The Maldives Crisis: What Is At Stake For China And India?

The island nation of Maldives in the Indian Ocean has been in a state of emergency since 5 February. Trouble began on 1 February, when the Supreme Court quashed the conviction of former President Mohamed Nasheed and ordered reinstatement of 12 lawmakers who had been stripped off their seats. President Abdulla Yameen rejected the decision and declared a 15 day emergency, arresting two Supreme Court judges as well as his half-brother and former President Maumoon Abdul Gayoom.

Restoring the seats of the 12 MPs who had defected to the opposition and reversing the criminal conviction of former President Nasheed would effectively reduce Yameen’s party to a minority. Nasheed was confident to win hands down in the Presidential elections to be held this year. President Yameen feared he will be defeated by a strong opposition campaign targeting him on issues of corruption, illegal sale of natural resources and on his controversial deals with China.

While “democracies” such as the U.S, India, and U.K have rallied against the Yameen government, calling for a roll back on the state of emergency imposed on the island, China, while being a “non-democratic” entity, with strategic interests in the Indian Ocean archipelago, is keenly watching the developments in Maldives. China is both affected by and is in an indirect way, influencing the actions of President Yameen.

What is China’s position on this issue? How are Sino-Maldives relations shaping Yameen’s response to domestic and international demands to restore democracy? What is the impact of the ongoing crisis and China’s influence on India-Maldives relations? What actions does India propose to restore normalcy and make permanent India’s strategic interests in the Maldives? These questions will be addressed in the article.

China’s shifting posture on the Maldivian crisis:

Since 5 February, subtle yet significant shifts can be observed in China’s position on the situation in Maldives. When the emergency first broke out, China (implicitly) supported Yameen by urging “all relevant parties in Maldives” to resolve differences “through dialogue and negotiation”. Chinese Foreign Ministry spokesman Geng Shuang, told reporters last Wednesday that “the international community shall play a constructive role on the basis of respecting the sovereignty of the Maldives, instead of further complicating the situation”, thus reiterating the Chinese government’s indirect yet firm support for the Maldives’ current leadership and warning other countries like India against getting involved.

China also played a role in rejecting United Nations’ intervention in Maldives and was part of the team of “closest friends” consisting of Russia and Saudi Arabia who also blocked discussions by the UN Security Council to table the Maldives issue on its official agenda. China has instead offered to mediate between the feuding parties in the archipelago. This is a marked shift from the stance China first maintained on letting the parties resolve differences among themselves. It has now donned the mantle of an active participant and negotiator by expressing its interest to communicate with the opposition in Maldives and other international players such as the United States and India.

A China hand is also assumed to be behind the Maldives government inviting all political parties to reconvene talks and engage in dialogue with the government, last Thursday. According to a source quoted in The Hindu however, the opposition has rejected such an offer and rebuffed that “there can be no negotiating with a dictator like this” (referring to Yameen).

Economic opportunity for Maldives; geostrategic opportunity & risks for China:

Opportunity for Maldives

China and Maldives established diplomatic relations in 1972, but it was only in 2011 that China set up its embassy in Maldives, under the invitation of former President Nasheed. Their relationship took off when the current Yameen government ousted Nasheed and since 2013, has been actively courting China while moving away from India.

For Maldives, the economic imperative is the greatest in its partnership with China as it needed to invest in infrastructure to diversify its $3.6 billion economy, promote connectivity between its islands and broaden the tourism industry which is at the heart of its economic growth. China stepped in, armed with investment and a billion people who could give Maldives’ tourism economy a boost (in 2014, 360,000 Chinese tourists travelled to the Maldives, constituting more than 30 percent of all visitors to the country).

Chinese President Xi Jinping visited the Maldives in September 2014, leading to Yameen’s participation in China’s Maritime Silk Road, an extension of its mega Belt and Road Initiative. Since then, China has increased its economic involvement in Maldives, granting a $373 million loan from its Exim bank to upgrade the Male airport (cancelling Indian company GMR’s contract for building the Male airport), constructing the China-Maldives Friendship Bridge, a $210 million initiative, and building a 7,000-home housing project. The latest deal was a controversial and hurriedly signed FTA with China that will exempt Maldivian imports, mostly fisheries products, from taxes, while Maldives on its part would waive tariffs on its Chinese imports.

Opportunities and risks for China

The Sino-Maldives relationship began on an economic premise but has now taken on geostrategic significance for China. The Indian Ocean has become the new global centre for trade and energy flows, accounting for half the world’s container traffic and 70 per cent of its petroleum shipments. It is today also becoming a potential arena for strategic competition between China, India, and USA.

In its defence white paper released in 2015, China highlighted four “critical security domains”, including the ocean, outer space, cyberspace and nuclear force. With this in mind, the PLA Navy hopes to shift its focus to a combine “offshore waters defense and open seas protection”. This move dovetails perfectly with China’s new focus in the Indian Ocean with the Maritime Silk Road initiative at the heart of Xi Jinping’s grand Belt Road strategy.

Chinese forays in the Indian Ocean, according to Brahma Chellaney, an Indian geostrategist, are part of China’s larger plan to project power in the Middle East, Africa, Europe and aims to challenge America’s long standing influence and take away India’s natural-geographic advantage. Along with the growing influence in the Indian Ocean Rim by ensnaring Sri Lanka in a debt trap of 99 years to the Hambantota Port and a naval base in Djibouti, China has now turned to Maldives that has already leased out several islands to China which could be used for building bases as part of the “string of pearls” strategy to encircle India and reduce its influence.

China’s involvement arises out of safeguarding its economic and strategic interests in Maldives under the Belt Road Initiative that are likely to come under threat if the exiled President Nasheed comes back to power. Nasheed, who had been given a clean chit from the Supreme Court, was to fight the presidential elections this year. He has been rallying against China, accusing it of “land grabbing” in Maldives. In a recent interview, Nasheed said that Maldives was falling into a Chinese debt trap, with more than 70 per cent of foreign debt owed to Beijing. This is similar to the debt trap that other South Asian nations like Pakistan and Sri Lanka have fallen into in recent times. There are growing fears that selling islands (which China could use to build military bases) would be the only option for the government if the external debt reaches a critical level.

From “India First” to “India last”? Maldives changing policy under Yameen and the likely Indian response

India has always considered Maldives as an important player in its strategic backyard and until now, Maldives aligned itself with India’s strategic interests through its “India First” policy. Now, that space is being challenged by President Yameen’s overtures to China that is only too eager to enter the Indian Ocean region, armed with money and infrastructure projects under the Belt Road Initiative. Maldives has already leased an island close to the Male airport, Feydhoo Finolhu, to China for 50 years. This has raised concerns in New Delhi because of Beijing’s “String of Pearls” design aimed at encircling India in the IOR.

With the latest political turmoil in Maldives, a President who has willingly moved away from India’s orbit into China’s, a belligerent China eating away India’s strategic space, and former President Nasheed making a public plea to India to intervene militarily, the stakes for India’s intervention, either militarily or via coercive diplomatic means has become very crucial. India definitely needs a peaceful Indian Ocean region because 97 per cent of India’s trade by volume comes through this region. It is also one of the few major sea lanes that until now were devoid of major competition, unlike the South China Sea.

While many have called for military intervention, which would in this case actually be supported by major Western players who too are growing increasingly wary of Chinese influence, India needs to tread carefully, by not further isolating Yameen and pushing him onto China’s strategic embrace. But India must not shy away from warning Yameen about India’s red line, which at this point in time would be the Chinese setting up a base in Maldives. As of now, the Indian navy has increased its regular patrols of the Indian Ocean and several smaller vessels have been deployed in the military port of Kochi, anchored about two and half hours away from the Maldivian capital of Male. India is also pursuing diplomatic options working with its international partners to ask United Nations to send a fact-finding mission to Maldives.

In conclusion, it can be said that the Maldives crisis, just like Doklam, presents challenges but also a strategic opportunity for India to design a strategy that is long lasting and can act as template for firefighting intimidation and influence by China in India’s strategic backyard. India’s successful handling of Doklam already set the precedent that it is willing to stand up for securing its national boundaries and also standing by countries in South Asia against China. A similar victory for India in Maldives will present a definite boost to India’s growing stature in world affairs, while also reassuring smaller countries in the region of secure and a dependable partner in India against an intimidating China.