Maldives’ Turmoil: Muizzu’s Leadership Challenges

The main opposition parties, the Maldivian Democratic Party (MDP) and the Democrats, boycotted the session entirely, citing concerns about the government’s democratic practices. This resulted in an absence of 56 MPs, with 44 belonging to the MDP and 13 from the Democrats. Only 24 MPs were in attendance when the session commenced.

Earlier, on 23, December 2023, the two main opposition parties, the Maldivian Democratic Party (MDP) and The Democrats, in a joint press statement strongly condemned the government’s recent shift towards an “anti-India” foreign policy. They issued a joint statement labelling this move as “extremely detrimental” to the country’s long-term development. They stressed the importance of maintaining good relations with all development partners, especially India, the Maldives’ “most long-standing ally.” Highlighting the interconnectedness of regional security, they stated that “stability and security in the Indian Ocean is vital to the stability and security of the Maldives.” Emphasizing the nation’s historical approach to international relations, both parties urged the government to return to collaborating with all partners, prioritizing the well-being of the Maldivian people. They warned that departing from this established course could jeopardize the country’s stability and progress.

The MDP kept mum on their Parliament boycott rationale while the Democrats objected to the reappointment of three ministers rejected by Parliament earlier. This action follows recent protests against the Muizzu government for its foreign policy shift away from India and towards China. President Muizzu had requested the withdrawal of Indian troops, sparking both domestic and international concerns. Maldivian opposition parties criticized the move as detrimental to long-term development and security, especially considering the subsequent arrival of a Chinese research vessel. The opposition views this move as detrimental to the nation and emphasizes the importance of maintaining partnerships with all development partners for the Maldives” best interests.

The Maldivian fishing industry, a vital contributor to the economy, is at a crossroads. Even as it achieved record fish exports in December 2023, traditional, sustainable practices like pole and line fishing are increasingly replaced by methods like line trolling and deep-sea fishing for higher yields. This, along with climate change, has damaged the marine ecosystem. Additionally, foreign vessels, particularly China’s Distant-Water Fishing fleet, engage in illegal, unreported, and unregulated fishing within the Maldivian Exclusive Economic Zone, further depleting resources. It forced local fishermen to become more dependent on government support and face payment delays, causing financial hardship. Despite government regulations, frustrations grow as China’s influence expands, raising concerns about sovereignty and the long-term well-being of the Maldivian people. It’s crucial for the Maldivian government to prioritize sustainable practices and address the issue of illegal foreign fishing to ensure the future of this vital industry and the livelihoods of its communities.

Earlier in December, 2023, during his first state visit to Beijing, newly elected Maldivian President Mohamed Muizzu upgraded the country’s relationship with China, a move following his campaign rhetoric portraying India as a threat. This strategic shift saw the Maldives sign agreements with China on climate, agriculture, and infrastructure, further solidifying their already significant economic ties. China, the Maldives’ largest creditor, pledged further investment in the archipelago nation through a “comprehensive strategic cooperative partnership.” While Muizzu expressed gratitude for China’s economic contributions, concerns exist about the Maldives’ growing debt to China, already at $1.37 billion, representing 20% of its public debt.

On the other hand, India increased the quantity and degree of financial and other assistance for the Maldives. India’s Ministry of External Affairs (MEA) announced an increased budget allocation for the Maldives, jumping to ₹770.9 crores. The spokesperson of the Ministry emphasized India’s ongoing commitment as a development partner. This news arrives amidst the Maldives’ request for troop withdrawal by May 10th and under a pro-China leadership. Though Indian troops are departing, the MEA assured continued support through “competent Indian technical personnel” managing aviation platforms in the archipelago.

The Maldives, according to the International Monetary Fund (IMF), is in deep financial trouble. Their report warns that the country faces a high risk of defaulting on both its foreign and domestic debts. This warning comes as the Maldives struggles with growing budget shortfalls and mounting public debt.

According to an IMF communications release, an International Monetary Fund (IMF) mission, led by Ms. Piyaporn Sodsriwiboon, visited Malé, the capital of the Maldives between January 24 and February 6, to discuss the country’s economic situation. While did see potential of growth, fuelled by tourism and infrastructure projects, it raised serious concerns about high debt levels and external vulnerabilities.The IMF team its report warns that without policy changes, the Maldives risks debt distress. They recommend tighter fiscal discipline, reduced spending, and increased revenue collection. Additionally, reforms to state-owned enterprises and healthcare are needed.The IMF also advised the Maldives to tighten monetary policy, strengthen financial regulations, and build resilience to climate change.

The Maldives, a nation of 550,000 people, faces a critical economic juncture under President Muizzu. Concerns mount about rising debt, inflation, and deficit spending, in the wake of both external borrowing and domestic overspending. The 2023 economic expansion appears overshadowed by rising living costs and a widening current account deficit.

President Muizzu’s fiscal policies raise questions. While boasting increased tourism, he proposes reforms alongside rising spending, sparking concerns about long-term sustainability. The central bank’s increased exposure to government bonds further highlights economic risks.

Navigating partnerships adds complexity. India, with its emphasis on local employment, stands in contrast to China, whose loans often come with imported labor, potentially harming Maldivian job opportunities. Although warnings exist, China remains the largest bilateral creditor, igniting anxieties about “debt traps” and unsustainable interest payments.

A Chinese research ship arriving in the Maldives in February has only heightened tensions between China, India, and the Maldives. While China claimed the vessel, Xiang Yang Hong 3, is merely stopping for routine resupply, India suspected it might be gathering data for future military use. China dismissed these concerns, asserting the ship’s activities are legitimate scientific research. This isn’t the first time China has sent vessels near Indian waters, setting off competition for influence in the Indian Ocean. Sri Lanka, previously receptive to such visits, recently imposed a one-year moratorium due to India’s objections.

However, the Maldives, strategically located near India, seems unfazed. Its new pro-China president wants to reduce Indian influence and has set a deadline for troop withdrawal. His administration also canceled a hydrographical survey agreement with India and embraced Chinese-funded projects. India, viewing the Maldives as crucial to its security, is alarmed by this shift. China’s potential access to this strategic location raises concerns, leading to a complex geopolitical situation in the region.

Muizzu’s recent shift towards Western nations raises economic concerns. India’s reliable, cost-effective healthcare and development aid could be disrupted, potentially increasing costs and jeopardizing existing networks. In this complex dance, Muizzu’s call for removing “foreign soldiers,” likely aimed at India, casts a shadow on crucial bilateral relations.

On February 2nd, India and the Maldives held a meeting in New Delhi to discuss the sensitive topic of Indian military personnel stationed in the Maldives. However, the two sides released conflicting statements about the outcome. The Indian Ministry of External Affairs (MEA) claimed they found “mutually workable solutions” for Indian aircraft involved in humanitarian and medical evacuations to continue operating. This seemingly implied the personnel issue was resolved. Conversely, the Maldivian press release painted a different picture. They stated that India agreed to withdraw military personnel from one platform by March 10th and fully replace them in all three platforms by May 10th. This presented a more definitive timeline for a complete withdrawal.

Despite political stances, India remains a vital partner for security and finance. Muizzu’s appeal to China for debt restructuring highlights the urgent need for relief, placing the Maldives in a precarious position with high debt distress risk. The global context amplifies anxieties, with Sri Lanka and Pakistan serving as cautionary tales of excessive Chinese investment.

President Muizzu’s leadership faces tough choices. Balancing relations with India and China while navigating debt restructuring will be crucial. Short-term gains must not compromise the long-term stability and sovereignty of the Maldives. Careful navigation, foresight, and prudence are essential to chart a sustainable path forward. President Muizzu’s leadership in the Maldives stands on shaky ground, marked by a dismaying parliamentary turnout, opposition boycotts, and a perilous foreign policy shift towards China. The economic scenario is dire, with the IMF warning of an imminent risk of default, exacerbated by unsustainable fishing practices and illegal foreign fishing. Geopolitically, strained relations with India and a dubious military agreement raise concerns about national security. The president’s bid for Chinese debt restructuring reflects desperation, while his leadership polarizes the nation. In this critical juncture, the Maldives faces an uncertain future, navigating a complex web of challenges that demand urgent, prudent, and strategic solutions. It is no wonder that Muizzu’s leadership has deeply polarized the archipelago’s political community.