- Maldives is all set to pull out of a free trade agreement with China, according to Mohamed Nasheed, the chief of the largest party in Maldives’ new government.
- Nasheed explained that the trade deficit between Maldives and China was too large and called the FTA a “one-way treaty” designed to benefit Chinese exports.
- India will likely use the cancellation of the trade deal between Maldives and China as an opportunity to regain influence in the island nation.
- Following Solih’s swearing-in, India’s Prime Minister Narendra Modi expressed his support for the new government of Maldives, assuring them of India’s cooperation with development projects.
Maldives’ relationship with China is all set for a major shake-up as the island prepares to pull out of a contentious free trade agreement (FTA), according to Mohamed Nasheed, the chief of the largest party in Maldives’ new coalition government and the former president of the country.
Speaking to
Reuters on 19 November, Nasheed, the head of Maldivian Democratic Party, said that the trade deficit between Maldives and China was much too large to warrant a removal of restrictions on trade. He went on to call the FTA a “one-way treaty” designed to benefit Chinese exports and said that it would not pass in Parliament.
The FTA with China was signed in December 2017 by former Maldivian President Abdullah Yameen, who was
ousted in elections in September. In fact, under Yameen’s tenure, ties with India disintegrated as the two countries ran into disagreements over the issuance of work visas to Indian citizens and the sentencing of opposition leaders during the island nation’s emergency in early 2018.
Yameen’s successor, Mohamed Solih, formally took on the responsibilities of President on 17 November. In his inauguration speech, Solih lamented the precarious situation of government finances which he said was due in part to the debts taken from Chinese lenders for large infrastructure projects. Earlier this month, Nasheed refuted claims that China’s intent in Maldives was to offer development assistance, terming the country’s projects as a
“land grab”. In fact, the three largest Chinese projects in the Maldives alone are expected to
cost $1.5 billion in total, which is more than 40% of Maldives’ GDP, according to Gateway House, an Indian think-tank. As part of his election pledges, Solih said he would review and renegotiate contracts that the previous administration signed with Chinese entities in lieu of reducing the country’s debt burden.
India will likely use the cancellation of the trade deal between Maldives and China as opportunity to regain influence in the island nation amid fears that China was looking to construct a military base there. Following Solih’s swearing-in, India’s Prime Minister Narendra Modi
expressed his support for the new government of Maldives, assuring them of India’s cooperation with respect to development projects.
SEE ALSO:
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