Asia in Review Archive 2021
Date of AiR edition
23 March 2021
Maldives president meets Emir of Qatar; first since reinstating diplomatic ties
(lm) Indicating a thaw in relations between the Maldives and Qatar, a high-level Maldivian delegation visited the Gulf nation on March 15 – the first since Malé’s decision in January to reinstate full diplomatic relations with Doha [see AiR No. 2, January/2021, 2]. During the working visit, Maldives President Ibrahim Mohammad Solih met with the Emir of Qatar Tamim bin Hamad Al Thani to discuss ways to enhance bilateral relations by strengthening economic cooperation.
Accusing Qatar of being too close to Iran and financing terrorist groups, in June 2017, Saudi Arabia and its allies, the United Arab Emirates (UAE), Bahrain and Egypt had severed ties with Qatar and imposed a naval, air and land blockade on the country. In solidarity with the quartet, the Maldives had followed suit hours after the announcement, giving rise to rumors that the government under then President Abdulla Yameen Abdul Gayoom had been influenced by Riyadh.
2 March 2021
With pacts with Maldives and Mauritius, India seeks to offset Chinese influence in Indian Ocean Region
(lm) India and Mauritius have signed a Comprehensive Economic Cooperation and Partnership Agreement (CEPCA) – New Delhi’s first such agreement with an African country – to provide preferential access to several items that cater to market requirements on both sides. Both countries also signed a $100 million Line of Credit agreement to enable the procurement of defense assets from India. [The Hindu]
Both documents were signed on February 22, the first day of India’s External Affairs Minister S. Jaishankar two-day visit to Mauritius. During his visit, Jaishankar met with high-ranking Maldivian officials, including the president and prime minister Pravind Jugnauth – both of Indian-origin.
The signing of the CEPCA assumes added significance, coming as it does shortly after India signed a $50 million Line of Credit agreement with the Maldives and agreed to develop and maintain a key naval facility for the Maldivian Coast Guard [see AiR No. 8, February/2021, 4].
There is a good case to believe that both events have to be seen against the larger backdrop of the ‘String of Pearls’ theory on potential Chinese government intentions in the Indian Ocean region (IOR). Specifically, it is built upon the assumption that China is aiming to establish a network of commercial and military assets to support Chinese naval operations along the Sea Lane of Communications (SLOCs), which extend from the Chinese mainland to Port Sudan in the Horn of Africa. [South Asia Monitor]
To counter Chinese influence in the IOR, New Delhi has been stepping up efforts to deepen its sot-power bonds with both the Maldives and Mauritius. Both island nations were among the first countries to receive free consignments of Covishield (the local name for the Oxford-AstraZeneca vaccine developed in the United Kingdom), when India first utilized its vast manufacturing capacity to bolster bilateral ties in January [see AiR No. 5, February/2021, 1]
India’s naval footprint in the Indo-Pacific has also been boosted by growing ties with France, which enjoys basing rights in Réunion, an Indian Ocean island in East Africa. Last year, the navies of both countries for the first time conducted joint patrols from the small island nation, signaling New Delhi’s intent to expand its footprint in the stretch between the East African coastline and the Strait of Malacca.
23 February 2021
India continues engagement with Maldives, signs $50 million Line of Credit
(lm) Indicating deepening security cooperation, India and the Maldives have signed a $50 million Line of Credit agreement and agreed to develop and maintain a key naval facility for the Maldivian Coast Guard. Both documents were signed on February 21, the second and final day of India’s External Affairs Minister S. Jaishankar visit to the Maldives. Five other agreements, including one for a $25-million Line of Credit for the development of roads, were signed the previous day. [mint] [The Hindu] [Hindustan Times]
During his visit, Jaishankar also promised that India would strongly support the candidature of Maldives’ Foreign Minister Abdulla Shahid for President of the 76th session of the UN General Assembly next year.
Jaishankar also said that India would like to work with the Maldives during its membership of the United Nations Security Council for 2021-22.
To counter China ’s growing financial footprint in South Asia, New Delhi has provided a host of support measures to the Maldives since the outbreak of the COVID-19 pandemic, injecting more than $2 billion trough loans, grants, credit lines and currency swaps [see e.g. AiR No. 33, August/2020, 3, AiR No. 38, September/2020, 4]. What is more, the archipelagic state was the first country to receive free consignments of Covishield (the local name for the Oxford-AstraZeneca vaccine developed in the United Kingdom), when India first utilized its vast manufacturing capacity to bolster bilateral ties in January. [see AiR No. 5, February/2021, 1]
16 February 2021
Maldives, Bangladesh sign two Memoranda of Understanding
(lm) During a visit of Maldivian Foreign Minister Abdulla Shahid to Bangladesh last week, both countries signed two Memoranda of Understanding (MoU) pertaining to the recruitment of manpower and the training of foreign service officers. [Dhaka Tribune]
The two South Asian nations further agreed to establish two regular consultation mechanisms to boost cooperation on trade and business, in addition to a direct shipping line. The two mechanisms include a joint commission for comprehensive cooperation led by the respective foreign ministers and annual foreign office consultations led by the respective foreign secretaries. [The Daily Star]
2 February 2021
Maldives, China revive bilateral talks
(lm) On January 26, Maldivian Foreign Minister Ahmed Khaleel via video link co-hosted the 7th round of China-Maldives diplomatic consultations with China’s vice foreign minister. The meeting comes after Khaleel together with the country’s finance minister last November met with China’s envoy to the Maldives to talk about economic recovery and development cooperation. [Ministry of Foreign Affairs of the People’s Republic of China] [raajjee.mv]
Ongoing talks between China and the Maldives come at a time, when Male is said of have been drawn deep into China’s so-called debt-trap diplomacy, as the country is estimated to have accumulated $1.5 billion in debt to Beijing, equivalent to 45 percent of the island nation’s national debt. China has already reduced this year’s loan repayment to $75 million from the scheduled $100 million under the G20 ‘Debt Service Suspension Initiative’, and agreed to partially suspend debt repayment applicable to $600 million in loans for a period of approximately four years [see AiR No. 44, November/2020, 1].
The majority of these loan agreements were signed during the five-year tenure of now-incarcerated president Abdulla Yameen. At the time, China was embarking on its grand Belt and Road Initiative (BRI) and therefore, financed several major projects between 2013 and 2018 [see e.g., AiR No. 39, September/2019, 4].
26 January 2021
Maldives: Parliament passes bill to allow for elections during health emergency
(lm) The Maldives parliament on January 19 passed an amendment to the “Special Bill for the Local Council Elections 2020”, paving the way for the country’s Election Commission (EC) to hold local council elections amid the state of public emergency. The same day, a civil court quashed a petition filed by opposition lawmakers demanding directions to the government for equal opportunity for campaigning. [South Asia Monitor]
Originally slated for April last year, the local elections got postponed indefinitely in May, after a State of Public Health Emergency was declared in the face of the global COVID-19 pandemic. Shortly thereafter, President Ibrahim Mohamed Solih ratified an amendment to Article 231 of the Constitution, extending the terms of incumbent councilors. He also ratified legislation delineating the powers of council members who remained in office during the interim period to allow for the continued functioning of a decentralized government. [AiR No. 2, January/2021, 2]
Prior to the parliamentary session, the EC on January 20 revealed that it required an additional $3.3 million to hold the local council elections in line with the Health Protection Agency (HPA)’s guidelines. [The Edition]
19 January 2021
China in the “U.S. Strategic Framework for the Indo-Pacific”
(dql) Shortly before Joe Biden will be sworn in as US President in this week, the Trump administration declassified and published the “U.S. Strategic Framework for the Indo-Pacific”, approved by President Trump in 2018 and stamped secret and not for release to foreign nationals until 2043.
The 10-page national security strategy paper identifies maintaining “U.S. strategic primacy over the Indo-Pacific region,” and promoting “a liberal economic order, while preventing China from establishing new, illiberal spheres of influence and cultivating areas of cooperation to promote regional peace and prosperity” one of three national security challenges, along with North Korea’s threat to the US and its allies as well as the advancement of US global economic leadership.
Furthermore, the document assumes that the “[s]trategic competition between the United States and China will persists,” with China “circumvent[ing] international norms and rules to gain advantage,” and seeking to “dissolve U.S. alliances and partnerships,” in order to “exploit vacuums and opportunities created by these diminished bonds.”
As an desired outcome with regards to China, the “United States and its partners on every continent” shall become “resistant to Chinese activities aimed at undermining their sovereignty, including through covert or coercive influence.” [White House, USA]
For a concise assessment of what has been achieved under this strategic framework, see Grant Newsham in [Asia Times] who argues that “Trump and his staff are handing off to Joseph Biden an Indo-Pacific that is better off than it was in 2017.
19 January 2021
Chinese envoy meets Maldives Foreign Minister Abdullah Sahid
China’s ambassador to the Maldives has met with Maldivian Foreign Minister Abdullah Sahid to discuss ways for enhanced and closer corporation between two countries in 2021. [South Asia Monitor]
As the country has so far been unable to offset the impact of the drastic reduction in tourism activity caused by the coronavirus pandemic, Malé is currently seeking a loan restructuring from Beijing. Beijing has already reduced last year’s loan repayment to $75 million from the scheduled $100 million under the G20 ‘Debt Service Suspension Initiative’, and agreed to partially suspend debt repayment applicable to $600 million in loans for a period of approximately four years [see AiR No. 44, November/2020, 1]. Earlier last month, China then agreed to defer repayment for loans which were secured via state-owned companies [see AiR No. 49, December/2020, 2].
12 January 2021
Maldives: Extraordinary session of Parliament scheduled to facilitate local council elections
(lm) The Maldives government has called an extraordinary sitting of Parliament for January 13 to pass necessary amendments that would empower the Election Commission (EC) to hold local council elections amid the state of public emergency. Under the fresh amendments, the EC would also be able to announce dates for elections. [The Edition]
Originally slated for April last year, the polls were postponed indefinitely in last May, after a State of Public Health Emergency was declared in the face of the global COVID-19 pandemic. Shortly thereafter, the Maldives passed the Sunset Act, which allowed the EC to delay the local council elections until early May this year. According to the EC, the local elections could be held before Ramadan (April 13), provided the required amendments are ratified within the month. [Avas]
12 January 2021
Maldives to resume diplomatic ties with Qatar
(lm) A day after the Gulf Cooperation Council (GCC), a regional intergovernmental alliance consisting of all Arab states of the Persian Gulf – except Iraq – officially ended its diplomatic dispute with Qatar, the Maldives also decided to reinstate full diplomatic relations with Doha. Reinstating diplomatic ties with the Gulf nation was one of the electoral pledges of incumbent President Ibrahim Mohamed Solih’s government. [The Edition]
Accusing Qatar of being too close to Iran and financing terrorist groups, in June 2017, Saudi Arabia and its allies, the United Arab Emirates (UAE), Bahrain and Egypt severed ties with Qatar and imposed a naval, air and land blockade on the country. In solidarity with the quartet, the Maldives had followed suit hours after the announcement, giving rise to rumors that the government under then-President Abdulla Yameen Abdul Gayoom had been influenced by Saudi Arabia.
5 January 2021
Maldives president on unofficial trip to Dubai, meets with crown prince
(lm) Maldives President Mohammad Soli on January 2 embarked on a three-day visit to the United Arab Emirates (UAE). While his office had not revealed any further details beforehand, Soli on January 2 met with Sheikh Mohammed bin Zayed bin Sultan Al Nahyan, Crown Prince of the Emirate of Abu Dhabi to discuss bilateral relations. [Saudi Gazette]
5 January 2021
Maldives signs debt relief suspension deal with Japan, France, and United States
(lm) In a major relief to an already debt-ridden country, the Maldives has signed a series of agreements with Japan, France, and the United States under the G20 ‘Debt Service Suspension Initiative’ to temporarily suspend debt-service payments owed to bilateral creditors. Earlier in September, the government had signed a Memorandum of Understanding (MoU) on the treatment of debt service suspensions with the representatives of various lenders countries. [The Edition 1] [The Edition 2] [Raajjee.mv]
The economic outlook for the Maldives has deteriorated dramatically in recent months, as the country has been unable to offset the impact of the drastic reduction in tourism activity caused by the coronavirus pandemic. Against the larger backdrop of projections of a more severe and prolonged external liquidity pressures than initially forecasted, Fitch Ratings in November downgraded the country’s credit rating to ‘CCC’ from ‘B’, ranking Malé’s vulnerability to default as ‘a real possibility’. [AiR No. 46, November/2020, 3]
Moreover, Malé is estimated to have accumulated $1.5 billion in debt to China, equivalent to 45 percent of the island nation’s national debt. Beijing has already reduced this year’s loan repayment to $75 million from the scheduled $100 million under the G20 ‘Debt Service Suspension Initiative’, and agreed to partially suspend debt repayment applicable to $600 million in loans for a period of approximately four years [see AiR No. 44, November/2020, 1]. Earlier last month, China then agreed to defer repayment for loans which were secured via state-owned companies [see AiR No. 49, December/2020, 2].