Update Country Report Maldives 12 Apr 2019

The Maldivian Democratic Party (MDP) of the president, Ibrahim Mohamed Solih, has secured an almost three-quarters majority in the People's Majlis (the legislature) following the election on April 6th. The MDP now controls the presidency and the legislature, which will aid political effectiveness and ensure smooth policymaking. We believe that political stability will thus be enhanced by the party's massive electoral victory. However, the greatly reduced parliamentary representation of the other major parties will push them to work together to challenge the MDP's rise. Meanwhile, internal tensions within the ruling party are set to intensify.

In the parliamentary election held on April 6th the MDP emerged as the single largest party in the Majlis, securing 65 of the 87 seats. As The Economist Intelligence Unit had anticipated, the wave in favour of Mr Solih that became apparent during the presidential polls in September 2018 helped his party to perform strongly in the legislative election. The main opposition Progressive Party of Maldives (PPM), led by a former president, Abdulla Yameen Abdul Gayoom, managed to win only five seats-a sharp decline from the 33 seats it won in the previous election in March 2014.

Similarly, the country's third-largest party (and a key member of the ruling coalition), the Jumhooree Party (JP), also won only five seats, one-third of its tally in the 2014 polls. The newly formed People's National Congress, which was founded in January 2019 with Mr Yameen's backing and is allied to the PPM, secured three seats. The Maldives Development Alliance won two seats and the remaining seven seats were secured by independent candidates.

Down and dusted

The PPM's weak electoral performance was broadly in line with Mr Yameen's waning popularity among voters; this was evident in the presidential election, which Mr Solih won by a healthy margin. Mr Yameen's administration had been criticised by the MDP for the closeness of the ties with China that it bullt during his presidential term (2013-18) and for undertaking large infrastructure projects funded by Chinese loans, sharply increasing the level of public debt.

Moreover, the PPM's recent parliamentary election campaign was undermined by allegations of corruption against Mr Yameen, relating to his presidency, which led to his arrest on February 18th. He was released on March 29th following a court order that there was insufficient evidence against him to detain him beyond a month. However, by then it was too late for him to revive the PPM's deteriorating electoral prospects.

An unhappy marriage

The JP's poor performance in the polls will raise tensions between the coalition partners, putting the party's future in the government in jeopardy. The JP and the MDP disagreed over seat-sharing arrangements ahead of the vote, and the rift is likely to re-open in light of the former's electoral losses. Following its inability to persuade the MDP to back down from fielding candidates in all of the country's constituencies, the JP instead reached a seat-sharing agreement with the PPM ahead of the election, and only contested 41 constituencies.

Although Mr Solih has said that the coalition will remain in place, our core expectation is that it will fall apart within our forecast period (2019-20). The JP co-operated with the PPM before the election, and it is now more likely that it will join hands with the PPM in opposition than accept a diminished role in the coalition. The MDP would also be relieved to see the JP leave the government, rather than being forced to make concessions to it under the coalition agreement for the sake of the relatively insignificant five seats that the party brings to the table. The MDP-dominated government now has more than enough support of its own to pass legislation in the Majlis, and does not need to rely on any other party for support. The coalition's breakdown will therefore not have a significant impact on the stability of the government.

Two swords in one sheath

The former president and leader of the MDP, Mohamed Nasheed (who went into exile in 2015 during Mr Yameen's presidency), will return to the legislature after a winning a newly formed constituency in the capital, Malé. In Mr Nasheed's absence, Mr Solih successfully contested the presidential election as the MDP's candidate, after which Mr Nasheed returned to the country in November 2018. However, the former president's return to active politics increases the risk of political in-fighting within the MDP, as he is unlikely to be comfortable with serving a secondary role in Mr Solih's administration.

For now, the two MDP leaders have put up a united front before the public, promising to capitalise on the overwhelming vote in favour of their party to work towards fixing the socioeconomic woes that their administration has inherited from that of Mr Yameen. The MDP now controls both the presidency and the legislature, which will aid political effectiveness and allow smooth functioning of the government. We believe that political stability will be enhanced in the absence of any formidable opposition to the ruling MDP, but the danger of factional splits within the party will remain a risk.