Why in news?
The President of Maldives made a three-day visit to India recently.
What are the points of engagement?
- The two countries reiterated their strong commitment to further strengthening and reinvigorating the traditionally strong and friendly relations between them.
- They have also reiterated their commitment to democracy, development and peaceful co-existence.
- Aligning policies - ‘India-First’ Policy has been re-affirmed by Maldives, thus committing to working together closely with India.
- India has announced a financial assistance package of $1.4 billion in the form of budgetary support, currency swap agreements and concessional lines of credit under its 'Neighbourhood-First’ Policy.
- Maritime co-operation - Both sides agreed to strengthen cooperation to enhance maritime security in IOR through coordinated patrolling and aerial surveillance, exchange of information and capacity building.
- Terrorism – Both sides reaffirmed their support for increased cooperation in combating terrorism in all its forms and manifestations both within the region and elsewhere.
- P-2-P relations - The Maldives is one of the very few countries with which India has a visa-free arrangement.
- This is important in facilitating people-to-people exchanges and travel between the two countries.
- Climate change - Both sides agreed on the importance of combating the impact of climate change, especially detrimental to developing countries, and small island developing states.
- They agreed on the need to work towards strengthening the global response to climate change, through the UNFCCC and the Paris Agreement.
- Institutional reform - The voice and participation of developing countries in multilateral financial institutions has to be enhanced.
- Maldives reiterated support for India's candidature for permanent membership of an expanded and reformed UN Security Council.
- It has also supported India's candidature for a non-permanent seat for the year 2020-21.
- Trade - India has noted the expanding opportunities for Indian companies to invest in the Maldives to boost trade ties.
- Areas such as fisheries development, tourism, transportation, connectivity, health, education, information technology, new and renewable energy and communications were earmarked for enhancing bilateral cooperation.
- The two sides also signed four agreements –
- Visa liberalisation for Indian investors
- Cultural cooperation
- IT and electronics cooperation
- Improving the ecosystem for agriculture business.
How does the China factor play a role here?
- The Maldives has maintained a close relationship with China, especially in financial terms, under its previous government.
- It has welcomed Chinese money for major infrastructure projects and has also signed free trade agreement (FTA) with china.
- This has ignored political moderation and closer security ties with India.
- However, it is now estimated that China’s loans to the Maldives total at least $1.3 billion, or a quarter of Maldives’ gross domestic product.
- Hence the new Maldivian government is looking to India for more budgetary support to overcome the crisis and to help meet its development goals.
- Maldives is also planning to revise the FTA with China.
What should be done?
- Apart from the India-First policy of Maldives, China will continue to play an important role as an economic partner.
- However, India’s role will be critical in determining the trajectory of political developments in the Maldives.
- India’s patient handling of the Maldives crisis over the last few years has positioned it well.
- By coordinating its response with other like-minded regional and extra-regional players, India should underscore the options available to the Maldives if it decides to move away from China.
- The more India invests in strengthening democratic institutions in its neighbourhood, the better returns it will get in its foreign policy.
Source: The Hindu, Business Standard
