Indo - Seychelles, Mauritius and Maldives Relations

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India, Sri Lanka, Maldives to revive trilateral maritime security dialogue​

India, Sri Lanka and the Maldives will revive their trilateral maritime security cooperation dialogue when National Security Advisor (NSA) Ajit Doval visits Colombo on Friday for the first meeting of the group since 2014.

As part of efforts by the three countries to expand maritime security cooperation in the Indian Ocean, three more countries – Bangladesh, Seychelles and Mauritius – have been invited as observers for the meeting, people in New Delhi and Male familiar with developments said on condition of anonymity.

The revival of the dialogue, which was suspended after India’s relations with the Maldives soured under the previous regime Abdulla Yameen regime, has been on the cards since the Easter Sunday attacks in Sri Lanka in 2019 that were claimed by the Islamic State.

As the Maldives does not have a NSA, the Indian Ocean archipelago will be represented by defence minister Mariya Didi. Sri Lanka will be represented by defence secretary Kamal Gunaratne, at whose invitation Doval is visiting Colombo.

“This is the fourth edition of the trilateral meeting, and the last one was held in 2014. Seychelles, Mauritius and Bangladesh will be present as observers at Sri Lanka’s invitation,” one of the people cited above said.

The level of participation by Seychelles, Mauritius and Bangladesh couldn’t immediately be ascertained.

The meeting will focus on cooperation in maritime security in the Indian Ocean. Doval is also expected to have other bilateral engagements on the margins of the trilateral meeting.

Doval’s two-day visit to Sri Lanka will be his second trip to the island nation this year. He visited Colombo in January, when he held talks with President Gotabaya Rajapaksa on national and maritime security, intelligence-sharing, and regional collaboration.

The meeting is being held against the backdrop of the Chinese People’s Liberation Army Navy’s growing presence in the Indian Ocean and its efforts to step up defence linkages with smaller countries in the region, as well as the India-China border standoff.

The first trilateral maritime security cooperation dialogue was held in Male in 2011. Two more meetings were held in Colombo in 2013 and New Delhi in 2014, and Mauritius and Seychelles were present as observers at the last meet. The dialogue was suspended after relations between India and the Maldives hit a low, largely because of the actions of former president Abdulla Yameen, who was perceived as close to China.

In the past meetings, the three countries had discussed cooperation on issues such as maritime domain awareness, sharing of data on shipping, training, search and rescue, response to oil pollution, piracy and illegal maritime activities.

In September, India provided a Dornier maritime surveillance aircraft to the Maldives National Defence Force (MDNF). The aircraft is expected to boost efforts to keep a closer eye on the movement of Chinese vessels in regional waters. At the time, Indian officials had said the aircraft will also play a role in counter-terrorism efforts, especially after terror attacks at the harbour of Mahibadhoo Island in the central Maldives on April 15.


During Rajapaksa’s visit to India in November last year, India had offered Sri Lanka a line of credit of $50 million to fight terrorism and enhance intelligence gathering in the aftermath of the Easter Sunday suicide attacks by Islamic State-linked terrorists that killed 258 people.
 

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RISING SUN

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Dec 3, 2017
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A tale of two bridges: India and China vying for influence in the Maldives​

(CNN)In the heart of the Indian Ocean, a 2.1-kilometer (1.3-mile) bridge snakes out of an idyllic atoll, linking the Maldives' capital Malé with its international airport.

The China-Maldives Friendship Bridge, built with $200 million largely funded by Beijing, is among a growing list of Chinese projects in the tropical South Asian nation popular for its white sand beaches and turquoise lagoons.
But China's expanding footprint in the Maldives has unsettled neighboring India, which views the region as part of its traditional sphere of influence -- and at risk of being pulled away from its orbit.

In a move widely seen as an attempt to counter growing Chinese influence, India announced in August a $500 million package for its own bridge. Billed "the largest civilian infrastructure project" to be built in the Maldives, the 6.7-kilometer (4.1-mile) bridge and causeway will link Malé with three nearby islands, overshadowing the Chinese bridge in length, scale and price.

Completed in 2018, the China-Maldives Friendship Bridge is the flagship project of China's infrastructure boom in the Maldives.

The infrastructure race is another measure of the escalating geopolitical rivalry between India and China. In recent months, conflicts have flared along their disputed borders high in the Himalayas. Tension has also been building in the Indian Ocean, with New Delhi wary of Beijing's inroads into its backyard.

Under its former strongman president, Abdulla Yameen, who took power in 2013, the Maldives turned away from New Delhi and grew closer to Beijing, receiving hundreds of millions of dollars of Chinese funds to develop its coral islands. But Yameen's surprise election defeat in late 2018 gave India an opportunity to mend relations with its traditional ally, which owes China between $1.5 billion and $3 billion.

"For India, there are a lot of worries in regard to China," said Manoj Joshi, a distinguished fellow at the Observer Research Foundation, a New Delhi-based think tank.

"The Maldives is just too important for us," he added, citing its proximity to India's western coast. "There's nothing India can do in the Maldives to affect Chinese security, but there's a lot the Chinese can do in the Maldives to affect Indian security."

Shifting relations​

An archipelago of nearly 1,200 low-lying coral islands and fewer than half a million people, the Maldives is the smallest Asian country by both land size and population. But it spreads over a swathe of strategically important waters and shipping lanes in the Indian Ocean.

By some estimates, half of India's external trade and 80% of its energy imports transit the sea lanes near the Maldives. China's crude oil imports from the Middle East and Africa -- which as of last year accounted for 62% of its total imports -- also travel along these routes.

Given their geographic proximity and strong historic and economic ties, India was for decades the Maldives' closest ally. It was one of the first countries to recognize Malé after it gained independence from the British in 1965. It also helped foil a coup attempt against the country's longtime dictator Maumoon Abdul Gayoom in 1988, sending in paratroopers to rescue Gayoom and restore order. And in 2004, India dispatched three navy vessels to bring aid to the Maldives following the Indian Ocean tsunami.

Former Maldives President Abdulla Yameen (L) shakes hand with Chinese President Xi Jinping after a signing ceremony at the Great Hall of the People in Beijing in December 2017.

But ties soured after Yameen -- an estranged half-brother of Gayoom -- came to power in 2013 in a disputed election. Domestically, Yameen was accused of eroding the Maldives' young and fragile democracy, as he cracked down on dissent, seized control of state institutions and jailed opposition leaders. On foreign policy, the authoritarian leader steered Malé away from Delhi and towards Beijing, courting Chinese investment under the Belt and Road Initiative (BRI) -- a trillion-dollar global infrastructure program announced shortly before Yameen took office.

Before late 2011, Beijing didn't even have an embassy in Malé. But under the BRI, the Maldives rose to prominence as an "important link" in the Maritime Silk Road -- an ancient sea route connecting China with Europe and Africa.
In 2014, Chinese President Xi Jinping made the first visit by a Chinese head of state to the island nation, paving the way for a slew of Chinese investment projects that would break ground in the following years, including the $800 million expansion of its international airport in 2016, a public housing project of 7,000 apartments on the reclaimed island of Hulhumalé near Malé, and, of course, the China-Maldives Friendship Bridge.


Chinese bridge​

Completed in 2018, the bridge was hailed by Yameen as a "milestone" in the countries' bilateral relations.
"We appreciate the assistance provided by the Chinese government, which has made the dream of the Maldivian people a reality," Yameen said at the bridge's opening ceremony -- an evening of fireworks and music he officiated with a special envoy sent by Beijing.

The idea of a cross-sea bridge between Malé and the airport island of Hulhulé was first announced as a campaign pledge by Gayoom in 2008, when he sought to extend a three-decade hold on power in the country's first free presidential elections. The bridge would link Malé not only to the airport, but also the adjacent residential island of Hulhumalé.

Confined to an island smaller than New York's Central Park, Malé is home to some 150,000 residents -- roughly a third of the country's population -- making it one of the most densely populated cities in the world. Gayoom launched Hulhumalé, a massive land reclamation project, to ease overcrowding in the capital in 1997. It is now home to 50,000 residents, and is planned to eventually accommodate 240,000 people.
For years, the only way to go between the two islands was by ferry. During peak commuter times, queuing for the 20-minute ride from Hulhumalé to work on Malé could take hours. Yet while some Maldivians welcomed the convenience of a bridge, others questioned its technical and economic feasibility. The bridge would have to stand on fragile coral reefs, and opponents argued that its construction cost could never be recovered through a toll.
Ultimately, Gayoom couldn't build the bridge, losing the 2008 election to Mohamed Nasheed, a political activist who had spent long periods in jail under Gayoom's autocratic rule. Instead, Nasheed's government started construction in 2011. But that plan fell through, too, and just two months after the announcement, Nasheed was forced to resign in what he described as a coup by the military and police -- a claim later refuted by a Commonwealth-backed inquiry.

The China-Maldives Friendship Bridge connects Malé with Hulhule and Hulhumalé islands.
The bridge was finally built under Yameen, with Chinese money, workers and technical know-how. It ended up costing $200 million, with China providing $116 million in grants and $72 million in loans, and the rest paid by the Maldivian government.

Now, it only takes a matter of minutes to drive across the bridge and commute between Malé and Hulhumalé.

Zimaam, a former Malé resident and construction worker, moved to Hulhumalé after the bridge opened in 2018. He now owns a motorbike repair garage in Hulhumalé. Business is good, he said, and he still goes to Malé daily to buy supplies.

"Before we had to travel by ferry and it cost more money," he said. "Now with the bridge it's much easier."

Mounting debt​

Chinese infrastructure projects like the bridge, however, have also left behind a mountain of debt.

After incumbent President Ibrahim Mohamed Solih took office in November 2018, his government had a hard time figuring out how much the Maldives owed China. Its central bank governor believed the government directly owed $600 million to Beijing, but there was also $900 million in loans issued to Maldivian companies under sovereign guarantees -- which the Maldivian government would be obliged to pay back if borrowers default on their loans.

"There were a lot of concerns about ... the ability of the Maldives to repay these loans to China, that a lot of these loans were for projects which were not necessarily very economically feasible, or which had been obtained by Chinese companies under very questionable circumstances," said David Brewster, a senior research fellow at the National Security College of the Australian National University.

Yameen, who was sentenced to five years in prison last November for money laundering, is accused by the new government of signing Chinese investment contracts at inflated prices. An investigation into the deals for alleged corruption is now underway.

China's foreign ministry says the projects are "based on Maldives wishes and needs for development" to "enhance the well-being of the Maldivian people."

Former President Nasheed, now leader of Solih's ruling Maldivian Democratic Party, said the country's China debt could run as high as $3 billion -- or more than half of the country's GDP. Chinese officials have denied this, calling the figure "deeply exaggerated."

With the coronavirus pandemic bringing international tourism to a halt, those debts are further straining the Maldives' small economy.

The World Bank expects the Maldives to be the hardest-hit South Asian nation by the pandemic, with a projected 19.5% contraction in GDP this year. In April, the International Monetary Fund said the Maldives was at "high risk" of debt distress, with China accounting for 53% of its external debt.
Maldivian officials have tried to renegotiate the debts with China. In September, Chinese Ambassador to the Maldives Zhang Lizhong said on Twitter that Beijing had suspended the bilateral sovereign loans for the Maldives under the G20's debt service suspension initiative.

Security personnel in Malé stand guard outside a residential area for Bangladeshi workers, who were placed under coronavirus quarantine in May.

But the suspension does not apply to the hundreds of millions of dollars of debt held by Maldivian companies under sovereign guarantee. In July, Maldivian media reported that China's Exim Bank ordered the Maldivian government to repay $10 million after Ahmed Siyam, a resort tycoon and close ally of Yameen, defaulted on payments for a $127 million sovereign-guaranteed loan granted to his business three years ago. That loan is controversial in itself -- it is highly unusual for a private company to receive a sovereign guarantee, which is usually granted to the state sector.

Amid fears of a sovereign default, the Maldivian finance ministry announced in August that Siyam's company had paid back the loan in full. But analysts say the incident remains a warning of the risks of taking on billions of dollars in debt to China.

According to Nasheed, the Maldives needs to repay $83 million to China by the end of this year, and another $320 million in 2021. He said 53% of the Maldives' government revenue next year will be used for debt repayment -- of which more than 80% will go to China.

"Totally unaffordable," Nasheed wrote on Twitter this week. "Even if we sell our grandmother's jewelry, we won't be able to afford these repayments."

China's foreign ministry said Beijing had "always attached great importance to the sustainability of Maldives' debt."
"China has made appropriate arrangements for issues relating to loan interest rates, repayment periods and grace periods from the beginning of the negotiations on related cooperation," it said in a statement Monday. "It should be pointed out that the current debt repayment obligations of Maldives mainly come from other bilateral and multilateral financial institutions, not China."

Warming ties​

Under the new government, the Maldives has increasingly looked to India, with Delhi equally eager to repair bilateral ties. According to India's foreign ministry, Delhi's total pledged financial assistance to the Maldives has surpassed $2 billion since Solih came to power.

"It is really quite unprecedented for India, in terms of the scale of the assistance and also the speed in which it has been deployed," Brewster said. "It points to a view in Delhi about the importance of the Maldives, that India needs to spend whatever it takes to secure its position there."

A month into Solih's term in office, Indian Prime Minister Narendra Modi announced $1.4 billion financial assistance to the Maldives amid worries over its soaring Chinese debts. And in August this year, India announced a $500 million package to fund the Greater Malé Connectivity Project, linking Malé to the islands of Vilingili, Gulhifalhu and Thilafushi through a series of bridges and causeways. The package consists of a $100 million grant and a $400 million soft loan, or line of credit. According to India's Exim Bank, this type of soft loans are issued to the Maldives at a low interest rate of 1.75%, with a credit period of 20 years. In addition, India pledged $250 million of budgetary support to the Maldives to boost its coronavirus-battered economy.

Indian Prime Minister Narendra Modi welcomes Maldives President Ibrahim Mohamed Solih in New Delhi in December 2018.

Nasheed described the financial package as "super low cost development assistance," which he said was "exactly what (the) Maldives needs."

"Genuine help from a friend, to help us build critical infrastructure. Rather than eye-wateringly expensive commercial loans that leaves the nation mired in debt," he said on Twitter.

An array of Indian funded infrastructure projects are already underway in the Maldives, including a cricket stadium and a hospital in Hulhumalé, a $300 million port project on Gulhifalhu, the redevelopment of an airport at Hanimaadhoo, and water and sewerage projects on 34 islands.

While loans for infrastructure projects might look similar to Chinese investment, Nasheed says a key difference is transparency. "There's no tendering process," he said of the Chinese projects. "The Maldives has no say in who gets the contract, or how much the price is."

A signboard at the construction site of the China-Maldives Friendship Bridge reads: "Here, we represent China!"
The Maldives has much more control over Indian-funded projects, Nasheed said. "The tendering process happens here, the award (of contract) happens here, the monitoring happens here, and the labor can come from here," he added. "It really sinks into our economy."

But Joshi, from the Observer Research Foundation, said there is a limit to the amount of infrastructure investment and financial aid India can offer its island neighbor.

The Indian economy has suffered a devastating blow from the coronavirus pandemic. Following a nationwide lockdown, its GDP contracted 23.9% from April to June -- its biggest slump on record. According to a World Bank report in July, about half of India's population is at risk of slipping back into poverty due to income and job losses.
"The Indian economy is less developed (than China's). If you're going to be developing infrastructure (in the Maldives), people would say, 'What about here?'" Joshi said.

Balancing act​

While leaning closer to India, analysts said the Maldives cannot afford to alienate Beijing -- partly due to the large amount of debt it owes and its reliance on China for income. China is the largest source of tourists to the Maldives, and a key market for the recovery of its tourism sector after the pandemic.

Solih's government has repeatedly assured Beijing of its commitment to maintaining good relations.

"China has been and will continue to remain as an important economic and bilateral development partner of the Maldives," Maldivian Foreign Minister Abdulla Shahid said in an interview with Xinhua in July.

Brewster said the Maldives was likely to welcome further Chinese investment in the future, provided it was not in areas seen as too politically controversial.

At the same time, the Maldives is reaching out to countries like the US and Japan.

On October 28, US Secretary of State Mike Pompeo tweeted this image following his meeting with Maldives President Ibrahim Mohamed Solih.

In September, Japan extended a $47.5 million loan to support the Maldives in the Covid-19 crisis, the largest concessional loan it has ever given the island nation. And last month, during a five-day tour in South and Southeast Asia, Secretary of State Mike Pompeo announced the US would open an embassy in Malé. The announcement came after the US and the Maldives signed a defense agreement in September.

"These are all actions by like-minded countries to support India's position and to ensure that the Maldives government doesn't come under undue influence from Beijing," Brewster said.

The growing rivalry between India and China means the Maldives will need to tread carefully to maintain good relations with both Asian giants.

Yet Nasheed said there was no question which one will be the priority.

"We have no intention of severing our relations with China. But because we're a center-right democratic party, we like like-minded friends -- and we believe India is the biggest democracy," he said.

"It's India first. We always say that."
 
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India, Maldives sign agreements for developing naval harbour, boosting defence​

India on Sunday extended a $50-million line of credit to the Maldives for defence projects and the two countries signed an agreement to develop and maintain a key naval facility for the armed forces of the Indian Ocean archipelago.

The agreements for the defence line of credit and developing the harbour at Uthuru Thila Falhu naval base were signed on the second and final day of external affairs minister S Jaishankar’s visit to the Maldives. Five other agreements, including one for a $25-million line of credit for the development of roads, were signed on Saturday.

The agreement between India’s EXIM Bank and the Maldivian government for the defence line of credit will facilitate capability building in the maritime domain, Jaishankar said without giving details.


Cordial meeting with Defence Minister @MariyaDidi. Useful exchange on our defence cooperation. India will always be a reliable security partner for Maldives. pic.twitter.com/0TTZVAMRfJ
— Dr. S. Jaishankar (@DrSJaishankar) February 21, 2021



Jaishankar and Maldives defence minister Mariya Didi signed the agreement to “develop, support and maintain” the Coast Guard harbour in Uthuru Thila Falhu. The two ministers also reviewed various facets of defence and security cooperation during their meeting. Jaishankar said India "will always be a reliable security partner".

Didi said the harbour and dockyard will mark “another significant milestone” in bilateral defence cooperation, while Jaishankar said the facility will strengthen the capability of the Maldivian Coast Guard and facilitate regional humanitarian assistance and disaster relief efforts.

The Maldives doesn’t have a navy and the Coast Guard functions as the armed maritime component of the Maldives National Defence Force (MNDF). There is strong maritime cooperation between India and the Maldives, and in the past, New Delhi has provided patrol vessels and maritime surveillance aircraft to bolster MNDF’s capabilities.

In addition to the harbour and dockyard, India will support the development of other infrastructure, communications resources and radar services at Uthuru Thila Falhu and provide training to Maldivian personnel. MNDF officials told the media that no foreign military personnel will be stationed at the facility, which will be used to dock, maintain and repair Coast Guard vessels.

A joint statement said the agreement on developing the harbour was in line with several requests made by the Maldives since 2013 for India’s support to enhance the capability of its defence forces to effectively control and conduct surveillance in its exclusive economic zone.

The agreement is also in line with a bilateral action plan for defence cooperation signed in April 2016 and subsequent discussions held during 2016-19.

Jaishankar held a joint meeting with Maldives' finance minister Ibrahim Ameer, national planning minister Mohamed Aslam and economic development minister Fayyaz Ismail to review various infrastructure projects and economic activities being undertaken in the Maldives with Indian support.

During a meeting with Jaishankar on Saturday, Maldives’ foreign minister Abdulla Shahid sought a second tranche of funding under India’s “high impact community development projects” scheme. The ministers also agreed on the importance of peace and security in the Indian Ocean, and decided to strengthen coordination for regional maritime security, combating terrorism and ensuring freedom of navigation.

The Maldives has been one of the biggest beneficiaries under India's 'Neighbourhood First' policy. India is backing major infrastructure projects under two lines of credit worth $1.2 billion. New Delhi also extended budgetary support of $250 million last year to help the Maldives cope with the economic impact of the Covid-19 pandemic.

The five agreements signed on Saturday included a letter of intent between India’s EXIM Bank and local authorities on financing a housing project of 2,000 units, a memorandum of understanding (MoU) for a grant of $500,000 for a fish processing plant, and an MoU on sustainable urban development.

Jaishankar also handed over 100,000 doses of Covid-19 vaccines as a grant. This was in addition to another 100,000 doses provided last month under India’s Vaccine Maitri initiative.
 

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A tale of two bridges: India and China vying for influence in the Maldives​

(CNN)In the heart of the Indian Ocean, a 2.1-kilometer (1.3-mile) bridge snakes out of an idyllic atoll, linking the Maldives' capital Malé with its international airport.

The China-Maldives Friendship Bridge, built with $200 million largely funded by Beijing, is among a growing list of Chinese projects in the tropical South Asian nation popular for its white sand beaches and turquoise lagoons.
But China's expanding footprint in the Maldives has unsettled neighboring India, which views the region as part of its traditional sphere of influence -- and at risk of being pulled away from its orbit.

In a move widely seen as an attempt to counter growing Chinese influence, India announced in August a $500 million package for its own bridge. Billed "the largest civilian infrastructure project" to be built in the Maldives, the 6.7-kilometer (4.1-mile) bridge and causeway will link Malé with three nearby islands, overshadowing the Chinese bridge in length, scale and price.

Completed in 2018, the China-Maldives Friendship Bridge is the flagship project of China's infrastructure boom in the Maldives.

The infrastructure race is another measure of the escalating geopolitical rivalry between India and China. In recent months, conflicts have flared along their disputed borders high in the Himalayas. Tension has also been building in the Indian Ocean, with New Delhi wary of Beijing's inroads into its backyard.

Under its former strongman president, Abdulla Yameen, who took power in 2013, the Maldives turned away from New Delhi and grew closer to Beijing, receiving hundreds of millions of dollars of Chinese funds to develop its coral islands. But Yameen's surprise election defeat in late 2018 gave India an opportunity to mend relations with its traditional ally, which owes China between $1.5 billion and $3 billion.

"For India, there are a lot of worries in regard to China," said Manoj Joshi, a distinguished fellow at the Observer Research Foundation, a New Delhi-based think tank.

"The Maldives is just too important for us," he added, citing its proximity to India's western coast. "There's nothing India can do in the Maldives to affect Chinese security, but there's a lot the Chinese can do in the Maldives to affect Indian security."

Shifting relations​

An archipelago of nearly 1,200 low-lying coral islands and fewer than half a million people, the Maldives is the smallest Asian country by both land size and population. But it spreads over a swathe of strategically important waters and shipping lanes in the Indian Ocean.

By some estimates, half of India's external trade and 80% of its energy imports transit the sea lanes near the Maldives. China's crude oil imports from the Middle East and Africa -- which as of last year accounted for 62% of its total imports -- also travel along these routes.

Given their geographic proximity and strong historic and economic ties, India was for decades the Maldives' closest ally. It was one of the first countries to recognize Malé after it gained independence from the British in 1965. It also helped foil a coup attempt against the country's longtime dictator Maumoon Abdul Gayoom in 1988, sending in paratroopers to rescue Gayoom and restore order. And in 2004, India dispatched three navy vessels to bring aid to the Maldives following the Indian Ocean tsunami.

Former Maldives President Abdulla Yameen (L) shakes hand with Chinese President Xi Jinping after a signing ceremony at the Great Hall of the People in Beijing in December 2017.

But ties soured after Yameen -- an estranged half-brother of Gayoom -- came to power in 2013 in a disputed election. Domestically, Yameen was accused of eroding the Maldives' young and fragile democracy, as he cracked down on dissent, seized control of state institutions and jailed opposition leaders. On foreign policy, the authoritarian leader steered Malé away from Delhi and towards Beijing, courting Chinese investment under the Belt and Road Initiative (BRI) -- a trillion-dollar global infrastructure program announced shortly before Yameen took office.

Before late 2011, Beijing didn't even have an embassy in Malé. But under the BRI, the Maldives rose to prominence as an "important link" in the Maritime Silk Road -- an ancient sea route connecting China with Europe and Africa.
In 2014, Chinese President Xi Jinping made the first visit by a Chinese head of state to the island nation, paving the way for a slew of Chinese investment projects that would break ground in the following years, including the $800 million expansion of its international airport in 2016, a public housing project of 7,000 apartments on the reclaimed island of Hulhumalé near Malé, and, of course, the China-Maldives Friendship Bridge.


Chinese bridge​

Completed in 2018, the bridge was hailed by Yameen as a "milestone" in the countries' bilateral relations.
"We appreciate the assistance provided by the Chinese government, which has made the dream of the Maldivian people a reality," Yameen said at the bridge's opening ceremony -- an evening of fireworks and music he officiated with a special envoy sent by Beijing.

The idea of a cross-sea bridge between Malé and the airport island of Hulhulé was first announced as a campaign pledge by Gayoom in 2008, when he sought to extend a three-decade hold on power in the country's first free presidential elections. The bridge would link Malé not only to the airport, but also the adjacent residential island of Hulhumalé.

Confined to an island smaller than New York's Central Park, Malé is home to some 150,000 residents -- roughly a third of the country's population -- making it one of the most densely populated cities in the world. Gayoom launched Hulhumalé, a massive land reclamation project, to ease overcrowding in the capital in 1997. It is now home to 50,000 residents, and is planned to eventually accommodate 240,000 people.
For years, the only way to go between the two islands was by ferry. During peak commuter times, queuing for the 20-minute ride from Hulhumalé to work on Malé could take hours. Yet while some Maldivians welcomed the convenience of a bridge, others questioned its technical and economic feasibility. The bridge would have to stand on fragile coral reefs, and opponents argued that its construction cost could never be recovered through a toll.
Ultimately, Gayoom couldn't build the bridge, losing the 2008 election to Mohamed Nasheed, a political activist who had spent long periods in jail under Gayoom's autocratic rule. Instead, Nasheed's government started construction in 2011. But that plan fell through, too, and just two months after the announcement, Nasheed was forced to resign in what he described as a coup by the military and police -- a claim later refuted by a Commonwealth-backed inquiry.

The China-Maldives Friendship Bridge connects Malé with Hulhule and Hulhumalé islands.
The bridge was finally built under Yameen, with Chinese money, workers and technical know-how. It ended up costing $200 million, with China providing $116 million in grants and $72 million in loans, and the rest paid by the Maldivian government.

Now, it only takes a matter of minutes to drive across the bridge and commute between Malé and Hulhumalé.

Zimaam, a former Malé resident and construction worker, moved to Hulhumalé after the bridge opened in 2018. He now owns a motorbike repair garage in Hulhumalé. Business is good, he said, and he still goes to Malé daily to buy supplies.

"Before we had to travel by ferry and it cost more money," he said. "Now with the bridge it's much easier."

Mounting debt​

Chinese infrastructure projects like the bridge, however, have also left behind a mountain of debt.

After incumbent President Ibrahim Mohamed Solih took office in November 2018, his government had a hard time figuring out how much the Maldives owed China. Its central bank governor believed the government directly owed $600 million to Beijing, but there was also $900 million in loans issued to Maldivian companies under sovereign guarantees -- which the Maldivian government would be obliged to pay back if borrowers default on their loans.

"There were a lot of concerns about ... the ability of the Maldives to repay these loans to China, that a lot of these loans were for projects which were not necessarily very economically feasible, or which had been obtained by Chinese companies under very questionable circumstances," said David Brewster, a senior research fellow at the National Security College of the Australian National University.

Yameen, who was sentenced to five years in prison last November for money laundering, is accused by the new government of signing Chinese investment contracts at inflated prices. An investigation into the deals for alleged corruption is now underway.

China's foreign ministry says the projects are "based on Maldives wishes and needs for development" to "enhance the well-being of the Maldivian people."

Former President Nasheed, now leader of Solih's ruling Maldivian Democratic Party, said the country's China debt could run as high as $3 billion -- or more than half of the country's GDP. Chinese officials have denied this, calling the figure "deeply exaggerated."

With the coronavirus pandemic bringing international tourism to a halt, those debts are further straining the Maldives' small economy.

The World Bank expects the Maldives to be the hardest-hit South Asian nation by the pandemic, with a projected 19.5% contraction in GDP this year. In April, the International Monetary Fund said the Maldives was at "high risk" of debt distress, with China accounting for 53% of its external debt.
Maldivian officials have tried to renegotiate the debts with China. In September, Chinese Ambassador to the Maldives Zhang Lizhong said on Twitter that Beijing had suspended the bilateral sovereign loans for the Maldives under the G20's debt service suspension initiative.

Security personnel in Malé stand guard outside a residential area for Bangladeshi workers, who were placed under coronavirus quarantine in May.

But the suspension does not apply to the hundreds of millions of dollars of debt held by Maldivian companies under sovereign guarantee. In July, Maldivian media reported that China's Exim Bank ordered the Maldivian government to repay $10 million after Ahmed Siyam, a resort tycoon and close ally of Yameen, defaulted on payments for a $127 million sovereign-guaranteed loan granted to his business three years ago. That loan is controversial in itself -- it is highly unusual for a private company to receive a sovereign guarantee, which is usually granted to the state sector.

Amid fears of a sovereign default, the Maldivian finance ministry announced in August that Siyam's company had paid back the loan in full. But analysts say the incident remains a warning of the risks of taking on billions of dollars in debt to China.

According to Nasheed, the Maldives needs to repay $83 million to China by the end of this year, and another $320 million in 2021. He said 53% of the Maldives' government revenue next year will be used for debt repayment -- of which more than 80% will go to China.

"Totally unaffordable," Nasheed wrote on Twitter this week. "Even if we sell our grandmother's jewelry, we won't be able to afford these repayments."

China's foreign ministry said Beijing had "always attached great importance to the sustainability of Maldives' debt."
"China has made appropriate arrangements for issues relating to loan interest rates, repayment periods and grace periods from the beginning of the negotiations on related cooperation," it said in a statement Monday. "It should be pointed out that the current debt repayment obligations of Maldives mainly come from other bilateral and multilateral financial institutions, not China."

Warming ties​

Under the new government, the Maldives has increasingly looked to India, with Delhi equally eager to repair bilateral ties. According to India's foreign ministry, Delhi's total pledged financial assistance to the Maldives has surpassed $2 billion since Solih came to power.

"It is really quite unprecedented for India, in terms of the scale of the assistance and also the speed in which it has been deployed," Brewster said. "It points to a view in Delhi about the importance of the Maldives, that India needs to spend whatever it takes to secure its position there."

A month into Solih's term in office, Indian Prime Minister Narendra Modi announced $1.4 billion financial assistance to the Maldives amid worries over its soaring Chinese debts. And in August this year, India announced a $500 million package to fund the Greater Malé Connectivity Project, linking Malé to the islands of Vilingili, Gulhifalhu and Thilafushi through a series of bridges and causeways. The package consists of a $100 million grant and a $400 million soft loan, or line of credit. According to India's Exim Bank, this type of soft loans are issued to the Maldives at a low interest rate of 1.75%, with a credit period of 20 years. In addition, India pledged $250 million of budgetary support to the Maldives to boost its coronavirus-battered economy.

Indian Prime Minister Narendra Modi welcomes Maldives President Ibrahim Mohamed Solih in New Delhi in December 2018.

Nasheed described the financial package as "super low cost development assistance," which he said was "exactly what (the) Maldives needs."

"Genuine help from a friend, to help us build critical infrastructure. Rather than eye-wateringly expensive commercial loans that leaves the nation mired in debt," he said on Twitter.

An array of Indian funded infrastructure projects are already underway in the Maldives, including a cricket stadium and a hospital in Hulhumalé, a $300 million port project on Gulhifalhu, the redevelopment of an airport at Hanimaadhoo, and water and sewerage projects on 34 islands.

While loans for infrastructure projects might look similar to Chinese investment, Nasheed says a key difference is transparency. "There's no tendering process," he said of the Chinese projects. "The Maldives has no say in who gets the contract, or how much the price is."

A signboard at the construction site of the China-Maldives Friendship Bridge reads: "Here, we represent China!"
The Maldives has much more control over Indian-funded projects, Nasheed said. "The tendering process happens here, the award (of contract) happens here, the monitoring happens here, and the labor can come from here," he added. "It really sinks into our economy."

But Joshi, from the Observer Research Foundation, said there is a limit to the amount of infrastructure investment and financial aid India can offer its island neighbor.

The Indian economy has suffered a devastating blow from the coronavirus pandemic. Following a nationwide lockdown, its GDP contracted 23.9% from April to June -- its biggest slump on record. According to a World Bank report in July, about half of India's population is at risk of slipping back into poverty due to income and job losses.
"The Indian economy is less developed (than China's). If you're going to be developing infrastructure (in the Maldives), people would say, 'What about here?'" Joshi said.

Balancing act​

While leaning closer to India, analysts said the Maldives cannot afford to alienate Beijing -- partly due to the large amount of debt it owes and its reliance on China for income. China is the largest source of tourists to the Maldives, and a key market for the recovery of its tourism sector after the pandemic.

Solih's government has repeatedly assured Beijing of its commitment to maintaining good relations.

"China has been and will continue to remain as an important economic and bilateral development partner of the Maldives," Maldivian Foreign Minister Abdulla Shahid said in an interview with Xinhua in July.

Brewster said the Maldives was likely to welcome further Chinese investment in the future, provided it was not in areas seen as too politically controversial.

At the same time, the Maldives is reaching out to countries like the US and Japan.

On October 28, US Secretary of State Mike Pompeo tweeted this image following his meeting with Maldives President Ibrahim Mohamed Solih.

In September, Japan extended a $47.5 million loan to support the Maldives in the Covid-19 crisis, the largest concessional loan it has ever given the island nation. And last month, during a five-day tour in South and Southeast Asia, Secretary of State Mike Pompeo announced the US would open an embassy in Malé. The announcement came after the US and the Maldives signed a defense agreement in September.

"These are all actions by like-minded countries to support India's position and to ensure that the Maldives government doesn't come under undue influence from Beijing," Brewster said.

The growing rivalry between India and China means the Maldives will need to tread carefully to maintain good relations with both Asian giants.

Yet Nasheed said there was no question which one will be the priority.

"We have no intention of severing our relations with China. But because we're a center-right democratic party, we like like-minded friends -- and we believe India is the biggest democracy," he said.

"It's India first. We always say that."

Maldives is threatened by global climate change. We should offer all citizens to join India, in exchange for political merger. This guarantees the residents a home to go to in case sea levels rise.

#AkhandBharat
 

Syama Ayas

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Dec 4, 2017
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West of Diego Garcia, India is Building an Island Base of its Own​


West of Diego Garcia, India is Building an Island Base of its Own​

north agalela
North Agalela circa 2001 (NASA)
BY THE LOWY INTERPRETER 03-03-2021 10:42:00




[By Samuel Bashfield]

The small, remote Mauritian island of North Agalega, located in the south-western Indian Ocean, 700 miles north of Mauritius, is currently a hive of construction activity. India sought access to the islands in 2015 to develop as an air and naval staging point for surveillance of the south-west Indian Ocean – in a sense redolent of facilities other nations operate, such as the joint US-UK base at Diego Garcia.

Satellite imagery shows major airfield and port developments are well underway, reportedly worth some $87 million. Comparing the most recent images from Google Earth to the same location as seen in 2014 shows a new 3000-meter runway – capable of hosting the Indian Navy’s new Boeing P-8I maritime patrol aircraft – and considerable apron overshadows the existing airfield in the middle of the island.

India regards the new base to be essential for facilitating both air and surface maritime patrols in the south-west Indian Ocean, and as an intelligence outpost. This recent satellite imagery now indicates the scale and capabilities of this new facility. The project entails a new airport, port and logistics and communication facilities and – potentially – “any other facility related to the project." So far, project details have been tightly held by both India and Mauritius.

The imagery shows what looks like barracks and fields which could be used as parade grounds or sporting facilities located near the north end of the runway. These images do not readily show evidence of fuel storage facilities, or communications and intelligence installations – such as radomes. Such equipment and facilities are expected to be visible in future imagery.

North Agalega Island is some seven miles long and one mile wide, with a total population of less than 300 people. Until recently, it was virtually cut off from the world, with a rudimentary jetty and a small airfield barely fit for light aircraft.

The island is a former slave plantation, and the name of its main town of Vingt Cinq (twenty five in French) is thought to refer to the number of lashes slaves would receive as punishment.

The jetty and port facilities India is constructing are also noteworthy. A port is being constructed at the north end of the island (which now includes accommodation for up to 430 Indian workers and it is assumed that these buildings will be retained and repurposed once construction concludes). The latest images show the original jetty in addition to the considerable port development (two longer jetties) stretching closer to the deep water.

India’s Ministry of External Affairs stated the agreement with Mauritius inked in 2015 would “go a long way in ameliorating the conditions of the inhabitants of this remote island” – while also enabling Mauritian Defence Force operations. India had also hoped for a similar arrangement in the Seychelles.

This development is a manifestation of Modi’s 2016 vision for the Indian Ocean, articulated as "Security and Growth for All in the Region" (SAGAR). Under SAGAR, New Delhi aims to work together with Indian Ocean regional governments to “engineer virtuous cycles of cooperation”.

But more importantly, this facility in Mauritius will provide an important staging point for India’s new P8I fleet, which recently conducted its first joint patrol with France from nearby Réunion. This was followed by India signing an agreement with Japan which provides India access naval facilities at Djibouti. Agalega will also facilitate maritime patrols over the Mozambique Channel – now a popular passage for large commercial ships, particularly oil tankers. The staging point will also allow the Indian Navy to observe shipping routes around southern Africa, which now account for a significant portion of China’s energy imports.

The island will presumably also provide a useful location for communications and electronic intelligence facilities.

India has long had a close security relationship with Mauritius, anchoring its prominent role in the south-west Indian Ocean. The relationship is bolstered by ethnic ties and a shared Hindu religion with many Mauritians. This has led commentators to describe Mauritius as the “Little India” of the south-west Indian Ocean – evidenced in part by Indian funding of major infrastructure projects, and provision of lines of credit. Indian officials also occupying some key security positions in the Mauritian government, including the roles of National Security Advisor and head of the Mauritius Coast Guard.

In recent years, India has sought to further develop its military access to the south-west Indian Ocean and Mozambique Channel by building a new naval and air facility on Seychelles’ remote Assumption Island. In 2015, Modi signed an agreement with the Seychelles President to develop Assumption Island for military use. But the deal generated considerable political opposition in the Seychelles. A revised deal was signed in 2018, but the recently elected Seychelles President Wavel Ramkalawan has canned the project over sovereignty and environmental concerns. These developments will only bolster India’s resolve to militarize Agalega.

Parallels with the Chagossian experience – a people forcibly removed from the Chagos Archipelago in the early 1970s to make way for the joint UK-US military base on Diego Garcia – sound alarms for ethnic Creole Agaléens and their supporters.

As the Chagos example tragically demonstrated, in the eyes of some military planners, “islanders and a base would not mix." How Mauritius manages the construction and eventual Indian military use of Agalega will have immense consequences for the Agaléens.

This base on Agalega will cement India’s presence in the south-west Indian Ocean and facilitate its power projection aspirations in this region. As new imagery of Agalega is publicly released in the coming months the full scale and capabilities of this facility will be better understood.

Samuel Bashfield is a PhD candidate and research officer at the Australian National University’s National Security College.

This article is part of a two-year project being undertaken by the ANU National Security College on the Indian Ocean, with the support of the Australian Department of Defence. It appears here courtesy of The Lowy Interpreter and may be found in its original form here.


The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

West of Diego Garcia, India is Building an Island Base of its Own
 

AbRaj

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Dec 6, 2017
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Uthuru Thilafalhu is being developed as Indian military base: Umar

Maldivians are inherently anti India.
It’s another mini Bangladesh.
Our relationship depends on a single but popular political party.
 
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RISING SUN

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INS SARVEKSHAK IN MAURITIUS​

INS Sarvekshak, a hydrographic survey ship, is on a deployment to Mauritius for undertaking joint hydrographic surveys along with their Mauritian counterparts. During the deployment, training of Mauritian personnel on advanced hydrographic equipment and practices will also be undertaken. The ship visited Port Louis, Mauritius and commenced the hydrographic survey of ‘Deep sea area off Port Louis’.


INS Sarvekshak, a specialised survey ship is fitted with state-of-the-art survey equipment like Deep Sea Multi-Beam Echo Sounder, Side Scan Sonars and a fully automated digital surveying and processing system. In addition, the ship carries an integral Chetak helicopter, which would be extensively deployed during the survey.


INS Sarvekshak has undertaken various foreign cooperation surveys over the last few years in Mauritius, Seychelles, Tanzania and Kenya.


19JG3.jpg



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RISING SUN

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What signing of the $500m India-Maldives mega-infra project means​

A year after India’s External Affairs Minister, Dr. S. Jaishankar, visited the Maldives and during a meeting with his counterpart Maldives Foreign Minister Abdulla Shahid, announced the signing of a $500-million infrastructure project, the Maldives government officially signed an agreement with Mumbai-based company AFCONS, for the construction of the Greater Malé Connectivity Project (GMCP).

This infrastructure project, the largest-ever by India in the Maldives, involves the construction of a 6.74-km-long bridge and causeway link that will connect the Maldives capital Malé with the neighbouring islands of Villingli, Gulhifalhu and Thilafushi. According to India’s High Commission in the country, this project was funded by India in a grant of $100 million, with a line of credit of $400 million.

“The Greater Malé Connectivity Project supports the vision of Prime Minister Modi and President Solih for strong bilateral relations. The seeds of the project were planted during the External Affairs Minister’s visit to Malé in September 2019. The GMCP is concrete proof that India is a robust development partner of the Maldives in addition to being the First Responder in times of any emergency in the Maldives,” Sunjay Sudhir, High Commissioner of India to the Maldives, told indianexpress.com in a statement.

“The GMCP is not only the biggest project India is doing in the Maldives but also the biggest infrastructure project in the Maldives overall. This iconic project will give a major boost to the Maldivian economy,” Sudhir added.

What is this project about?
In August last year, The Indian Express had reported that New Delhi had decided to support the implementation of this project following a request from the Maldives government.

This project is significant because it facilitates inter-island connectivity in the country, said Dr. Gulbin Sultana, a research analyst at the Manohar Parrikar Institute for Defence Studies and Analyses, whose area of research includes the Maldives. “Transport is a major challenge for residents who have to take boats or seaplanes to distant islands. Locals take ferries or boats,” Sultana told indianexpress.com. It becomes even more difficult during the monsoons when the seas are rough. This bridge that would connect Malé with the three neighbouring islands would ease the process, Sultana added.

The Chinese-made 1.39 km-long Sinamalé Bridge connects Malé with the islands of Hulhulé and Hulhumalé and this project, four times longer, would link the other three islands.
maldives-2.jpg
The project is significant because it facilitates inter-island connectivity in the country, said Dr. Gulbin Sultana. (Photo credit: High Commission of India to the Maldives)

Why it is needed?
Close to 40% of the entire population of the Maldives lives in Malé, that has an area of approximately 8.30 square kilometres, making it one of the most densely populated cities in the world, according to research by the South Asia Center at the University of Pennsylvania.

“It is very congested and land is a major issue. There is very little scope for Malé city to expand,” explained Sultana.

This prompted the current government in the Maldives to consider decentralisation and the development of other inhabited islands by equipping them with civic facilities like hospitals and other institutions, that would incentivise people to relocate to other islands, reducing the burden on Malé. With this bridge, transportation and connectivity to the capital city would also improve, opening up an alternative route for transport, that has been a persistent issue for the country’s people.
maldives-1.jpg
Photo credit: High Commission of India to the Maldives.

Why these islands?
In the island of Gulhifalhu, a port is at present being built under the Indian line of credit. Located some 6 kilometers from Malé, since 2016, the island has been promoted by the Maldives government as a strategic location for manufacturing, warehousing and distribution facilities due to its proximity to the capital city. Back then, the government had also worked on installation of basic infrastructure, high-load capacity roads, water and sewage systems, telecommunications networks and electricity grids.

Located 7 km from the capital, the artificial island of Thilafushi was created and designated as a landfill in the early 1990s, to receive garbage created mostly in Malé. Over the past five to six years, the government began management of waste more effectively by using modern waste disposal methods instead of the original landfills.
malddives-4.jpg
According to India’s High Commission in the country, this project was funded by India in a grant of $100 million, with a line of credit of $400 million. (Photos credit: High Commission of India to the Maldives)

That coincided with the establishment of industrial manufacturing and warehousing facilities on this island, that transformed it into a major industrial zone. The Maldives has plans of expanding industrial work on Thilafushi, making this bridge’s connectivity to the capital indispensable for the transport of employees and other services.

The finances
“After a five-year grace period, the interest rate is 1.75% and the Maldives has to repay it over a 20-year period. Of the $500 million, $100 million is a grant, while $400 million is the loan. India is investing so much and so we see the current government justify India’s loans as less expensive and more transparent, unlike China’s,” said Sultana, in a reference to Beijing’s debt-trap diplomacy.

Last year, when the agreement was first announced, former President of Maldives Mohamed Nasheed, who is the current Speaker of the Maldives’ parliament, had pointedly referred to China’s loans to the previous Yameen government in a tweet: “The super low cost development assistance announced by @DrSJaishankar today is exactly what Maldives needs. Genuine help from a friend, to help us build critical infrastructure. Rather than eye-wateringly expensive commercial loans that leaves the nation mired in debt. @PMOIndia.”

“Maldives hasn’t really been clear about how much debt they owe to China. Nasheed says that the Maldives owes $3.4 billion, but the Chinese ambassador to the country says it is just $1.4 billion,” Sultana said.

This $500 million has been given only for the Greater Malé Connectivity Project, with several millions of dollars committed by India for other community-focused projects in the country. “When India provides financial assistance, it is always demand-driven. The government of the Maldives decides what projects they want to use that money for,” Sultana explained.

Plans for this Greater Malé project date back to 2013, around the time the Chinese restarted work on the Sinamalé Bridge after a brief pause. When the Solih government came into power in 2018, India expressed interest in working on this project, along with the port in Gulhifalhu. “If India doesn’t do this, someone else would have done it—most likely China,” explained Sultana.

All that is at stake
This isn’t only about an ambitious project involving both India and the Maldives. The terms of the agreement call for the completion of the bridge by 2023. If Mumbai-based AFCONS fails to deliver on the deadline, potentially, it might not reflect well on bilateral relations. “That is a problem, because countries complain that India doesn’t deliver on projects and they tend to make comparisons with China,” said Sultana. For India, Maldives holds strategic importance and showing that it can deliver would help mitigate some concerns that may exist in the Maldives.
Then, there are also the 2023 presidential elections and the 2024 parliamentary elections in the Maldives. Recently, the India-friendly ruling Maldivian Democratic Party has witnessed a split, divided between Nasheed supporters and Solih loyalists.

“It would be in India’s interests to finish the project by 2023, because the MDP couldn’t win the last Malé council elections. Malé is a major seat because 40% of the population lives there,” Sultana said. If the opposition PPM were to come to power, it would be a cause for concern for New Delhi, because they are known to be more friendly towards China than India. “Even otherwise, it is in India’s interests to show that they can meet deadlines.”
 
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