As India ascends the regional and global order, its growing aspirations and indigenous capabilities are further intensifying competition with China. In spite of its dependence on economic relations with China, the South Asian giant continues to see its East Asian neighbour as one of the biggest potential threats to its sovereignty and interests. This fear (or paranoia) extends to the maritime domain and has been significantly accentuated by the ‘String of Pearls’ theory. While I have questioned the viability of this theory elsewhere, China’s economic expansionist modus operandi has to be acknowledged.
The debt trap
China has been investing in various developing countries as part of its ‘One Belt, One Road’ initiative, and has loaned large sums of money to these countries for infrastructural and economic development. Due to the size of these loans and various domestic factors, many countries have been unable to pay them back and have ended up settling the debt in the form of equity, as in the case of the Sri-Lankan port Hambantota. With regard to the Maldives, it is believed that, under the administration of former President Adbulla Yameen, loans from China amounted to more than $1.5 billion, a quarter of the island country’s GDP. It is largely held that Yameen practically ‘sold the country’ to the Chinese, which has increasingly compromised the state’s control of its infrastructure and sovereignty.
Under the newly elected President, Ibrahim Mohamed Solih, the Maldives is staunchly looking to turn over a new leaf and move away from the detrimental path the previous administration set it on. Solih’s ‘India First’ policy is one such pivotal shift in the geopolitical narrative. This policy entails stronger relations with India in the culture, security and economic sectors, and is being touted as Solih’s principal instrument for reeling back Chinese influence and control. In return for stronger security ties, India has offered a $1 billion, low-interest loan, to be repaid in several instalments; this may include the permanent deployment of Indian military personnel in the island state.
What should India expect?
India cannot expect this to be a zero-sum game. Despite being the benefactor of the Maldives, it should be cognizant of the fact that the Maldives cannot simply undo its economic and political ties with China. Even though the Maldives’ new government has announced its intention to pull out of the free trade agreement with China, changes that would alter the scenario wholly in favour of India are an impractical expectation. In light of the India First policy, the South Asian country needs to find the next frontier of cooperation following its $1 billion bailout, focused on the bilateral benefit of these two states and free of any direct influence from China. Issues pertaining to China will persist, but India needs to rise above reactionary responses to these, especially in its backyard, and take charge of relations for its own and its partnering states’ interests. Its role in the Maldives and the Indian Ocean Region (IOR) must evolve from being a reactionary benefactor to a holistic one. The goal for both these countries is to reach a point where the presence of and dependence on Chinese money is no longer a principal security concern. The road to achieving this is long and uncharted, but the bailout from India is a jump-start that has set the wheels in motion.
Strong democratic waves within the Maldives could prove trying if India fails to provide the same economic benefits to Maldivians that the Chinese have.
The change in the political climate in the Maldives is fortunate for India but the presidency of Yameen must serve as a lesson for Indian policy makers. Unlike China, India has failed to capture the confidence of other political parties in the Maldives. China has repeatedly undertaken a two-pronged approach in its interaction with the island country: official state visits and political party delegations. This enables Chinese influence across the political spectrum, reducing the dependency on a single political party or leader. India’s friendship with President Solih has been welcomed, but strong democratic waves within the Maldives could prove trying if India fails to provide the same economic benefits to Maldivians that the Chinese have over the last decade. It has also been noted that, as tourism is the second highest source of income for the Maldives, the continuous influx of Chinese tourists helped during the challenging times ensuing from the 2008 recession. Many among the Maldivian populace are grateful to the Chinese for this.
The Maldives is going to confront a series of issues in the near future. From rising sea levels to tumultuous economic times, Solih’s government is bound to face difficult decisions. India’s approach in such times needs to ease these growing difficulties and facilitate growth in the sustainability sector.
Climate change has been the principal issue for the Maldivian government, regardless of who has been in power. But the policies around the rapidly rising sea levels are worrying. President Yameen pursued a land reclamation policy, whereby foreigners were allowed to buy land with an investment of a minimum of $1 billion if they demonstrated that 70% of their project site would be made up of land reclaimed from the sea. This raised serious concerns as a cash-rich state like China, increasingly pursuing economic expansionism, could easily exploit the policy to gain land control within island states, thereby compromising sovereignty and the security of the region in the eyes of policy makers in New Delhi. Solih’s India First policy notwithstanding, Male cannot escape the two realities that plague the administration: the Maldives is at risk of being submerged under the sea due to rising sea levels, and the Chinese have the money to help mitigate imminent disaster.
Furthermore, with regard to India’s security concerns, it is imperative that Chinese investment in the Maldives’ maritime infrastructure is analysed in a structured and logical manner. The focus of the analysis should be whether these ports are economically viable without non-economic purposes to serve. Working in an atmosphere of major security concerns can undermine the sensibility required to act prudently. In this scenario, if a port is obtained by the Chinese but cannot facilitate military presence or activity, it reinforces the dilemma India faces of whether China has some covert and fundamental anti-India agenda behind such activities. The Maldives does present a strategic advantage to any state wishing to monitor Indian and US activity in the region, and in lieu of its recent push to project its power towards the IOR, a non-economic multipurpose port in Maldives falls within the ambit of Chinese strategic interest. But to build, furnish and facilitate this capability, the Chinese face an uphill struggle against an increasingly concerned and circumspect Male.