China-India rivalry in the Maldives

17 June 2011 FDI Team

China and the Maldives first established diplomatic relations in 1972. Since then, relations have gradually developed. More recently, Indian policy analysts referred to China’s soft power rise throughout South Asia as a “creeping expansionism”. They went so far as to accuse China of harboring ambitions to set up a submarine base facility in the Maldives.

For instance, in 2005, Indian commentator, A.B. Mahapatra, asserted that: “China has engineered a manner of a coup by coaxing Maldives’ Abdul Gayoom government to let it establish a base in Marao”.

Marao is one of the largest of the 1192 coral islands grouped into atolls that comprise Maldives and lies 40 km south of Male, the capital.

Scientists warn that global warming is pushing up ocean and sea levels. They fear that most of Maldives will be submerged by year 2040. Marao may be one of the few large islands that may survive.

“And even if it goes under water”, said a naval official, “it will be ideal for submarines.”

In February 2001, a small delegation from Pakistan visited Maldives to boost cultural ties. “The Pakistanis put pressure on Male to facilitate Chinese plans for a naval base,” said an official. “China used Pakistan to play the Islamic card with Maldives. But the Marao base is not expected to be operational until 2010.”

President Gayoom ruled the Maldives for around 30 years. Following his election defeat in November 2008, his successor, President Mohamed Nasheed, has shown greater willingness to accommodate Indian interests.

As reported widely in the Indian media in late 2009, the Maldives acceded to India’s request to deploy 26 coastal radars to monitor its territorial waters.

“India is not trying to influence us. We wanted the radars. A lot of biomass poaching (poaching of fish and corals) happens in the area. So does a lot of illegal commercial fishing,” President Nasheed said.

Latterly, it transpired that India’s coast guard and naval vessels would patrol the Maldives’ territorial waters and exclusive economic zone, and a private Indian company was contracted to refurbish the former British Gan Island air base for use by Indian reconnaissance and surveillance aircraft.

Trade in minerals and energy, worth many billions of dollars annually, passes near the Maldives, which is strategically located astride the major sea lanes in the Indian Ocean. It is hardly surprising therefore that former Indian diplomat Kuldeep Sahdev mentioned: “It is a country of immense strategic importance to us.”

Historically, India has long seen the islands as within its sphere of influence and has sought to underwrite the security of the Maldives.

This was demonstrated in November 1988, when heavily armed ethnic-Tamil militants staged a coup to oust President Gayoom, but were rapidly intercepted and neutralized by expeditionary forces dispatched by India.

More recently, in February 2011, President Nasheed made a tour of India to enhance cooperation in trade, investment and security, and chose to use the opportunity to reiterate his pro-India stance.

“Maintaining balance in the Indian Ocean is very important. There is not enough room in the Indian Ocean for other non-traditional friends,” he said. “We are not receptive to any installation, military or otherwise, in the Indian Ocean, especially from un-traditional friends. The Indian Ocean is the Indian Ocean.”

He added: “India is a better investment destination. It’s far easier to deal with India than with China. We had discussions on the Indian Ocean, piracy, climate change and trade and investment. Piracy is a very important issue for us. We are sitting right in the middle of the Indian Ocean.”

Yet, although India is clearly strategically pre-eminent in the Maldives, China has continued to expand its soft power influence in the archipelago nation. Since the Maldives attained independence in 1965, China has built the country’s Ministry of Foreign Affairs building and also the national museum. More recently,

China formed a Maldives-China Parliamentary Friendship Group and China’s parliament has also set up a focus group, intent on further developing relations. In 2010, bilateral trade between both countries reached US$64 million, a reported increase of nearly 56 percent from 2009.

Concessional loans provided by China, such as to build the 1000 Housing Units Project, have served to further expand goodwill and cooperation. Indeed, in 2010 some 117 Maldivian expatriates were reportedly studying in China, and over 120,000 Chinese tourists visited the Maldives, making China the largest source of tourists for the Maldives. Similarly, during the same year China and the Maldives signed a number of cooperation agreements, including in culture, education and sport.

Given the economic benefits of its association with China, regardless of current strategic imperatives vis-à-vis the rivalry between China, India and the US, the Maldives will continue to be reliant on China’s investment, trade and goodwill, even though India has also sought to enhance its investment, trade and economic assistance to the island-nation.

Hence, the visit of Wu Bangguo is likely to make India increasingly anxious about China’s growing soft power influence.

“This is the highest-ranking visit from China to Maldives. This visit is therefore very symbolic,” said Abdulla Shahid, the speaker of the Maldivian People’s Majlis.

Indeed, the implications of China’s growing soft power influence are likely to be critical considerations for India, especially when President Nasheed goes to the polls in the upcoming 2013 presidential election.

The Jakarta Post

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