On Thursday, the Indian government announced a $500 million package to the Maldives comprised of $100 million in grants and $400 million as a line of credit. This brings India’s total financial assistance to the country to a whopping $2 billion, which is inclusive of loans and projects in the country. India’s Minister of External Affairs, S. Jaishankar, announced the package in a video conference with his counterpart from the Maldives, Abdullah Shahid. The statement by the Indian Ministry of External Affairs said that the announcement was in furtherance of the Greater Male Connectivity Project (GMCP), which aims to create a 6.7 km bridge to improve connectivity to crucial locations in the Maldives. The statement also said that this“will be the largest civilian infrastructure project in Maldives, connecting Male with three neighbouring islands – Villingili, Gulhifahu (where a port is being built under India LoC) and Thilafushi (new industrial zone) – by construction of a bridge-and-causeway link spanning 6.7 km”.
India will fund the implementation of Greater Male Connectivity Project through a $400 mn LOC & $100 mn grant. This 6.7 km bridge project connecting Male with Gulhifalhu Port & Thilafushi industrial zone will help revitalise and transform Maldivian economy. pic.twitter.com/OFClBpVY7l
— Dr. S. Jaishankar (@DrSJaishankar) August 13, 2020
India also recently announced its decision to create an “air travel bubble” starting 18 August with the Maldives to facilitate travel for “employment, tourism, medical emergencies etc”. Following the decision, the MEA released a statement and said, “In keeping with our special ties, Maldives is the first neighbouring country with which an air bubble is being operationalised. The air bubble symbolises India’s support to shore up tourism arrivals and revenues in the Maldives. Health protocols in both countries will be strictly followed.”
Abdullah Shahid thanked India for “including the Maldives among the first countries with which India has established an Air Bubble” and further highlighted the “importance of easing travel, especially for Maldivians seeking to visit India for urgently required medical treatment, as well as Indian tourists wishing to visit the Maldives”. India has also created these travel bubbles with the US, France, the UK, and Germany.
However, both these decisions are seen as a pre-emptive strategy to counter Chinese efforts in the Maldives, which is now more vulnerable to China’s predatory economic policies after the COVID-19 outbreak severely damaged its tourism industry. Even prior to the ongoing pandemic, India was already growing increasingly concerned about China’s growing influence in the Maldives, with ex-President Abdulla Yameen spearheading closer ties with the East Asian giant. During Yameen’s tenure, the Maldives gathered a debt of over $2 billion with China. However, over the past two years, since the election of President Ibrahim Mohamed Solih, India’s relationship with the Maldives has been “reset”. As a result of India’s “Neighbourhood First” policy, India has been working with the Maldives to boost infrastructure and connectivity. Consequently, in June 2019, India announced the commencement of a cargo ferry service, which was seen as an opportunity for India to emerge as the Maldives’ largest partner for trade.
Indian Prime Minister Narendra Modi has repeatedly shown his dedication to strengthening ties with the Maldives. In November 2018, he was the only world leader who attended President Solih’s swearing-in ceremony. Moreover, the Maldives was also the first country Modi visited after his re-election in 2019. After this week’s announcement of the $500 million package, Modi tweeted, “Our special friendship is, and will always remain, as deep as the waters of the Indian Ocean.”
Thank you, President @ibusolih! India will continue to support the Maldives in mitigating the economic impact of the COVID-19 pandemic. Our special friendship is, and will always remain, as deep as the waters of the Indian Ocean. https://t.co/nbKL19hw7P
— Narendra Modi (@narendramodi) August 13, 2020