China and the World

In deep water

Former president predicts trouble in the Maldives


Yameen: closer to China

The prognosis for the Maldives over the next few decades isn’t terrific. If global warming doesn’t see its low-lying archipelago submerged by rising seas, China may end up controlling much of its landmass due to its government’s inability to pay back infrastructure loans to Beijing.

That, at least, is the view of the former president and head of the Maldivian Democratic Party, Mohamed Nasheed.

Nasheed now lives in exile after being ousted in what he calls a coup in 2012. In recent weeks, as the Maldives has descended into another bout of political chaos, he has accused the Chinese of carrying out a “land grab” in his home country.

“Without firing a single shot, China has grabbed more land than the East India Company at the height of the nineteenth century,” he told an audience at a conference in India in February.

Nasheed maintains that 80% of the Maldives’ foreign debt is owed to China. If the Maldives falls behind in repayments, as Sri Lanka did with its loans for the Hambantota Port project, China will ask for control of the land, he predicts.

Nasheed estimates that the Maldives financial obligations to the Chinese for building an airport, bridges and related real estate already amount to as much as $2 billion. And he says failure to pay is inevitable because the Maldivian government makes no more than $100 million a month in revenues.

The Chinese embassy in the capital Malé has refuted Nasheed’s charges and says that Chinese companies invest in “no more than seven tourist islands”.

It provided no details on other projects such as the expansion of the international airport on Hulhulé Island, the ‘China-Maldives Friendship Bridge’ that connects Hulhulé to Malé or the ‘joint ocean observation station’ slated for Makunudhoo island, about 600km off the south coast of India (watch out for a submarine base, the Indian newspapers claim).

Which brings in the other player in this “trouble in paradise” story: the Maldives’ subcontinental neighbour.

Traditionally, the island has been close diplomatically to India, to which its people have ethnic and linguistic ties. Many locals travel to India for higher education and medical care. Until recently India was the Maldives’ main source of military and humanitarian aid.

But in the years since Nasheed was replaced, relations have soured. In 2012 the government cancelled an Indian company’s contract to run the country’s international airport – the largest foreign investment project at the time. Four years later much of the work was awarded to a Chinese company.

The current president Abdulla Yameen declared a state of emergency in early February after the Supreme Court ordered him to reinstate 12 lawmakers, who had been ejected from office. Yameen has also jailed judges and opposition politicians and sacked two police chiefs who didn’t carry out orders.

As countries including the US, the UK and India have criticised Yameen, the Maldives has grown closer to Beijing, similar to the Sri Lankan government when it was accused of war crimes in 2009.

In 2014 Xi Jinping became the first Chinese leader to visit the dispersed island-nation and Yameen signed up to the Belt and Road Initiative. In 2015 the Maldives passed legislation that allowed foreign ownership of land if an investment exceeded $1 billion and last year its parliament approved a 1,000-page Free Trade Agreement with China after less than an hour’s debate.

“[Yameen] has placed the Maldives firmly in the lap of the Chinese. India’s role has been reduced to that of a helpless spectator,” warned an opinion piece on the influential NDTV (New Delhi Television) website this week.

Sino-Indian ties were already strained by last year’s military standoff in the Himalayas near the border with Bhutan (see WiC378). But as the state of emergency rumbles on in the Maldives, Beijing is said to have told New Delhi that the constitutional crisis is an internal matter and other nations should not intervene. Sina then reported that the PLA was sending 11 warships into the East Indian Ocean, although the latest news was that most of the flotilla has turned back into the South China Sea.

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