India plans to build a major bridge to connect islands in the Maldives. Image: Facebook

MUMBAI – India has committed to build crucial infrastructure projects and invest in the Maldives in a counter to China’s Belt and Road Initiative (BRI).  

India plans to help construct the Indian Ocean archipelago’s biggest civilian infrastructure project that will connect the capital Male with three neighboring islands Villingili, Gulhifahu, and Thilafushi with a 6.7-kilometer bridge and causeway.

The project promises to fundamentally change the Maldives’ economy and topography surrounding Male through greater connectivity. The plan is part of India’s commitment to invest $100 million as a grant to develop the Greater Male Connectivity Project (GMCP).

India will also provide a $400 million line of credit to the Maldives. A new industrial zone will be constructed on the island of Thilafushi, while a port will be built on the other two islands with Indian assistance.

Following the rise of President Ibrahim Mohamed Solih in November 2018, the archipelago has sought to review several Chinese BRI projects initiated by his predecessor Abdulla Yameen.

Then Maldives President Abdulla Yameen (L) and China’s President Xi Jinping listen to their national anthems during a welcome ceremony at the Great Hall of the People in Beijing. Photo: AFP/Fred Dufour

The biggest and most visible project under the scheme is the 1.4-kilometer Maldives-China Friendship Bridge, which connects Male with the eastern islands of Hulhule and Hulhumale.

The Maldives, along with other Asian countries including Malaysia, Pakistan, Sri Lanka and Myanmar, have raised concerns about the financial terms of BRI projects, fearing what some have referred to as possible “debt traps.”

India’s discomfort was palpable when Yameen’s regime favored China and Chinese companies and opened its seas to its submarines and naval vessels. The Maldives has claims to large maritime rights in the central Indian Ocean because of the geographical spread of its 1,200 islands.

India is the island nation’s largest and closest neighbor, with its northernmost islands about 500 kilometers south of India’s southern tip.

At the same time, India fears being encircled by China and its increasing presence in neighboring countries including Pakistan, Nepal, Myanmar, Bangladesh, facilitated by ports and other infrastructure Beijing has helped to build.

India is now bidding to woo back some of its neighbors, including the Maldives, through Prime Minister Narendra Modi’s “Neighbourhood First” policy. Solih has responded with his own “India First” policy.

Maldives President Ibrahim Mohamed Solih (R) embraces Indian Prime Minister Narendra Modi during Solih’s presidential inauguration in Male, November 17, 2018. Photo: Handout/PIB/AFP

The GMCP was a key promise made by Solih during his election campaign. The project will serve as an infrastructural complement to the new Gulhifalhu port that’s being built with an $800 million line of credit from India.

The project’s advocates say it has the potential to create jobs, promote tourism and become an economic growth-generating urban hub once the four main islands surrounding the now congested Male are connected.

Indian Foreign Ministers Subrahmanyam Jaishankar and his Maldivian counterpart Abdulla Shahid agreed to the investment scheme after a virtual meeting on August 13.

Maldives, which depends mainly on tourism for economic growth, has faced a severe financial crunch after a lockdown to prevent the spread of coronavirus and the lack of foreign tourists. Its economy could contract by 11% to 14%, according to World Bank estimates.

India has provided a $400 million currency swap facility to the Maldives to help with its foreign exchange shortage and growth contraction. The Maldives faces a $395 million budgetary shortfall this year.

The Maldives and India also plan an “air bubble” to allow travel between the two countries without restrictions after passengers meet medical requirements to prevent the spread of Covid-19. The first flight is expected on August 18.

In another bilateral move, the two countries will start a direct cargo ferry service to increase trade and help the Maldives with supplies that have grown scarce because of Covid-19.

An aerial view of the island of Male which is the capital of the Maldives. Photo: AFP/Roberto Schmidt

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