India announces $500 million for Maldives project to counter China influence
Even as the Covid-19 crisis strained its own economy, India has loosened its purse strings and pledged a new financial package of $ 500 million to support an infrastructure project in the Maldives - ostensibly to counter China's attempts to spread its geo-strategic influence over the Indian Ocean nation.
External Affairs Minister, S Jaishankar, had a video conference with Foreign Minister of Maldives, Abdulla Shahid, on Thursday. He announced a financial package - consisting of a grant of $ 100 million and a new Line of Credit of $ 400 million - to support the construction of a 6.7-kilometer-long bridge-cum-causeway link between Malé, the capital of the Indian Ocean archipelago, and its three other islands, the Ministry of External Affairs stated in New Delhi.
The continuing military stand-off between India and China in eastern Ladakh prompted Prime Minister Narendra Modi's government to step up New Delhi's efforts to counter the communist country's bid to spread tentacles in the Indian Ocean region.
India on July 24 extended a $ 400 million currency swap facility to Sri Lanka to help its economy recover from the Covid-19 crisis. The officials of the two governments are also discussing a proposal to delay Sri Lanka's outstanding debt repayment to India.
The Greater Malé Connectivity Project will streamline connectivity between the four islands, boost economic activity and generate employment in the Maldives. It was one of the key poll-promises of Maldivian President Ibrahim Mohamed Solih during the 2018 elections. Once completed, it will boost the economy and generate employment for the people of Maldives, apart from being the most visible infrastructure project in the island nation. It will eclipse the 1.39-kilometer-long Malé-Hulhule-Hulhumale bridge, which was funded by China.
The erstwhile regime of Solih's predecessor Abdulla Yameen had put the Maldives into a debt-trap by awarding the state-owned companies of China contracts to build several infrastructure projects - mostly on unsustainable loan terms. Though Beijing's influence over Abdullah Yameen's regime had resulted in strains in New Delhi's relations with Malé, it saw a reset after Solih and former Maldives President Mohamed Nasheed led the Maldivian Democratic Party to victory in the November 2018 elections.
During Solih's first visit to New Delhi in December 2018, Modi assured him of New Delhi's financial support to get the Maldives out of China's debt-trap.
China, however, continued to offer concessional loans to the Maldives, including one to support the Greater Malé Connectivity Project. The communist country in fact inked an agreement with the Maldivian Government earlier this week to support an $ 11.8 million micro-grid seawater desalination project in five islands in the Maldives.
Jaishankar on Thursday conveyed to his counterpart in the Maldivian Government that New Delhi would also extend a soft loan to urgently help recover the island nation's economy from the Covid-19 crisis.