Between India, Japan, the US and EU, it should not be difficult to provide an economic counterweight to China in the strategically important Maldives.
Seven years ago, I strolled around Male contemplating the Chinese flags that festooned the tiny, densely populated Maldivian capital, pausing to take a few snaps of the cluster around the Indian embassy. The guest of honour was Wu Bangguo, the second-ranked member of the politburo standing committee, and by far the highest-level Chinese visitor the islands had received. China was still a peripheral presence, but it was visibly growing.
Two years earlier, I had been sitting in the President’s office, chatting with his advisors about the proposals for a Chinese-financed housing complex on Hulhumalé, a reclaimed island connected by a strip of land to the international airport. EXIM bank was set to provide a $74 million loan for a thousand-unit project. For China, it was a pittance. For the Maldives, it was nearly 10 per cent of its annual budget.
By disposition, President Nasheed was far from enthusiastic about Beijing’s newfound interest in the Maldives. His experience at the hands of autocrats at home gave him a jaundiced view of the Chinese Communist Party. During the Copenhagen climate summit, he would take a fair degree of pleasure in tweaking the Chinese as he stood up for binding targets against pressure from Beijing to get in line and pretend that the developing world was united in seeking to punt responsibility for future carbon emissions. He would later describe then-Chinese premier Wen Jiabao as almost shaking with anger during their meeting.
The narrative that emerged from the summit – China as the villain – was significantly shaped by Nasheed’s advisors, who gave blow-by-blow accounts to the press in the days that followed.
The soft power imbalance was almost as dramatic as the hard power gap: the charismatic, democratic leader of a tiny developing country fighting for its very existence against the bullying, authoritarian superpower.
Nevertheless, by 2010 the housing project was moving ahead. Nasheed had been elected on a pledge to provide social housing, and Chinese financing, coming amid a serious downturn in the tourist-driven economy after the global financial crisis, was the least-bad option. The project was billed as the largest civilian housing project in the history of the country and the first commercial project undertaken by the Chinese in the Maldives. Chinese tourist numbers had also begun their stratospheric take-off. While Nasheed’s political sympathies lay with India, China’s growing economic role was an unavoidable fact.
Since Nasheed was forced out by the military in 2012, the picture has been radically different. Under current President Abdulla Yameen, the Maldives is in hock to China, which holds over 70 per cent of the country’s foreign debt. India’s GMR was thrown off the country’s major airport expansion project in favour of the Chinese, who are also building a “friendship bridge” to connect the airport to the capital. There is an even murkier picture when it comes to land purchases. A constitutional amendment was rammed through parliament in 2015, authorising foreign ownership, opening the door to Chinese acquisitions. An equally controversial free-trade agreement with China was also rushed through last December with no opportunity for the opposition to review the terms of the lengthy document.
Deeper economic involvement has brought with it heightened political attention. Xi Jinping himself visited the country in 2014. More controversially, so did three PLA Navy ships last year. Beijing has become virtually the sole lifeline for a president who has managed to alienate virtually all other international support, and most of his domestic backing too. Even the Saudis appear to be fed up with Yameen.
The current debate is about the potential for an Indian military intervention, as the Maldivian opposition has called for. More cautious analysts argue that it should be possible to manoeuvre Yameen out without boots on the ground. Others ask what the implications are for India’s credibility as a security provider in the region if it won’t take action to restore democracy and constitutional order in its tiny southern neighbor.
Nonetheless, most of the strategic community is united in wanting to see Yameen go – in that respect, he is well past his ‘Rajapaksa moment’. China will provide economic support and diplomatic cover, but any PLA military involvement is unimaginable. The hope is still that it will be possible to elect another Maldivian Democratic Party-led government in the coming year.
Yet the case of the Maldives poses equally acute economic questions that long precede the current crisis. Between India, Japan, the United States, the European Union and other democracies, it should not be difficult to provide a collective economic counterweight to China in a small but strategically significant country like the Maldives, where debt traps and land acquisitions have clear security ramifications. Whether they are ready to do so is another matter.
Nasheed has recently been beating the drum about Chinese land grabs and corrupt payments in the Maldives, prompting angry phone calls from Beijing. Yet, sitting in Colombo, where some of the leading Maldivian opposition figures are exiled, he has a first-hand view of the difficulties for the India-friendly Sirisena government in extricating itself from Chinese contracts and financial obligations, and securing economic support elsewhere. While it may be possible for the MDP to pursue more drastic steps to revoke the agreements, a new Maldivian government is liable to find itself in an equally tight spot.
In that respect, the Maldives is likely to emerge as a test case – for India’s strategic economic agenda in its neighborhood; for the Trump administration’s Indo-Pacific strategy, which is supposed to have precisely these cases in its sights; for Japan’s burgeoning infrastructure role in South Asia; and for the EU’s new Asia connectivity strategy. A success story for the democratic powers would begin to change the narrative around China’s Belt and Road initiative in the region.
A failure to find ways to bolster the region’s smallest country would instead validate the counter-narrative that China relies on: that the talk in New Delhi and Washington is not being backed up with resources and that, whether you like China or not, there is no alternative.
Andrew Small is a senior transatlantic fellow at the German Marshall Fund of the United States. He has worked on foreign and economic policy issues in Beijing, Brussels, London, and Washington D.C., where he is now based. He is the author of the book The China-Pakistan Axis.
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