In tourism-dependent Maldives, China not just financier of infrastructure but most frequent flyer

The growing political crisis in the Maldives has raised alarm bells across India with opinion makers pointing that the Maldives knowingly ignored India and chose to cuddle with Pakistan and China, as President Abdulla Yameen announced a 15-day emergency in the country –and that it is yet another proof of China waging a proxy war against India. Though the Maldives government has refuted the charges, opinion makers in India believe the archipelago nation’s anti-India message is loud and clear. And that should worry India. [caption id=“attachment_4347601” align=“alignleft” width=“380”] Fiile image of Maldives president Abdulla Yameen and China’s President Xi Jinping. Reuters[/caption] Among the several reasons thrown open to support ‘China is out to get India’ was the Maldives growing financial dependence on China vis-a-vis its mounting debt — two-third of its debt is Chinese held — the Maldives participation in the Xi Jinping’s One Belt One Road Initiative, infrastructural projects that China is developing in the island nation, and most notably the Free Trade Agreement between the two nations, which gives Chinese goods 24x7x365 open season in the island nation. They even looked at India’s past experiences with China, and in retrospect, Maldives reluctant-to-go President Abdulla Yameen’s pro-China stand since he came to power, to validate these fears. Exiled former Maldives president Ahmed Nasheed even went on to ask for India’s military intervention. He also alleged that the “Chinese infrastructural investments are more of a land grab and that Chinese interests had leased at least 16 islets among the 1,192 scattered coral islands and were building ports and other infrastructure there”. According to some reports, “China is already developing artificial islands in the Maldives, much like in the South China Sea.” Though China has denied these allegations, its involvement in the Maldives has put India in a tight spot. Should it intervene and resolve the crisis using force, like it did in 1988, and risk being involved in a military exercise that could possibly escalate with Chinese forces joining in, or play a bystander and let China have its way in the Indian Ocean Region. Firstpost takes a deeper look at the archipelagic state’s economy to understand just what might be driving its economic decisions and growing affection for China. And the results are indeed startling and go beyond the Maldives becoming just a pawn in the India-China rivalry.

Maldives-China data story Infogram

The recent infrastructural investments aren’t the only thing binding the Maldives and China together. For starters, China provides the maximum number of tourists from a single country to Maldives tourism sector. However, according to International Monetary Fund December 2017 report, the Maldives tourism sector has been seeing moderate returns lately and occupancy rate has been falling. Yameen had recently said that he sees the Chinese investments as means to achieve to help the Maldives overcome its reliance on tourism. Perhaps, the Maldives participation in OBOR is linked to that. However, if India sees it as a reason to worry, its reaction appears to be little delayed. According to The Hindu, the FTA negotiations between China and the Maldives took about three years and were completed in September 2017. The Maldives crisis, if anything, also shows that India was caught napping. Or, perhaps it was so busy fighting Pakistan, well, over everything, that it didn’t see what was coming. Besides, unlike China, which has been pouring millions into the Maldives through the Exim Bank of China, India’s investments have been slow and too little. At present, the Maldives association with China is a way of looking out for its future, but for India, it’s a security risk.