Home Contact Us  

India & the World - Articles

Print Bookmark Email Facebook Subscribe
#3773, 5 December 2012
Maldives: Indian Investments vis-a-vis Chinese Footprints
N Manoharan
Vivekananda International Foundation
email: mailtomanohar@gmail.com

India was once again caught unawares on 27 November 2012 when Maldives announced the termination of a US$511 million project with the Indian infrastructure company GMR Infrastructure Limited (GIL). On 24 June 2010, the GIL-MAHB (Malaysia Airports Holdings Berhad) consortium with 77 and 23 per cent stakes respectively won the contract to maintain and develop the Ibrahim Nasir International Airport. It was done through a global process of tenders conducted by the International Finance Corporation (IFC). Notably, it had became the single biggest FDI into Maldives, that too at the time of global economic recession. This project that got underway in November 2010 aimed at upgrading, maintaining and operating the existing Airport as well as build a new terminal by 2014. In the process, the aim was to increase the traffic from 2.6 million passengers per annum to over five million.

The Maldivian government under Mohamed Waheed has justified the termination on grounds that “there were many legal, technical and economic issues” which seems to be a lame excuse. If the reason was legal, Maldives would not have much problem in abiding by the Singapore High Court’s stay on the termination. If the reason was technical, the project would not have stayed alive successfully for two full years; even otherwise Waheed, who was the Vice President in Nasheed’s government, and later as President, had enough time to sort it out. If the reason was economic, Malé would have accepted GMR’s offer of waving the US$25 airport development fee for all Maldivians flying out of Maldives.

The island state indeed has every right to take calls on matters that suit its national interests. But, what has annoyed India most is the unprofessionalism displayed by Waheed’s regime on the issue and its disregard to abide by international agreements due to local political considerations. Surprisingly, even Indian Foreign Minister Salman Kurshid’s suggestion to iron out the differences between Malé and GMR through a neutral international expert was not considered by Maldives. Despite injunctive relief, Malé is adamant that its termination was “non-reversible and non-negotiable” and “no such injunction can be issued against a sovereign state.”

As one of the larger donors to Maldives, India is concerned that such thoughtless cancellations would hurt the interests of this atoll state in the long run. The move has already sent negative signals to prospective investors, especially Indian. When Waheed succeeded Nasheed, the first democratically elected president of Maldives, in a bloodless coup this February, New Delhi quickly reached out to him. It looks like the Indian gesture has become thankless now.

However, the fact that fringe groups like Adhaalath Party could dictate terms to the government of Maldives shows that President Waheed is not in control of things. What is more concerning are the anti-Indian sentiments shown by the groups that have been behind the termination of GMR contract. This got India worried on the safety of about 30,000 Indians working presently in Maldives and the state of Indian interests there.

Even more disconcerting is the favourable disposition of these anti-Indian groups towards China that has been desperately looking for a strong foothold in the Indian Ocean region. In a tweet, Adhaalath Party stated that “We would rather give the airport contract to our friends in China.” It further stated, “…the addition of Maldives as a friend [by China] would be a massive blow to future Indian power in this region.” Beijing has for long been building maritime and other linkages with the countries of eastern Africa, Southeast Asia, and South Asia to ensure the security of its sea lanes. These linkages have also doubled up as virtual encircling of India, which some call as the “String of Pearls” construct. Maldives is undoubtedly an important “pearl.” Sino-Maldives interactions have increased in the recent past to the extent of China opening an embassy in Male in 2011. Chinese are amongst the top visitors to Maldives of late. Beijing has evinced keen interest in developing infrastructure in Ihavandhoo, Marao and Maarandhoo Islands of the Maldives.

Perhaps, Maldives finds China much attractive now, but India’s long-term commitment and help in developing the island cannot be undermined. India’s Standby Credit Facility to Maldives runs into millions of dollars. Several state and private Indian institutions have been playing a vital role in the economic and cultural development of Maldives. Above all, it was India that saved Maldives from a mercenary attack in 1988 by promptly dispatching its armed forces (‘Operation Cactus’).

To bring Maldives around on the GMR issue, ideas like suspending economic aid are being floated in India. But, any such move would not work and in fact push Maldives further into Chinese hands. Any punitive measure would also help in strengthening the radical anti-Indian forces in the island. New Delhi should, of course, let Malé know sternly of its disappointments and the costs involved in the long run. At the same time, in the interest of Maldives and in the interest of India-Maldives ties and in the larger interest of regional peace and security, the issue needs to be dealt with a lot of patience. On its part, the Maldivian government, instead of outright rejection, should consider negotiating with GMR and flush out an amicable settlement. Narrow political considerations should not come in the way of bilateral relations and development of the island country.

Print Bookmark Email Facebook Subscribe
IPCS Columnists
Af-Pak Diary
D Suba Chandran
Resetting Kabul-Islamabad Relations: Three Key Issues
Can Pakistan Reset its Relations with Afghanistan?
The New Afghanistan: Four Major Challenges for President Ghani
Big Picture
Prof Varun Sahni
Understanding Democracy and Diversity in J&K
When Xi Met Modi: Juxtaposing China and India
Pakistan?s Tactical Nuclear Weapons: The Inevitability of Instability

Dateline Colombo

Asanga Abeyagoonasekera.
Sri Lanka: Moving Towards a Higher Collective Outcome
The Importance of Electing the Best to our Nation's Parliament
Sri Lanka: Toward a Diaspora Re-Engagement Plan
Dateline Islamabad
Salma Malik
Pakistan's Hurt Locker: What Next?
IPCS Forecast: Pakistan in 2015
India-Pakistan Relations in 2015: Through a Looking Glass
Dhaka Discourse
Prof Delwar Hossain
IPCS Forecast: Bangladesh in 2015
18th SAARC Summit: A Perspective from Bangladesh
Bangladesh in Global Forums: Diplomacy vs. Domestic Politics
Eagle Eye
Prof Chintamani Mahapatra
India-US: Significance of the Second Modi-Obama Meet
Has President Obama Turned Lame Duck?
Modi-Obama Summit: Criticism for Criticism?s Sake?

East Asia Compass
Dr Sandip Mishra
India-Japan-US Trilateral: India?s Policy for the Indo-Pacific
China-South Korea Ties: Implications for the US Pivot to Asia
Many ?Pivots to Asia?: What Does It Mean For Regional Stability?
Himalayan Frontier
Pramod Jaiswal
Nepal?s New Constitution: Instrument towards Peace or Catalyst to Conflict?
IPCS Forecast: Nepal in 2015
Constitution-making: Will Nepal Miss its Second Deadline?

Prof Shankari Sundararaman
IPCS Forecast: Southeast Asia in 2015
Indonesia's Pacific Identity: What Jakarta Must Do in West Papua
Modi in Myanmar: From ?Look East? to ?Act East?
Sushant Sareen
IPCS Forecast: Pakistan in 2015
Islamic State: Prospects in Pakistan
Pakistan: The Futility of Internationalising Kashmir

Looking East
Wasbir Hussain
Myanmar in New Delhi's Naga Riddle
China: ?Peaceful? Display of Military Might
Naga Peace Accord: Need to Reserve Euphoria
Maritime Matters
Vijay Sakhuja
Indian Ocean: Modi on a Maritime Pilgrimage
Indian Ocean: Exploring Maritime Domain Awareness
IPCS Forecast: The Indian Ocean in 2015

Nuke Street
Amb Sheelkant Sharma
US-Russia and Global Nuclear Security: Under a Frosty Spell?
India's Nuclear Capable Cruise Missile: The Nirbhay Test
India-Australia Nuclear Agreement: Bespeaking of a New Age
Red Affairs
Bibhu Prasad
Countering Left Wing Extremism: Failures within Successes
Return of the Native: CPI-Maoist in Kerala
The Rising Civilian Costs of the State-Vs-Extremists Conflict

Regional Economy
Amita Batra
India and the APEC
IPCS Forecast: South Asian Regional Integration
South Asia: Rupee Regionalisation and Intra-regional Trade Enhancement
South Asian Dialectic
PR Chari
Resuming the Indo-Pak Dialogue: Evolving a New Focus
Defence Management in India: An Agenda for Parrikar
Pakistani Taliban and Al Qaeda in Afghanistan: Implications for Asian Security

Spotlight West Asia
Amb Ranjit Gupta
Prime Minister Modi Finally Begins His Interaction with West Asia*
A Potential Indian Role in West Asia?
US-GCC Summit: More Hype than Substance
Strategic Space
Manpreet Sethi
India-Russia Nuclear Vision Statement: See that it Delivers
Global Nuclear Disarmament: The Humanitarian Consequences Route
Nasr: Dangers of Pakistan's Short Range Ballistic Missile

The Strategist
Vice Admiral Vijay Shankar
Jihadi Aggression and Nuclear Deterrence
The Blight of Ambiguity
Falun Gong: The Fear Within

OTHER REGULAR contributors
Gurmeet Kanwal
Harun ur Rashid
N Manoharan
Wasbir Hussain
Rana Banerji
N Manoharan

Ruhee Neog
Teshu Singh
Aparupa Bhattacherjee
Roomana Hukil
Aparupa Bhattacherjee


Browse by Publications

Issue Briefs 
Special Reports 
Research Papers 
Seminar Reports 
Conference Reports 

Browse by Region/Countries

East Asia 
South Asia 
Southeast Asia 
US & South Asia 

Browse by Issues

India & the world  
Naxalite Violence 
Suicide Terrorism 
Peace & Conflict Database 
Article by same Author
India-Maldives Relations: A Tale of Two Concerns

Jamaat-ul-Mujahideen Bangladesh: Designs and Network in India

India-Sri Lanka: Time to Settle the Fishermen Issue

Sri Lanka: A New Base for ISI against India?

Ebola: Concerns for India

Left-wing Extremism 2013: The Threat Continues

Maldives 2013: End of Political Stalemate

CHOGM, India and Sri Lanka: New Delhi’s Missed Opportunities

Sri Lanka: TNA in the Northern Province

Presidential Elections in Maldives: A Pre-Poll Analysis

Indian Mujahideen: After Yasin Bhatkal's Arrest

India and the Peace Process in Sri Lanka: So Close, Yet So Far

Sri Lanka and the 13th Amendment: The Arithmetic of ‘Plus’ and ‘Minus’

Sri Lanka and the 13th Amendment: Reconciling Differing Viewpoints

Naxal Violence: What should be Done to Counter?

Sri Lanka: Third UNHRC Resolution and India’s Dilemma

Hyderabad Terror Attacks: Road-blocks in the National Counter-Terrorism Centre (NCTC)

Maldives: GMR, Nexbis and the Tale of Two Ousters

Mahinda Rajapaksa’s India Visit: Taking the Ties Forward

Sri Lanka: 25 Years After the IPKF

IPCS Debate: The UNHRC Resolution on Sri Lanka

Devolution in Sri Lanka: The Latest Take

‘Taming the Tigers’: Reintegration of Surrendered LTTE Cadres

Fishing in Troubled Waters: Indian Fishermen and India-Sri Lanka Relations

Alternative Strategies for Indo-Sri Lankan Relations: Passenger Ferry Service

Y! MyWeb
Print Bookmark Email Facebook Subscribe
Year 2018
 January  February
 2017  2016  2015  2014  2013  2012  2011  2010
 2009  2008  2007  2006  2005  2004  2003  2002
 2001  2000  1999  1998  1997

The Institute of Peace and Conflict Studies (IPCS) is the premier South Asian think tank which conducts independent research on and provides an in depth analysis of conventional and non-conventional issues related to national and South Asian security including nuclear issues, disarmament, non-proliferation, weapons of mass destruction, the war on terrorism, counter terrorism , strategies security sector reforms, and armed conflict and peace processes in the region.

For those in South Asia and elsewhere, the IPCS website provides a comprehensive analysis of the happenings within India with a special focus on Jammu and Kashmir and Naxalite Violence. Our research promotes greater understanding of India's foreign policy especially India-China relations, India's relations with SAARC countries and South East Asia.

Through close interaction with leading strategic thinkers, former members of the Indian Administrative Service, the Foreign Service and the three wings of the Armed Forces - the Indian Army, Indian Navy, and Indian Air Force, - the academic community as well as the media, the IPCS has contributed considerably to the strategic discourse in India.

Subscribe to Newswire | Site Map
18, Link Road, Jungpura Extension, New Delhi 110014, INDIA.

Tel: 91-11-4100-1902    Email: officemail@ipcs.org

© Copyright 2018, Institute of Peace and Conflict Studies.