about 70 per cent of Maldives’ national debt. Delhi’s economic help is key to India’s strategic interests, as it will work towards weaning off Male from Beijing’s “debt-for-leverage” model of diplomacy.
“India will always stand by you in your government’s ambitious efforts to change the lives of the Maldivian people. For the social and economic development of Maldives, India will extend budget support, currency swap and lines of credit worth $1.4 billion,” Modi said. He said there are “infinite possibilities” for expanding ties between the two neighbours.
China’s infrastructure development in Maldives included a bridge linking Male and the airport, and construction of housing units. While the new government under Solih is still trying to figure out the “dire economic situation”, the Chinese debt is estimated to be between $1.5 to 3 billion.
Recalling his government’s ‘Neighbourhood-First’ policy, Modi reiterated India’s assurance of all possible support to Maldives in realising its aspirations for socio-economic development, and strengthening of democratic and independent institutions, a joint statement said.
“We held successful talks in a cordial atmosphere. We vowed to strengthen ties,” Modi said, after the talks. Solih reaffirmed his government’s “India-First Policy”, and commitment to working closely with India, the statement said. “He appreciated the generous assistance provided by the Government of India to Maldives, and identified various areas for developmental cooperation, including private sector involvement in development of housing and infrastructure, water and sewerage systems in the outlying islands, healthcare, education and tourism,” it said.
Mindful of Chinese assertiveness in the region, both leaders agreed on the importance of maintaining peace and security in the Indian Ocean Region.
“In furtherance of the shared recognition that the security interests of both the countries are interlinked in the region, they reiterated their assurance of being mindful of each other’s concerns and aspirations for the stability of the region and not allowing their respective territories to be used for any activity inimical to the other,” said the statement. The two leaders agreed to strengthen cooperation to enhance maritime security in the Indian Ocean Region through “coordinated patrolling and aerial surveillance, exchange of information and capacity building”, it said.
This is aimed at assuaging the concerns stemming out of China’s assertive activities in the Indian Ocean Region, as three Chinese naval ships had docked in Male in August last year.
The two leaders reaffirmed their “unwavering commitment and support” for increased cooperation in combating terrorism, both within the region and elsewhere. This is important since Maldives has faced rising Islamic fundamentalism in the last few years, and is said to have supplied anywhere between 50 to 200 fighters to the Islamic State.
“Both sides agreed to enhance bilateral cooperation on issues of common concern, including piracy, terrorism, organised crime, drugs and human trafficking. It was also agreed to intensify cooperation in the areas of training and capacity building of Maldives Police Service and Maldives National Defence Force,” said the statement.
The two countries inked four pacts, including one on visa facilitation. According to the statement, both sides agreed to work together to create institutional linkages and to establish a framework of cooperation in areas of health, mutual legal assistance on criminal matters, investment promotion and tourism.
The Maldivian President also reiterated his country’s support for India’s candidature for permanent membership of an expanded and reformed UN Security Council. Maldives reiterated support for India’s candidature for non-permanent seat for 2020-21.
In his statement, Modi complimented Maldives’ decision to re-join the Commonwealth and also welcomed it to the Indian Ocean Rim Association (IORA) family.
Solih’s visit within a month of taking charge is seen as an effort by his government to repair ties with India, which came under strain during the presidentship of Abdulla Yameen, who was known to be close to China.