Home Contact Us  
   

South Asia - Articles

Print Bookmark Email Facebook Subscribe
#5128, 15 September 2016
 
China Overtaking India in Maldives
Anjelina Patrick
Research Intern, IPCS
 

The amendment allowing land holdings in the Maldives by foreign entities might contribute to the strong hold of the Chinese in the India Ocean Region (IOR) due to its huge investment in infrastructure development. These have the potential to alter the geopolitical calculations in the IOR, especially for India. 

Change in Land Amendment
 
The Maldives, since 2014 has gained strategic salience in light of the Chinese infrastructure development after the visit of  Xi Jinping, the First Chinese President to visit Maldives. 
 
More worryingly for India it is the swiftness by which the Maldivian government has passed the constitutional amendment allowing foreign nations or entities to own land if the total volume of investment excesses USD 1 billion, previously foreign entities could only lease the land for 99 years.  Given the disparities in the spending power of China and India this will certainly play into China’s hands, it must also be noted that the Maldivian government owes 70 per cent of its external debt to China. Abdullah Yameen, current Maldivian President, has been stating that the amendment will boast the Male economy, contrary to what the former President, Mohamad Nasheed asserted about it leading to foreign non-commercial logistical installations in the island.

The exploitation of land ownership rights may also hinder the sovereignty of a country, and while  land grabs are difficult to contemplate in the 21st century, newer and more sophisticated ways of control come about as a result of monopsony. Since India cannot afford to spend on commercially unviable infrastructure projects that show no signs of profitability in the future, Maldives' attempts at playing regional powers off against each other plays into the Chinese monopsony. The Maldivian government is stating that the new law will work in the best interests of the Maldivian citizens by attracting large scale investment, leading to development.

Loss of Contract
 
New Delhi is concerned about the contracts to the Chinese, the first being an expansion of the Male airport worth USD 800 million and second being the tentative victory of a Chinese consortium to build the Gadhoo port, in the Southern Atolls.

The Male Airport contract, initially given to an Indian company, GMR Group, for build-operate was cancelled in 2012 due to a change in the government (earlier headed by President Mohamed Waheed).This was surprising given the contract represented the single largest foreign investment in the Maldives. International arbitration held that the cancellation had been wrongful and awarded crippling damages to GMR worth USD 300 million. Coinciding with the tribunals’ award, it was shortly announced that the Chinese Beijing Urban Construction Group (BUCG) had won the contract to complete the stalled project as build-only. This will exacerbate the land owning situation. Significantly there have been reports that Chinese companies might get the contract for the new commercial port on Gadhoo Island on a build-operate model. 

It can be seen that two different parameters have been adopted in infrastructure investments and such ad hoc shifting of norms from build-operate to a build-only have been done with extreme lack of transparency and public study on the cost benefits. The tussle between the GMR Group and the Maldivian Government had initially started because of the underperforming revenues of the airport. China is footing most of the costs of this resurrected airport expansion plan at a much higher layout than the previous plans which failed to deliver. 

Awarding of the contract to China also highlights the vast spending power and project management skills of Chinese companies compared to Indian ones. Needless to say that in any direct competition between India and China in mega projects, China has a track record of timely and effective delivery contrasted with India’s abysmal performance on the score.
 
India's Concern
 
This brings out several areas of concerns as may be deduced that the current President Yameen’s government is more pro-China indicative of a shift in the Maldivian posture towards India.

As can be seen from the case of Gwadar (Pakistan) and Hambantota (Sri Lanka) China has a track record of building maritime infrastructure in the Indian Ocean for commercial gains; however a lack of commercial viability has then been used by the Chinese to expand their naval presence. These ports are now increasingly used by high threat Chinese power projection vessels such as nuclear submarines. The Gadhoo island port would be another example; while the Maldives is not known to be a commercial hub its economic zone seems unable to sustain such a large port. On the other hand the Maldives is one of the closest islands to the highly secretive US base in Diego Garcia and the Chinese pattern of deploying nuclear submarines in Hambantota to keep tabs on India may be replicated. The Chinese Embassy in Maldives maintains that such allegations of construction in Gadhoo are "completely false."

To conclude it is observed that the Maldivian shift towards China is not only in accordance with its national interest but more importantly due to the pro-Chinese Yameen government. This is highly threatening for India as a huge influx of infrastructural investment by the Chinese in Maldives is more military oriented than economic and in the coming days India might lose its foot hold in Maldives thereby hindering the current geopolitical balance of power in the IOR.

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?

Indo-Pacific
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?
Indus-tan
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

Commentaries 
Issue Briefs 
Special Reports 
Research Papers 
Seminar Reports 
Conference Reports 

Browse by Region/Countries

East Asia 
South Asia 
Southeast Asia 
US & South Asia 
China 
Myanmar 
Afghanistan 
Iran 
Pakistan 
India 
J&K  

Browse by Issues

India & the world  
Indo-Pak 
Military 
Terrorism 
Naxalite Violence 
Nuclear 
Suicide Terrorism 
Peace & Conflict Database 
ADD TO:
Blink
Del.icio.us
Digg
Furl
Google
Simpy
Spurl
Y! MyWeb
Facebook
 
Print Bookmark Email Facebook Subscribe
Year 2018
 January
 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.