Update Country Report Maldives 25 Jan 2019

Event

Qasim Ibrahim, the leader of the Jumhooree Party (JP, the country's third-largest party and a key member of the ruling coalition), announced on January 18th that his party could contest the parliamentary elections in April 2019 jointly with several other parties.

Analysis

Mr Ibrahim's announcement brings to light a serious rift within the ruling coalition. The Maldivian government is run by a coalition led by the Maldivian Democratic Party (MDP), with which the newly elected president, Ibrahim Mohamed Solih, is affiliated. Mr Ibrahim, who is also the speaker of the People's Majlis (the legislature), was unhappy with the MDP's decision to field candidates in all of the 87 constituencies in the parliamentary polls. For its part, the MDP has asserted that there was no binding agreement among the coalition members to prevent it from doing so. The terms of the coalition agreement, which was signed in March 2017, have not been made public, so it is not possible to assess the claims.

Mr Ibrahim subsequently said on January 20th that he was still ready to work with the MDP if it agrees to honour its commitments under the coalition agreement. We believe that the MDP is likely to make efforts to pacify the JP and ensure that the coalition remains intact. In the event that the coalition breaks down, there is a possibility that the JP might align with the main opposition party, the Progressive Party of Maldives, which is led by the former president, Abdulla Yameen. This would severely damage the MDP's prospects of forming a majority in the legislature, and we expect it to try to avoid such a scenario.

Impact on the forecast

The latest developments support our view that political instability will remain high during the forecast period, particularly in 2019 owing to the parliamentary elections. Despite the recent developments, we retain our forecast that the coalition will not break down and that the MDP will perform strongly in the upcoming election.