In a bid to strengthen economic partnerships, Maldivian President Mohamed Muizzu is fostering ties with China, marking a notable shift away from traditional ally India. The "Invest Maldives" forum held in Fuzhou, a key city on China's maritime Silk Road, showcased the President's commitment to bolstering bilateral relations.
President Muizzu, who assumed office in November on an "India Out" campaign, expressed the importance of China as one of the Maldives' "closest allies and developmental partners." The visit aims to solidify agreements ranging from infrastructure to tourism during a week-long diplomatic tour that includes meetings with Chinese President Xi Jinping and Premier Li Qiang in Beijing.
Highlighting economic priorities, Muizzu emphasized the potential for increased fish product exports to China under the existing free trade agreement. Given that fishing constitutes the largest source of employment in the Maldives, with over 98% of exports deriving from aquatic products, the push for economic collaboration is crucial for both nations.
Additionally, Muizzu expressed interest in exploring partnerships under President Xi's Belt and Road Initiative, with a focus on expanding the central airport and commercial port. China has already played a significant role in enhancing Maldives' infrastructure, contributing to projects like the Velana International Airport expansion and the China-Maldives Friendship Bridge.
Despite the apparent warming of ties, concerns have been raised about the Maldives falling into a "debt trap" with China. The World Bank cautioned that the $1.37 billion owed to China constitutes around 20% of the Maldives' public debt. Former President Mohamed Nasheed previously labeled Beijing's lending as a "debt trap," a sentiment that has been echoed by critics.
While China remains the Maldives' largest bilateral creditor, concerns about the sustainability of its debt have been voiced. The World Bank's October report highlighted a significant increase in interest payments, reaching $162.3 million between January and August 2023, up 15% from the previous year. The report also pointed out a "build-up of sovereign exposure" during the pandemic, underscoring the need for diversified investment opportunities.
The Maldives' strategic "Invest Maldives" initiative is actively promoting opportunities across various sectors, including tourism, renewable energy, banking and finance, and agriculture. As the nation seeks to navigate evolving geopolitical dynamics, these efforts signify a proactive approach to attracting international investments and fostering economic growth.