Amid tensions with New Delhi over his ministers’ comments against Prime Minister Narendra Modi, Maldives President Mohamed Muizzu arrived in China on Monday. Muizzu, who came to power last year on the plank of an anti-India campaign, is pro-China. Soon after taking over as President, Muizzu formally requested New Delhi to withdraw its military personnel from the island country – whose location in the Indian Ocean makes it strategically important to India. China too wants the country under its sphere of influence. Muizzu has arrived in China at the invitation of Chinese President Xi Jinping. While Muizzu is there in China, many have warned him of China’s debt-trap policy, saying Male should know what happened to Sri Lanka which also relied heavily on Beijing for money but ultimately had to pay badly.
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Derek J Grossman, national security and Indo-Pacific analyst, said Maldives’ relationship with India has been deteriorating since Muizzu came to power. He listed Muizzu’s first move against India immediately after taking over as President, which was to ask Indian troops to withdraw from Maldives. After that, the Maldivian President chose to visit China instead of India, as was the tradition in the past. Many saw this move as a snub to New Delhi.
Prabhat Chaturvedi, an angel investor and CEO, said that intelligent people and countries learn from others’ mistakes. “But fools want to still try it themselves. He said the Maldives would do well to stay away from the debt trap of China, for which the key requirement is corrupt leaders. “Learn from Sri Lanka and Africa.”
China’s debt-trap policy refers to a lending practice with opaque terms and conditions and higher interest rates, which makes it almost impossible for the borrowing country to pay back the loans. It enables China to take control of the strategic assets of the borrowing nation. In 2017, Sri Lanka had to give control of Hambantota Port to a Chinese firm as it could not pay back the loan.
The debt-trap warning for Maldives has grown as Male too has taken massive loans from China. The China Development Bank, the Industrial and Commercial Bank of China, and the Export-Import Bank of China hold over 60 per cent of Maldives’ sovereign debt, said the Observer Research Foundation (ORF) published in November 2023.
The IMF in November 2023 said that the debt-carrying capacity of the Maldives remained weak and the island country was at a high risk of external debt distress. “Maldives’ total debt is set to remain high at over 115% of GDP,” said another report by the World Bank in October 2023. “To ensure fiscal sustainability, Maldives needs to better manage spending while boosting revenue.”
Maldives’ major source of revenue is tourism, but that is likely to take a hit after Indians have taken a strong view of Maldives ministers’ comments against India. Many Indians have said they will now explore the Indian islands and won’t visit Maldives. This may impact Maldives’ tourism revenue as Indians have been the top visitors to the island country.
Flight lieutenant (retd) Anoop Verma thanked President Muizzu for his open inclination toward China and for “pushing Maldives into China’s world-known debt trap”. He said Muizzu’s move had brought political backstabbing of Maldives into the limelight of 1.4 billion Indians. “In turn, Indians have now taken a pledge to make Lakshadweep a world-class tourist destination as an alternative to Maldives tourism immediately,” he said.
The retired air force officer said Indians will continue to thank Muizzu for this clarity. “Maldivians will now write your name in history and remember you as a leader who destroyed the Maldivian economy forever. You started ‘India Out’, We will finish it as ‘Maldives Out’,” he said, referring to Muizzu’s campaign where he was seen wearing a T-shirt with ‘India Out’ written on it.
Jayaprasad, former pro-vice-chancellor at the Central University of Kerala and currently professor of politics and international relations, said China’s “Debt Trap” policy creating both economic and political problems for all neighbours of India, including Maldives, Sri Lanka, Pakistan, Taliban Afghanistan, Nepal Myanmar, and Bangladesh.”
As the Maldivian President arrives in China, Midhuam Saud, a global affairs watcher, said that five years had gone by without any significant Chinese projects in Maldives. He said he hopes the president can secure more finances from Beijing at a better rate, especially for housing.
Reacting to this, Vikas, a blogger and artist, said pretty soon Maldives will be in the same debt trap as Pakistan, Nepal, Sri Lanka, and the African nations. In another tweet, he asked one Maldivian person to ask Nepal and Sri Lanka whose ports and assets are now under China’s control. He said Pakistan, the best friend of China, is mortgaging assets to repay CPEC debt. “That’s exactly what Maldives signed up for with China no sympathies. Disaster will strike soon enjoy it.”
