Where are Maldives’ politics and development headed?

Back from a recent trip to the Maldives, Muhammad Fouzul Kabir Khan wrote in Prothom Alo about his experience there. In this second part, he discusses Maldives’ development roadmap, the expansion of its tourism, economy and politics.

Maldives is the ultimate holiday resort for the wealthy of the worldReuters

In reference to my first piece about the Maldives, certain interested readers asked how the Maldives had developed, and how tourism has flourished there. During my stay there, I spoke about both the issues with the state minster of the last government, presently the chief executive of The Happiness Club, Mohammad Shihab and Maldives Islamic Bank’s young banker Zia (incidentally my nephew Maruf’s colleague and friend). Let me recount their deliberations.

Development roadmap

In my previous piece I wrote about the inclusive development in the Maldives, particularly the lower income disparity. Two factors were at work here. One – the spread of education.  Former state minister Shihab referred to his government’s expansion of free higher education. Alongside providing free higher education in the government educational institutions, financial subsidy is also provided to public and private higher education institutions for this purpose.

Two – the government’s minimum wage law and equal sharing of service charges. The present minimum wage of the Maldives is 5,700 rufiyaa (369 US dollars), in government service it is 7000 rufiyaa (456 US dollars), mid-level business companies 8000 rufiyaa (518 dollars) and large business companies 10,200 rufiyaa (660 dollars). The very small businesses have been kept out of the wage structure. The service charges at the resorts have been fixed at 10 per cent, which is shared by all, from the manager to the cleaners, equally. That is why a Bangladeshi who has been working for long in a resort there told me confidentially that he was earning as much as anyone in Europe of America.

The island state Maldives first developed its harbours. Boulders were thrown into rivers to control the ocean waves. Physical infrastructure was set up in all the islands to facilitate vessels. These vessels are presently being built in the Maldives jointly with the United Arab Emirates. Arrangements are being made so that it is possible to travel every day to even the remotest island. Ferries have been introduced to transport cars and cargo.

There are power, sanitation and drinking water facilities in each and every island. The roads on the island are all concrete and carpeted. The private sector has been attached to the water transport sector. They are provided subsidy for the purpose. Later, with Chinese assistance, they constructed bridges and roads to link Male, Hulhumale and Velena airports. Overall, an environment conducive to local and foreign business and investment has been created in the islands.

Growth of tourism

Now to the second point of readers’ interest. The major tourism resources of the Maldives are its blue water, coral beneath the ocean, and its profusion of flora and fauna. Maldives has preserved its environment. We too had rivers and ocean resources. We have almost entirely destroyed these resources through erroneous policies, unplanned development, excessive greed and shortsightedness.

Maldives is no cheap tourist destination. One can visit the other countries in this region at almost half the cost. The Maldives has to import almost everything. Construction costs are high and that is why everything is costly. But money spent for tourism is well recovered.

Let me give an example. We took a half-day trip from Maafushi, costing 35 US dollars. This included snorkeling at Biyadhoo Reef, dolphin sighting, and touring the Gulhi island. This also included around three hours travel by speedboat, snorkeling training, lunch and drinks, all the necessary equipment and life vests, towels, umbrellas and personalized pictures of the coral and fishes seen under the ocean.

Due to age and physical limitations, we couldn’t fully enjoy the facilities for underwater viewing of the sea life. The younger travellers who did take the dive, described this as a once-in-a-lifetime experience. In Hawaii, you can’t get a similar trip for even 100 US dollars.

You feel completely safe and secure in the Maldives. Everyone makes you feel welcome. There are no hawkers or agents trying to force you buy something or the other. No hotel owners of managers try to exploit you. I did not see police out in the open in the Maldives and its islands, though it is evident that they are active. I saw a large prison on the small island of Maafushi.

Rather than wasting money on so-called mega projects, even if a fraction of the money was spent on Bangladesh’s coastal areas to build up an integrated development project like the Maldives, this will benefit the people and open up a new horizon for tourism. Bangladesh can learn lessons from the Maldives.

Maldives' economic management

Maldives' economic management is certainly tough. Its dependence on imports and scarcity of local resources has made the country dependent on local and foreign loans. Its tax-GDP ratio is 17.7 per cent (10 times higher than that of Bangladesh), but it has a small tax base. And with extensive subsidies to the education and health sectors, its budget deficit in 2023 was 13.8 per cent of the GDP. The country has to take foreign loans at high interest to meet its development costs.

In recent times, tensions have grown in relations between the Maldives and India. Relations between the two countries took a nose dive ever since Mohamed Muizzu took over as president in November 2023. Ibrahim Mohamed Solih was the president before him. The government back then had followed the 'India First' policy

In 2022, Maldives' total foreign loans totalled 4 billion US dollars, that is, 188 per cent of its GDP. And 25.2 per cent of this is from Maldives largest single lender, the Export-Import Bank of China. The International Monetary Fund recently cautioned the Maldives about its steadily increasing foreign debt and advised it to take up policy reforms. A positive side of Maldives' economic management is low inflation. In the span from 1986 to 2024, its average rate of inflation has been 4.93 per cent.

Climate change

The Maldives is in the forefront of countries harmed by climate change. The World Bank has expressed its apprehension that by the year 2100 the sea level will rise there by 10 to 100cm. The entire country may be inundated and the islands may become uninhabitable. This will damage the underwater coral, plant life and biodiversity. The top level of the country is aware of the matter.

In 2009, eleven cabinet ministers including the president at the time, Mohamed Nasheed, donned scuba gear and held the cabinet meeting 4 metres under water. The country is adopting all sorts of measures to create a climate fund to tackle the impact of climate change.

The general people of the Maldives are not too concerned about climate change. They do not believe the World Bank's forecast. They say that they have grown up with the sea. No matter how much climate may change, they will adapt and battle with nature to remain in the Maldives. Former state minister Shihab echoed their sentiment.

'India First' versus 'India Out'

In recent times, tensions have grown in relations between the Maldives and India. Relations between the two countries took a nose down ever since Mohamed Muizzu took over as president in November 2023. Ibrahim Mohamed Solih was the president before him. The government back then had followed the 'India First' policy.

Mohamed Muizzu, on the other hand, contested in the elections with the 'India Out' slogan. After he won the elections, the distance between the two countries grew. Muizzu is regarded as a man close to China.

I found the people of Maldives to have deep faith in Islam and practice the religion, but they were not overly conservative. Their anti-Indian stance has nothing to do with religion. I found three reasons behind their anti-Indian stance.

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One - the people of the Maldives were not happy with the subservience towards India of the previous governments including that of Ibrahim Solih.

Two - India's right-wing social media and BJP term the Muizzu government as China's puppet government. The patriotic residents of the Maldives gave a counter reply and this was joined by three senior officials of the government. They criticised Narendra Modi. The Maldives government did, however, fire these officials.

Three - the Kashmir issue and the repression of Muslims in India deeply affected the people of Maldives. Even the pro-Indian Solih government's former state minister Shihab criticised his government's policy to appease India and the repression of Indian Muslims during Modi's rule.

May the tropical paradise of the Maldives surge ahead, overcoming all economic, social and diplomatic problems. On that note, keep the Maldives on the top of your travel list. I am certain you will thank me for this bit of advice at the end of your trip!  

Reason behind the 'India Out' movement

There were three reasons behind the 'India Out' movement in the Maldives. One - India's efforts to spread its influence on the Maldives and its competition with China. Two - competition between Indian and Chinese businesses over Maldives' development projects. Three - the signing of secret and unequal agreements with the Maldives government.

The unequal agreements may be mentioned here. One - India tried to take control of the Maldives' maritime territory, ports and harbours in the name of carrying out a hydrographic survey, which the people of Maldives felt was a security threat. Two - the deployment of Indian troops ostensibly for the supply of Dornier aircraft was eyed by the Maldivians as an Indian ploy to impose its expansionist ambitions there. Three - the UTF agreement under which India purportedly wanted to control the Maldives' defence forces.

Also, in their efforts to control business in the Maldives, the Indians behaved in a discriminatory manner with the Maldivians. For example, the Maldives government had given the Indian company GMR the contract to develop and operate the Male International Airport. They imposed a development fee on the residents of the Maldives.

The local media revealed these top secret deals. The people broke out in protest in the social media including X (formerly Twitter). The 'India Out' movement, despite suppression and repression and despite the movement being declared illegal, gained momentum. As a result, the pro-India president Mohamed Solih was defeated and replaced by Mohamed Muizzu. Later Muizzu and his coalition partners also won the parliament election.

The days ahead

The Maldives political leadership is both nationalist and pragmatic. The Muizzu government claims that the Indian troops have been withdrawn. Maldives' foreign minister Moosa Zameer has gone to India to normalise relations. In order to decrease singular dependence on China, the Maldives is making an effort to step up relations with Turkey, Saudi Arabia, the United Arab Emirates and other Muslim countries.

We too want normalcy to return to relations between neighbouring countries Maldives and India. For that, India must refrain from influencing Maldives' elections, installing a government of their liking in power, removing the government they do not like from power, and from interfering in the government's functioning.

Rather than diplomacy of force, India should return to the five-principle roadmap of the Gujral Doctrine regarding relations with its neighbours. That would be the best way for India to protect its interests in its neighbouring countries. And the government and people of the Maldives must also halt their anti-Indian bluster, and set up balanced relations with China and India.

May the tropical paradise of the Maldives surge ahead, overcoming all economic, social and diplomatic problems. On that note, keep the Maldives on the top of your travel list. I am certain you will thank me for this bit of advice at the end of your trip!                         

* Muhammad Fouzul Kabir Khan is former secretary and economist

* This column appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir

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