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 means that it will continue to garner interest from India and China, which are keen to expand their influence in the region.

Despite being divided over matters of corruption and religious extremism, the MDP lawmakers are united in their support for the administration's "India first" foreign policy. India has offered regular fiscal and investment support to the Maldives, and emerged as the main source of tourism for the country in 2021-22. 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 remain the first port of call for the Maldivian administration for economic and maritime aid in 2022-23.

By contrast, relations between China and the Maldives, which flourished under the 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 under Mr Yameen's presidency. 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 2022-23.

Under its Indo-Pacific strategy, which seeks to limit China's growing influence in the region, the US will increase its engagement with the Maldives (and other small nations in South Asia). This is reflected in the Framework for a Defence and Security Relationship with the US, the country's first military agreement with any country other than India, which was signed in 2020. The US government has also announced its plan to open an embassy in the Maldives, but a timeline has yet to materialise. Notably, the Indian government has welcomed closer US-Maldives relations, in sharp contrast to its stance in 2013, when it blocked Mr Nasheed's plans to sign a Status of Forces Agreement with the US.