Cash-strapped and once avowedly anti-India Maldives President Muizzu being bailed out by New Delhi with $400 million deal

By Mayank Chhaya-

Since at least 1990 the people of the tiny Indian Ocean Island nation of the Maldives have feared being submerged by the rising sea levels caused by climate change.
Nearly three and half decades later submergence by sea has not happened but the submergence of its economy definitely has. The country and its President Mohammed Muizzu, desperately strapped for precious foreign exchange, have had to turn to India, a country he had disparaged barely a year ago as part of his “India out” campaign rhetoric.

Now that the Maldives is down to barely $440 million in foreign exchange reserves, barely enough to pay for a month and a half of imports, India looks quite attractive to Muizzu.

On a five-day visit to New Delhi, Muizzu has been bailed out by Prime Minister Narendra Modi’s government with a $100-million treasury bills rollover as well as a $400-million currency swap deal.

While a year ago Muizzu was all in on getting India out of the Maldives, including its troops, its dire economic reality hit him hard enough for him to totally change his tune. In an interview to the BBC he sounded more like a chief minister of an Indian state than a head of state.

“India is fully cognizant of our fiscal situation, and as one of our biggest development partners, will always be ready to ease our burden, find better alternatives and solutions to the challenges we face,” Muizzu told the BBC in an email interview before the visit.
“We are confident that any differences can be addressed through open dialogue and mutual understanding,” he said. The differences being his own aggressively anti-India stance.

Modi struck a pragmatic tone despite the early tensions by saying during a news conference that “India is Maldives’ nearest neighbor and a close friend.” That he said was part of New Delhi’s “neighborhood first policy.”

Muizzu has openly sought closer relations with China but now that the island’s economy is in great distress India has become a more practical choice for him. The two leaders virtually inaugurated a new runway of Hanimaadhoo International Airport in the Maldives with Modi saying India was ready to help the country develop its infrastructure.

In the aftermath of the election, in which Muizzu defeated his India-friendly predecessor Ibrahim Mohamed Solih, there were undisguised tensions with many Madivians asking Indian tourists to leave despite the fact that they brought a great deal of economic gains.

Although Modi never said so explicitly, he very publicly promoted India’s Lakshadweep archipelago off the southwestern coast of the Indian mainland as a replacement for the Maldives. That move rattled the island nation.

Muizzu even chose to visit China before coming to India in January in a cavalier display of disregard for New Delhi. However, six months later relations seemed to be on the mend when Modi was re-elected in June this year for a third term and invited Muizzu as one of the guests at his swearing-in.

Muizzu’s five-day visit is clearly aimed at luring India back along with its celebrity tourists from the Mumbai film world whose social media posts from various Maldivian atolls helped the island considerably. For a while boycotting the Maldives in response Muizzu’s anti-India stance became intertwined with India’s nationalist politics.

In some sense, the Modi government is also conscious that they need to refurbish their image within the South Asian region. To that extent the Muizzu visit has come in handy, especially at a time when Sri Lanka, the country’s much bigger Southern neighbor has witnessed the rise of an independent-minded and somewhat Marxist leader in Anura Dissanayake as its president. Bangladesh too has been in ferment after the ouster of the avowedly India and Modi-friendly Sheikh Hasina as prime minister who had had to flee to India in August.