Maldives tweaks law on foreign freeholds, China likely to edge India on investment

India seems to be losing its influence on Maldives as a major power in the region following the fall of former president Mohammed Nasheed.

Rajeev Sharma July 24, 2015 21:36:29 IST
Maldives tweaks law on foreign freeholds, China likely to edge India on investment

On 22 July the Maldivian parliament People’s Majlis amended the constitution and approved foreign ownership of land in the country with 70 votes in favour and 14 against – a move seen as benefiting China. The hurriedly pushed legislation was opposed by several MPs on the ground that allowing with investment of more than $1 billion of investment could be used by China for its military expansion in this Indian Ocean archipelago, according to a Minivan News report.

The latest development in Maldives is worrying for India and poses a strategic challenge for India. It would inevitably increase Chinese presence in Maldives, a Saarc nation and India’s backyard.

Maldives tweaks law on foreign freeholds China likely to edge India on investment

Maldivian President Abdulla Yameen (L) and Prime Minister Narendra Modi. Image courtesy PIB

The situation in the archipelago is slowly drifting from bad to worse with the Maldivian government ratifying a legislation to allow foreigners with more than $1 billion investment to own land there. Earlier the country’s constitution allowed only 99 year leases. The legislation passed will allow foreigners to own land within a project site on the condition that at least 70 percent of the area is reclaimed from the sea.

The reason why this development is ringing alarm bells in the neighbourhood including India is that this would bestow China with a great opportunity to extend its hold in this part of the globe.

Going by the recent spurt in bilateral visits and diplomatic exchanges between China and Maldives, it is not at all difficult for anyone to guess that China has been more than successful in convincing the island nation to follow its diktats. The legislation passed is seen as an opening that Maldives is offering China welcoming it to influence it in a big way.

This is also seen as Maldives choosing China over India. In this context, it will be relevant to recall that Maldives signed a deal with a Chinese company for its airport upgradation during Chinese President Xi Jinping’s visit last year following cancellation of the deal with GMR Infrastructure of India.

Another tell-tale sign of the growing Maldives-China bonhomie is that Maldives has recently joined China’s two major strategic projects -- the Asian Infrastructure Investment Bank (AIIB) and the Maritime Silk Route, also known as Belt and Road Initiative (BRI). India is wary of the BRI project as it proposes to pass through Pakistan Occupied Kashmir as discussed in an earlier Firstpost piece.

India seems to be losing its influence on Maldives as a major power in the region following the fall of former president Mohammed Nasheed. To compound matters, the Indian prime minister’s tour of Indian Ocean countries did not include Maldives, which was again seen as being a fall out of ill treatment meted out to the pro-Indian Nasheed.

Maldives not being in the South China Sea is a blessing in disguise for China as it now can tighten its grip in the Indian Ocean region through Maldives. Though Maldives has tried to justify to its neighbours and particularly India that it would ensure that the Indian Ocean remains a demilitarized zone, the actions of the Maldivian government are to the contrary.

Though India has not yet officially reacted to this disturbing development emanating from Maldives, New Delhi’s sense is that the development is not in the interest of the region and Maldives.

Maldives has also lately seen a sudden increase in jihadi activities which has a direct involvement of Pakistan. Now, added to this is the pressure of Pakistan’s 'all weather friend' China that experts feel is not something that a small nation like Maldives can handle.

India has long been signalling to Maldives that while it is its prerogative as a nation to befriend anyone, it is in the overall interest of Maldives to maintain friendly and cordial relations with India.

New Delhi would obviously be seething over the acts of the Abdulla Yameen government. It is definitely not a friendly act by Maldives as far as India is concerned.

For several years in the recent past, Maldives has been India’s bug bear. The Majlis move will once again put India-Maldives relations in deep freeze. The latest development underlines the need for India to get its act together and re-boot its Maldives policy. Time is at a premium.

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