Paromita Das
GG News Bureau
New Delhi, 9 October. The political landscape in the Maldives has undergone a significant transformation as President Mohamed Muizzu, once a vocal critic of Bharat’s influence, has shifted his foreign policy to prioritize renewed ties with New Delhi. Having built his rise to power on the back of a populist “India Out” campaign, Muizzu is now reversing course, driven largely by his country’s dire financial situation and mounting debt. This U-turn was highlighted during his state visit to Bharat on October 7, 2024, where he met with Prime Minister Narendra Modi, seeking economic assistance and deeper cooperation. This shift, though dramatic, reflects the pragmatic side of Muizzu’s leadership, as he faces mounting economic pressures from creditors, particularly China.
The ‘India Out’ Campaign: A Short-Lived Populist Strategy
Muizzu’s “India Out” campaign was initially a cornerstone of his political rise. It resonated with nationalist and sovereignty-focused voters who were concerned about Bharat’s influence in the Maldives. The campaign sought to remove the small contingent of Indian military personnel stationed on the island, claiming that their presence infringed on Maldivian sovereignty. By framing Bharat as an external power exerting undue control, Muizzu tapped into local anxieties and used this narrative to gain political traction.
This anti-Bharat stance resonated with many voters, helping Muizzu win the presidency. However, once he assumed office, the harsh reality of the Maldives’ economic fragility began to eclipse the populist rhetoric. The country’s economy, heavily reliant on tourism and imports, is also burdened by significant external debt—an overwhelming $3.57 billion, with over 40% owed to China. The country faces pressing financial deadlines, including a $400.9 million debt to Bharat by the end of 2024, which Muizzu cannot afford to ignore. His once-fiery campaign slogan now seems hollow in the face of these economic challenges.
Maldives’ Debt Crisis: Economic Realities Unfold
The financial situation in the Maldives has become increasingly precarious. A report published by The Diplomat in 2024 painted a bleak picture of the country’s economic outlook. According to the report, the Maldives would need $114 million in 2024 just to avoid defaulting on its creditors, with that figure rising to $557 million in 2025 and a staggering $1.07 billion by 2026. This situation is further compounded by a severe depletion of foreign currency reserves, which by August 2024 had dropped to $437 million—the lowest level in eight years. This sum was only enough to cover 1.5 months of imports, including essentials like food, fuel, and medicine, placing immense pressure on the Maldivian government to find solutions quickly.
In this context, Muizzu’s previous anti-Bharat rhetoric became unsustainable. His “India Out” stance, while politically expedient during the campaign, could not withstand the financial realities his administration faced. Bharat, which has long been a reliable partner for the Maldives, stepped up to help stabilize the country’s economy during past crises. From being the first responder during the devastating 2004 tsunami to supporting the country during a coup attempt in 1988, Bharat’s role in Maldivian security and development has been crucial. Given the financial crisis facing the Maldives, Bharat remains the most reliable ally capable of providing immediate relief.
Muizzu’s Visit to New Delhi: A Pragmatic U-Turn
During his state visit to New Delhi, President Muizzu finalized several key agreements with Prime Minister Modi, including a $400 million currency swap agreement. This lifeline is crucial for the Maldives, as it faces a foreign exchange shortage that threatens to destabilize its economy further. Additionally, the leaders inaugurated important infrastructure projects, including a new runway at Hanimadhoo International Airport. The launch of Bharat’s RuPay card in the Maldives was also announced, further deepening economic ties between the two nations.
What was notably absent from the visit was any reference to Muizzu’s previous “India Out” rhetoric. Instead, both leaders emphasized moving forward and strengthening bilateral relations. Bharatiya media described this shift as a volte-face, a stark turnaround from Muizzu’s earlier hostility toward Bharat. However, it is clear that Muizzu’s softened stance is driven by necessity. The financial burden facing his country left him with little choice but to seek Bharat’s assistance, and his U-turn underscores the pragmatism of his leadership. For Muizzu, ensuring his country’s survival now takes precedence over ideological posturing.
The Growing Role of China and Debt Pressures
While Muizzu’s pivot towards Bharat is primarily driven by financial realities, it also reflects the growing pressure from China regarding debt repayments. China holds over 40% of the Maldives’ external debt, making Beijing one of the country’s largest creditors. Initially, Muizzu was seen as a pro-China leader who would likely prioritize Chinese ties over Bharatiya ones. However, China’s focus has shifted towards ensuring the Maldives meets its debt repayment obligations, rather than providing new financial assistance. This has left Muizzu in a precarious position, with his government struggling to meet its repayment schedules without risking default.
Muizzu likely hoped that China would continue to provide financial support, but Beijing’s strict repayment demands have forced the Maldivian president to reconsider his options. As China became more focused on securing its loans, Muizzu realized that Bharat was the only country willing and able to offer the immediate economic aid the Maldives needed. In doing so, Muizzu has been forced to acknowledge that Bharat’s support is indispensable, especially during times of crisis.
Strategic Shift or Temporary Adjustment?
While Muizzu’s turn towards Bharat may appear to be driven purely by financial necessity, it is more than just a temporary adjustment—it is a strategic realignment. The “India Out” campaign, while effective for mobilizing domestic support, was never a viable long-term policy. As the Maldives faces a financial crisis of unprecedented scale, Muizzu has had to prioritize economic stability over nationalist rhetoric. The shift towards Bharat, a country that has historically been a key development partner, reflects this understanding.
This U-turn is also a testament to Bharat’s enduring influence in the region. Despite the rise of China as a global power and its increasing involvement in South Asia, Bharat’s historical ties, strategic investments, and financial aid have made it an indispensable partner for smaller neighboring countries like the Maldives. Muizzu’s pivot is a reminder that these nations cannot afford to alienate Bharat, especially when their economic and political stability is at stake.
However, it remains to be seen whether this new direction will be sustained. Muizzu’s political base includes segments that remain wary of Bharat’s influence, and future financial or political crises could reignite nationalist sentiments. Muizzu has managed to strike a careful balance, maintaining his stance on Maldivian sovereignty while acknowledging Bharat’s critical role in the country’s economic recovery. While his anti-Bharat rhetoric may have lost its immediate political utility, Muizzu is unlikely to abandon nationalist posturing entirely, especially as he navigates future domestic and international challenges.
Conclusion
The “India Out” campaign is now firmly in the past, replaced by a renewed focus on cooperation between the Maldives and Bharat. Muizzu’s state visit to New Delhi marks a significant turning point in the bilateral relationship, as the Maldives confronts its financial crisis and seeks to secure its future. For Bharat, this is an opportunity to reinforce its strategic role in the Indian Ocean region, while for Muizzu, it is a pragmatic move that underscores the importance of reliable partnerships in times of crisis.
As the Maldives continues to navigate its economic challenges, its relationship with Bharat will become even more crucial. Muizzu’s U-turn on Bharat, driven by necessity, reflects the broader geopolitical reality that Bharat remains the most dependable ally for its smaller neighbors. The financial crisis may have forced the Maldives’ hand, but the decision to realign with Bharat is a strategic one that will shape the country’s future for years to come.
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