Maldivian foreign policy will continue to be guided by the country's substantial external financing requirements, resulting from a wide deficit on the current account and high levels of external debt, much of which is owed to China. The Maldives' strategic location in the Indian Ocean will continue to attract interest from India and China, which are keen to expand their influence in the region.

The MDP lawmakers will be united in their support for the administration's "India first" foreign policy. India has offered regular fiscal and investment support to the Maldives. It is also operating a US$1.5bn line of credit to fund various projects, including the Greater Malé Connectivity Project, with the aim of matching China's role in the archipelago's infrastructure projects. We expect India to maintain its support for developmental projects in the Maldives, as evidenced by an agreement between the two countries in October 2022 for an additional line of credit worth US$100m. India will remain the first port of call for the Maldivian administration for economic and maritime aid in 2023-24.

By contrast, relations between China and the Maldives, which flourished under the previous administration of Mr Yameen, have had less room to prosper under Mr Solih. A PPM victory in 2023 would therefore also affect the Maldives' foreign relations, with realignment away from India and towards China. This remains outside our forecast, however. In the interim, the free-trade agreement with China that was signed in December 2017 remains in limbo and is unlikely to be implemented in 2023-24.

The US will step up its engagement with the Maldives under its Indo-Pacific strategy, which seeks to limit China's growing influence in the region. This is reflected in the Framework for a Defence and Security Relationship with the US, the Maldives' first military agreement with any country other than India, which was signed in 2020. A US embassy in the Maldives is also slated to open in the first half of 2023.