Gunjan Singh, Research Associate, Institute of Chinese Studies

The results of the recent election in Maldives are an indication that a major challenge to the Chinese Belt and Road Initiative is emerging from the vicissitudes of domestic politics in BRI partner nations.The victory of Ibrahim Mohamed Solih of the Maldivian Democratic Party (MDP) in the island nation’s presidential election reiterates the fact that there is something very wrong with the direction of Chinese investment. In the last few years there has been a rise in sentiment against Chinese investment in the countries where the BRI is in play.

The election also strengthens the impression that in the South Asian region, China will have to work at multiple levels to counter Indian influence. Beijing cannot undermine Indian influence by just pumping in money. The prominent examples of this are Sri Lanka, Malaysia and now Maldives.The general conclusion after the Maldivian election has been that there has been a shift from a pro-Chinese government to one that will favor India. But the question that needs to be pondered is whether the election results have any larger geopolitical connotations or are just an expression of domestic unease and growing concerns of sovereignty.

As has been obvious from the Sri Lankan experience, most of the proposed projects by the Chinese government under the presidency of Mahinda Rajapaksa went on as planned under his successor Maithripala Sirisena as well. There was hope in some quarters that the Sirisena government would put a hold on the projects, but what finally ensued was the handing over of Hambantota Port to a Chinese company for a 99-year period. Only time will tell the direction and the outcomes of Chinese investment under the current Maldivian leader

The relationship between China and Maldives picked up momentum after Chinese President Xi Jinping’s visit in 2014. By now, Maldives is already in debt of US$1.3 billion to the Chinese. The previous leader Abdulla Yameen even modified the constitution to make it easier for Chinese companies to own land where the investments were higher than $1 billion. China has invested in a large number of infrastructure projects, such as the construction of the link between Maldives International Airport and the capital city Malé. Former Maldivian president Mohamed Nasheed claimed that China had leased around 16 of the country’s 1,192 islets for infrastructure and port building activities.

But it’s not just hard investment, as China is also the country’s largest source of tourists. Last year around 300,000 Chinese visited Maldives. China has also been keen to develop a port in Maldives, while around 70% of Maldives foreign debt is owed to China. There are reports suggesting that Maldives has leased out the island of Feydhoo Finolhu for tourism purposes to China for five decades. China and Maldives also have a free-trade agreement. China achieved all this in less than six years. It opened an embassy in Maldives in 2012.

In contrast, the relationship between India and Maldives during the last six years became increasingly difficult under Abdulla Yameen. India’s pro-democracy stance and the ongoing state of emergency in Maldives further affected the worsening relationship. It appeared that Yameen was comfortable “annoying” New Delhi because of the investments and money flowing from Beijing. He appeared to be motivated with the notion that Beijing would continue to support him. It was no surprise, then, that Indian Prime Minister Narendra Modi had to cancel a scheduled state visit to Maldives. The Maldivian government had also been pushing for the withdrawal of helicopters and Indian Army personnel, arguing that the country did not need outside help any more for emergency medical and evacuation operations.

There was also a diplomatic row between the two countries because the Maldivian government had declined to renew work visas for almost 2,000 Indians. The Indian government’s issuing of an advisory warning tourists against traveling to Maldives greatly affected the number of Indians visiting the country.

The contrast between the bilateral relations between China and Maldives and those with India cannot be grimmer. Yameen had directed his focused attention toward Beijing hoping to be able to counter his domestic political challenges with the Chinese investments. Maldives joined the BRI and gave a free hand to Chinese investment plans. However, changing regional politics coupled with the domestic concerns of a “debt trap” altered his dreams.

The example of smaller countries being indirectly forced to compromise on their sovereignty has become a growing challenge for China and its BRI. With this backdrop the Maldivian election should be perceived more as a domestic reaction to unchecked Chinese investments rather than a geopolitical game between India and China.

The geographical reality of Maldives being in between the spheres of two large neighbors cannot be changed, but it appears that the new leader will have to balance on a fine tightrope between India and China. It appears that it will be difficult for him to ignore the ongoing Chinese investments. But for a small country like Maldives, India appears to be the only credible counter to balance the aggressive push from Beijing. The geo-strategic underpinning of the BRI continues to overshadow the economic benefits for the smaller partner nations.

This blog was originally published online on Asia Times on 3 October 2018