Liu Zongyi: Maldives has to walk China-India tightrope


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Liu Zongyi: Maldives has to walk China-India tightrope


By Liu Zongyi    Source: Global Times    Published: 2018-11-25

Ibrahim Mohamed Solih was sworn in president of the Maldives on November 17 with Indian Prime Minister Narendra Modi being the highest-ranking foreign leader present. For India, Solih's win is a good opportunity to revive damaged relations with the Maldives. But some Indian media outlets were upbeat that Modi's attendance signaled India had regained influence over the archipelago nation.

Solih is deemed pro-India by Western and Indian media outlets. But he expressed his appreciation of China for its long-term support and assistance when meeting Luo Shugang, a special envoy of Chinese President Xi Jinping and Chinese minister of culture and tourism, one day after his inauguration. Solih also said that the new government is committed to developing relations with China, firmly adheres to the one-China policy and is willing to strengthen high-level exchanges and deepen cooperation under the Belt and Road initiative (BRI) so as to enrich the relationship between the two countries.

Nevertheless, Mohamed Nasheed, a founding member of Maldivian Democratic Party and former president, has a different take. He has just ended his exile abroad and was appointed the president's adviser. He said the new Maldivian government will withdraw from the Free Trade Agreement (FTA) with China and Chinese investment in the Maldives will be reviewed.

The Maldives relies heavily on imports. Tourism is the mainstay of its economy. The backwardness of infrastructure holds back the country's development. In recent years, aiming at the lack of development and the urgent needs of people, many large-scale cooperation projects between China and the Maldives have come up. For instance, the construction of infrastructure such as ports and bridges under the BRI has promoted the development of the Maldivian shipping and tourism sectors.

Considering the quality commodities made in China that are also reasonably priced, the China-Maldives FTA will not only reduce the cost of supplies for Maldivians, but also help consolidate the Maldivian tourism business in China. More than 300,000 Chinese per year have travelled to the Maldives in recent years; and for seven years in a row, China is the Maldives' largest source country for tourism. In addition, after the China-Maldives FTA takes effect, the tariff on most aquatic products imported from the Maldives will be immediately reduced to zero, which will provide an impetus to the development of the fishing industry in the archipelago.

Even if Solih has a special liking for some other nations, it is necessary for him to put national and regime security, development and economic growth at the top of his priority list. China has already made massive investment in the Maldives, which has promoted social and economic development in the Indian Ocean nation. Therefore, for the sake of getting more benefits, Solih is definitely unwilling to curtail economic cooperation with China, even hoping for more of it.

Meanwhile, Solih may intend to obtain more benefits from India especially when New Delhi is vigilant about the cooperation between China and the Maldives. On the one hand, Solih would satisfy some of India's geopolitical requirements to ensure the security of his regime. On the other, he could obtain more economic assistance from India. When meeting with Modi, Solih said the Maldivian economy is facing a crisis due to "reckless mega development projects undertaken purely for political gains," which is widely considered to indicate cooperative projects with China. He also highlighted the pressing need for increased housing and infrastructure development as well as for establishing water and sewerage systems in the outlying islands, expecting India to provide assistance. As a response, Modi expressed his willingness to help the Maldives in "every possible way." Whether India can meet the Maldives' needs depends on the former's national strength.

In fact, China didn't increase its investment in South Asia until recent years. The debts of South Asian countries are the result of years of accumulation and most of it can be attributed to Western countries and West-led international organizations. Nasheed made the irresponsible remarks perhaps because he hoped to court India and pressure China. But given Solih's political standpoint, the new Maldives government is likely to maneuver among countries like China, India, the US and Japan to maximize benefits.

Five years since the BRI was proposed, there have been instances of projects facing hurdles or even being put on hold. Especially as geopolitical competition intensifies in the region covered by the BRI, small countries that don't want to fall victim to the rivalry may choose to maintain neutrality or lean on certain powers.

China hopes that the BRI doesn't trigger geopolitical competition. In their unofficial meeting in Wuhan in April, Xi made an agreement with Modi to promote "China-India Plus" cooperation in South Asia and the Indian Ocean, showing Beijing's respect for New Delhi's standing. Now, China and India have jointly begun training Afghan diplomats. It is hoped that this cooperation model can be promoted among all countries in South Asia and the Indian Ocean, including the Maldives.

The BRI has been widely welcomed among developing countries where serious shortage in infrastructure investment has obstructed development. China is happy to see the US, Japan, Australia and India propose an alternative model to the BRI and the US pledge to invest heavily in the Indo-Pacific region to enhance connectivity. These efforts, if fulfilled, will help countries in the region achieve prosperity and benefit all. Hope the US, Japan, Australia and India will honor their commitment.

The author is a visiting fellow of the Chongyang Institute for Financial Studies at Renmin University of China.