BRI debt-trap and elections in Maldives

The September 23 national election in the Maldives, the small island state in the Indian Ocean, was won emphatically by the joint opposition candidate Mohammed ‘Ibu’ Solih.

The incumbent President Abdulla Yameen has accepted defeat and the final results have demonstrated both the power of the ballot box and the limits to Beijing’s ability to shape the electoral outcome in favor of a dictatorial leader that it has supported politically and financially.

The opposition coalition in the Maldivian election cautioned the electorate that China is ensnaring smaller countries in a “debt-trap” from which they cannot recover in the short-tern, thereby compelling them to mortgage critical real estate for decades. As part of the election pitch, President Yameen was accused of ‘selling’ some distant islands to China and this perception gained ground due to developments in another Indian Ocean island – Sri Lanka.

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The Maldivian opposition led by former and exiled President Anni Nasheed is based in Colombo and many young Maldivians are pursuing higher education in that country.

Thus they are very aware of the Sri Lankan experience, where one regime (President Rajapaksa) had entered into such high-interest, low transparency infrastructure projects with Beijing; only to see the next regime (President Sirisena) having to handover the port of Hambantoa to a Chinese entity for 99 years. This story has clearly had its impact on the Sunday election.

Using strong-arm tactics, President Yameen had taken his nation into a closer relationship with China and over the last two years he jailed political opponents and browbeat the judiciary into legitimizing his oppressive measures under the guise of protecting national security and sovereignty.

The growing Chinese influence in the maritime domain is the primary trigger for the unease that is now palpable in the US, EU and Asian nations such as India and Japan

C. Uday Bhaskar

Disproportionate attention

Consequently the Maldives election has elicited disproportionate attention from the major powers who had cautioned the Maldivian President to ensure free and fair elections failing which “appropriate measures” would be taken.

More than the democratic aspirations of the unsuspecting Maldivian people (total population 446,000) , it is the strategic location of the island cluster in the middle of the Indian Ocean that gives it the relevance that now obtains at the international level.

The growing Chinese influence in the maritime domain is the primary trigger for the unease that is now palpable in the US, EU and Asian nations such as India and Japan. Beijing’s creeping assertiveness with attendant territorial consolidation in the South China Sea and now the growing foot-print in the Indian Ocean have added to the regional anxiety about Chinese revisionism.

The larger issue embedded in the Maldivian election is the degree to which Beijing is able to influence the domestic politics of countries that it deems to be relevant to its ambitious BRI (Belt Road Initiative).

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This macro road-rail transport cum port connectivity blueprint is a high-priority personal project for Chinese President Xi Jinping . The total financial outlay was envisioned to be in the order of one trillion (US) dollars spanning over 60 countries.

The top 10 BRI projects by way of fiscal value that were planned are three in Malaysia, two in Pakistan and one each in Myanmar, Bangladesh, Laos, Thailand and Indonesia. However, most of the financial disbursement is shrouded in opaque long-term loans with many charges being leveled that domestic leaders who agree to toe the Beijing line stand to benefit personally and for their election funds.

Maldives apart, the Malaysian example where the former Prime Minister Najib Razak was charged with receiving such undue favors from Beijing and the manner in which his successor PM Mahathir sought to re-negotiate the major China aided projects is case in point.

Currently the BRI has hit quite a few “debt-trap” road-bumps that include Sri Lanka, Malaysia, Myanmar, Cambodia and the most surprising is Pakistan – where the murmur about the need for greater transparency in the fiscal details of the CPEC (China Pakistan Economic Corridor) has been growing after Prime Minister Imran Khan assumed office.

Pakistan is currently under severe financial constraints and is seeking an IMF package to avert a fiscal crisis. It was reported that on August 31, Pakistan’s forex reserves were at $9.88 billion and dipping below the 10 bn $ benchmark is a case of the amber lights flickering. Whether Beijing will step in to bail out Pakistan is moot and will depend on how China conducts its own internal BRI review apropos financial viability and long term political risk management.

The desirability of improving macro connectivity across Asia and Africa in the 21st century context with its cyber connotations is not in dispute. The objective is unexceptionable and at this cusp in global affairs, China is the only nation with deep pockets that can fund such an ambitious initiative.

Unease in BRI nations

However, the pattern of the last year beginning with Sri Lanka and Hambantota has caused considerable anxiety and unease in many of the BRI nations. Their more alert and aware citizens are worried about the Chinese debt-trap and loss of sovereignty and /or the mortgaging of territory. Tiny Maldives has spoken.

A March 2018 survey by the Centre for Global Development , Washington noted that 23 out of 68 nations that have received BRI related fiscal infusion were deemed to be “significantly or highly vulnerable to debt distress.” It further added that eight of the 23 nations were even more vulnerable and this list includes : Pakistan, Tajikistan, Djibouti, Kyrgyzstan, Laos. Maldives, Mongolia, and Montenegro.

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Responding to the criticism about the BRI, Chinese President Xi Jinping stated on Wednesday (Sep 19) that “opposition to the CPEC and BRI projects would not succeed as this is an initiative of peace and development not only for China but for the region and beyond”.

The Xi objective is laudable but the path to this goal has to be more persuasive, equitable, transparent and consensual than what its recipients currently perceive it to be. Can Maldives be the catalyst for such an objective policy review by the core Xi team that is steering the BRI?
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Chitrapu Uday Bhaskar, a retired Commodore who served in the Indian Navy, is one of India's leading experts and outspoken critics on security and strategic affairs. Commodore Bhaskar is currently the Director of the Society for Policy Studies (SPS), an independent think-tank based in New Delhi, India. He has the rare distinction of being the head of three think tanks during his career - the earlier two being the Institute for Defence Studies and Analyses (IDSA) and the National Maritime Foundation (NMF). He is a columnist, editor, and contributor of numerous research-articles on nuclear and international security issues to reputed journals in India and abroad. Bhaskar has an abiding interest in the visual arts, film and theater. He tweets. @theUdayB.

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Last Update: Wednesday, 20 May 2020 KSA 09:52 - GMT 06:52
Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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