Update Country Report Maldives 20 Feb 2019

Event

Following a court order issued on February 18th, a former president, Abdulla Yameen Abdul Gayoom, was arrested on charges of money-laundering. The court has ruled that Mr Yameen is to be kept in custody until the trial is completed.

Analysis

The prosecutor-general has charged Mr Yameen with using SOF Private Limited, a private company, to launder tourism revenue obtained by the state-owned Maldives Marketing and Public Relations Corporation (MMPRC) from leasing islands for hotel and resort development. During the hearing at the Maldives Criminal Court, the prosecutor argued that Mr Yameen should be detained for the duration of the trial because he had attempted to bribe witnesses and to alter the evidence against him. Mr Yameen has denied any wrongdoing in the entire matter. He has also appealed to the High Court against the Criminal Court's order for his arrest.

The development is likely to shake up the political environment ahead of the parliamentary election on April 6th. Despite losing power to Ibrahim Mohamed Solih in the presidential election, Mr Yameen remains an influential figure in domestic politics as leader of the main opposition Progressive Party of the Maldives (PPM). Political instability will remain high ahead of the election and soon after the results are declared as crossparty co-operation arrangements are reworked. This follows a recent rift between members of the ruling coalition that undermined a potential agreement on jointly contesting the polls.

Mr Yameen's arrest is a major blow to the opposition's bid to challenge the parliamentary representation of the ruling coalition. One of Mr Solih's key electoral promises during his presidential campaign was to launch investigations into allegations of corruption against Mr Yameen and his government. The voters are likely to see Mr Yameen's arrest as a partial fulfilment of this pledge, which would enhance the prospects for Mr Solih's Maldivian Democratic Party (MDP) in the upcoming poll.

Impact on the forecast

The development strengthens our forecast that the MDP will perform strongly in the election.