Update Country Report Maldives 23 Nov 2021

Event

In a statement released in mid-November, the Maldivian government issued reassurance that it continues to see India as an important ally. This was in response to the "India Out" campaign that is spreading online, alleging that bilateral defence co-operation between the two countries undermines the Maldives' national sovereignty.

Analysis

Although the ruling Maldivian Democratic Party has been facing factional divisions over matters of corruption and extremism, party members are united in their support for the maintenance of close relations with India. The government has strongly rejected the campaign as "misguided" and believes that it is not representative of general sentiment but rather an attempt by interest groups to unravel cordial ties between the two countries. EIU maintains its view that the Maldivian administration will continue to thwart sporadic bursts of anti-India media coverage, as it regards India as its closest ally.

The "India Out" campaign has emerged periodically in local media around the announcement of India-funded projects, including the police academy in southern Addu and the Thilamalé sea bridge, but has failed to gain traction. Regular fiscal and investment support, large tourism inflows and co-operation in maritime trade have overshadowed attempts to raise security concerns over growing defence co-operation between the two countries.

The latest campaign began in October, when the opposition Progressive Party of the Maldives (PPM) held an "India Military Out" rally in the capital, Malé, protesting against what it claims foreshadows an Indian military presence in the country. It was organised on the occasion of a parliamentary session during which the government presented to the national security committee its Uthuru Thilafalhu (UTF) agreement with India, which involves the construction of a naval harbour for the Maldivian defence forces funded by a US$50m line of credit. This was done to clarify that the agreement does not endanger the sovereignty of the Maldives.

The PPM had also protested against the signing of the UTF agreement in February, during a two-day visit by India's minister of external affairs, Subrahmanyam Jaishankar. The party has generally been wary of the country's pivot away from China and towards India. That said, the ongoing five-year prison sentence imposed on the PPM's leader, Abdulla Yameen, will prevent him from contesting the 2023 presidential election, weakening the party's prospects for influencing foreign policy.

Impact on the forecast

We maintain our view that ties between India and the Maldives will continue to develop under the current administration.