In a significant development, the Maldivian government has announced an (early) visit of President Mohamed Muizzu to India. Coming as it does alongside other noticeable developments in political matters and also defence/security cooperation, indications are that India’s patience and pregnant silence have paid off at the long last in putting the clock back on bilateral ties to a period prior to the recent strains, coinciding with Muizzu’s ascendancy in politics and the presidency.
‘The President is scheduled to visit India very soon. Discussions are ongoing between the Maldives and India for the best date,’ Heena Waleed told newsmen at the President’s Office in the capital, Male. Dates and other details, including participants in the Maldivian delegation, are yet to be finalised. Customarily, bilateral visits are announced simultaneously in the two capitals. By announcing Muizzu’s Delhi visit without waiting for diplomatic formalities of the kind, the Maldivian side especially seems to have underlined its keenness in the matter.
With this, in a way, the Maldivian camp might have put the ball in the Indian court, for taking forward Muizzu’s intention to visit and also the desire to mend fences early on. It also highlights even more the urgency with which the Muizzu leadership is approaching the economic crisis that is threatening to engulf the nation, like in the common Sri Lankan neighbour two years ago, and the expectations in terms of early Indian assistance and an interim bailout package, especially in terms of ‘budgetary support’.
Indications are that New Delhi would wait and watch for further signals from Male on the outcomes of bilateral exchanges during External Affairs Minister (EAM) S Jaishankar’s Maldives visit last month, when he met President Muizzu, held discussions with Foreign Minister Moosa Zameer, and also talks with Defence Minister Ghassan Maumoon and Finance Minister Mohamed Shafeeq.
In context, the question arises if the ‘premature’ Maldivian announcement on the President’s undated Delhi visit was just a public expression of desire or was (also) a message to New Delhi on the Muizzu’s limitations and/or reservations, indicating a thus-far-and-no-more approach.
As may be noted, the proposed visit as and when it takes place will be the second for President Muizzu, after he had participated in Prime Minister Narendra Modi’s third successive swearing-in on 9 June, followed by Indian External Affairs Minister S Jaishankar’s ‘return visit’ to Male to take forward bilateral ties that had gotten stuck, owing to certain decisions and public utterances of President Muizzu, more than anyone else in the Maldivian system. The unilateral announcement on his Delhi visit now thus seems to indicate a desire for the Maldivian side, especially to put the clock back.
Symbolic, but…
It is not as if nothing has moved on the Maldivian side after Jaishankar’s visit—or, so it seems. Bilateral tensions and strains were eminently noticeable on both the political and security fronts. Damage control from the Maldivian side, even if delayed and possibly deliberated upon internally, too, has covered the two sides. Though symbolic still, the sudden resignation of two of three ‘anti-India’ junior ministers, eight months after their insulting and indiscreet public behaviour, is decisive and conclusive. It puts an end to a past irritant, as far as the present goes.
The same cannot be said about security-related reversals, but a beginning has been made, it would seem. Breaking the ice was a delegation of the Maldivian National Defence Force (MNDF) under Chief of Defence Staff, Maj-Gen Ibrahim Hilmy, which visited New Delhi earlier this month for discussions on ‘forging stronger maritime security partnerships and cooperation’ under India’s ‘SAGAR’ and other initiatives, involving the Indian Navy, Coast Guard, and other arms and agencies of the Indian security establishment. Around the time, a delegation of India’s National Defence College (NDC) undertook a ‘study tour’ of the Maldives when they had ‘productive engagements with various ministries and institutions’.
These are all significant indicators of the thawing of relations that had nose-dived to unprecedented levels after Muizzu took over in November last year. However, the scars are definitely going to take time to heal first and erase, and any provocative action in between can only end up reopening the old wounds, big or small. How the two sides navigate the restoration part of bilateral ties together and how and how much the Muizzu leadership is able to and/or willing to do the doable will be keenly watched.
In this context, the removal of the two junior ministers has to be viewed as a positive development, even if delayed. There are no marks for guessing that the resignations of Mariyam Shiuna and Malsha Shareef, known to be confidantes of Muizzu from his earlier stint as Male City Mayor, were under instructions and not necessarily voluntary. The fate and future of the third suspended minister, Mahzoom Majid, are not known.
Looking back, the ministerial posts against India and PM Modi were a takeoff from where Muizzu had left with his ‘India Out/India Military Out’ call from his successful presidential poll campaign, which culminated in his assuming the elected office in November last year. The call was a reiteration of the call by his estranged political mentor and jailed former President Abdulla Yameen, whose conservative electoral constituency he coveted, after the rejection of the latter’s nomination for the presidential poll last year.
Under perceived pressure from his conservative constituency base, President Muizzu insisted on New Delhi withdrawing military pilots and technicians who were operating three India-gifted aerial platforms deployed for medical evacuations and aerial surveillance under the command and control of the Maldives National Defence Force (MNDF). Even as acrimonious demands filled the outside air, internally, the Maldivian government agreed to retain the aerial platforms, replacing the Indian military personnel with civilian pilots and technicians.
Take-off from Dosti
If that signalled positivity for the first time after Muizzu came to power, the two nations have also revived security cooperation in more ways than one. Not long after Jaishankar’s visit, the Maldives returned to the multilateral regional initiative, namely, the Colombo Security Conclave (CSC), after the Muizzu dispensation had stayed away from the previous annual meeting of National Security Advisors (NSA) of member nations in Mauritius.
Given the murky waters in which the India-Maldives relations were in at the time, some Western observers were quick to conclude that the boycott was aimed (also) at New Delhi. However, only days after the Mauritius meeting, the Maldivian government attributed it to a mix-up, caused by a lack of information to the ‘transition team’ from the predecessor government of President Ibrahim Solih. It was indicative of an intention to set the record straight, if not an attempt at retrieving the situation, even if belatedly.
The reasons are not far to seek. On record, the CSC is more than a bilateral affair. However, what made the earlier Maldivian ‘boycott’ intriguing and immediate return interesting is the fact that the very apparatus was a take-off from the bilateral ‘Dosti’ Coast Guard exercises on matters of non-traditional security, put in place after the Indian military intervention to neutralise a mercenary-led coup bid against the government of President Maumoon Abdul Gayoom in 1988.
Debt-servicing
Today, the Maldives’ need for India is more than ever, but mainly in matters of economic aid and cooperation. Maldivian politicians and the population, starting with Team Muizzu, will be keenly watching the September 21 presidential poll in Sri Lanka, where incumbent Ranil Wickremesinghe is contesting as the ‘saviour who stabilised the economy’ and for a mandate to continue with the IMF-centric reforms that have hiked taxes and tariffs and have failed to bring down prices and inflation.
The precariousness of the Maldivian economy, a legacy issue as in Sri Lanka, became clear after international rating agency Moody’s downgraded the Maldives’ credit ranking from CAA1 to CAA2. In August, another agency, Fitch’s Ratings, too, had downgraded Maldivian ranking from ‘CCC+’ to ‘CC’, for near-similar reasons.
The reasons comprise low forex reserves compared to external debt servicing the continuing impact of excess domestic liquidity from the Covid era on the exchange rate peg, among other reasons. As rating agencies and international institutions like the IMF and World Bank have been pointing out, debt servicing will require $600-700 million in 2025 and over a billion dollars in 2026.
The Muizzu dispensation has begun well, at least on paper, by accepting the pitfalls of the economy and constantly expressing a desire to set internal matters right, as much as it has to be and as much as it can be. In the latest and most significant initiative in this regard, the Maldivian Inland Revenue Authority (MIRA) has amended tax regulations on expected lines for dollar-earning individuals and companies, starting with those in the mainstay tourism sector, to pay all their governmental dues in the US currency.
Rufiyaa is the official Maldivian currency, but the American dollar has become the benchmark currency in the country, more than larger economies in the region and possibly elsewhere. The grey market dollar rate is also a sign of the health of the nation’s economy and forex reserves. It is on the climb again, after a slide during the presidential poll last year.
Daggers drawn
Ordering dollar payments to the government by dollar earners in the country is the easiest part. It is also a politically risky affair for President Muizzu, as he may have already mounted the tiger and can only go forward. Any climb-down will signal weakness, and any attempt to move forward will also indicate greater risks ahead.
Already, questions are being asked about the sudden exit of the Solih-appointed European CEO and the three western aides he brought in to run the joint-sector Bank of Maldives Ltd (BML) after the nation’s largest bank was caught in two controversies in as many weeks. The Opposition-backed sections of the media and social media are also seeking the outcome of the police probe into allegations of the ‘MBL-MDP plot’ to topple the government, involving the rival Maldivian Democratic Party, two years ago. The plot theory, it is implied, was aimed at diverting public attention from an impending economic crisis and fiscal mismanagement.
It is no secret that the Maldivian politics, as the nation’s economy, is being controlled by big-time dollar-earners, but there is enough number of ruling combine’s parliamentarians who hold ‘super-majority’ for the President’s People’s National Congress (PNC) party, who too could feel the pinch. Many of them own resorts and/or other businesses that bring in dollars and may feel affected.
With this one decision, Muizzu may have let the cat among the pigeons, though the comparison should end there. Such seemingly innovative policy measures have the potential to retrieve the fiscal, if not overall, economic situation for Muizzu. Even symbolism of the decision will have a positive popular impact, yes, but then it is time Muizzu begins watching (even) his shadow as it is possibly daggers drawn otherwise—and hidden, too.
The options are limited. Either he walks the tough path and faces the music, or he walks the same path as his predecessors, leaving the dollar-centric initiative as a symbolism for the future—maybe a second Muizzu dispensation, if there is one at the end of the next presidential poll in 2028. Until then, it is economic tightrope walking for the nation and a political trapeze for the president, who has to stay afloat and strong to be able to contest and win the presidency for the mandated upper limit of a second, five-year term.
The writer is a Chennai-based Policy Analyst & Political Commentator. Email: sathiyam54@nsathiyamoorthy.com. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.
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