 |
|
Maldives President Mohamed Muizzu's state visit to India, scheduled from October 6 to 10, is marked by a confluence of pressing issues, including a significant drop in Indian tourism, the country's burgeoning debt, and strained diplomatic ties. Muizzu's visit comes at a crucial time for the Maldives, which has been grappling with a decline in tourist arrivals from India, a key source of revenue. The drop, attributed to the fallout of a controversy surrounding PM Modi's visit to Lakshadweep, has pushed India from the top spot to sixth in the Maldives tourism markets chart, resulting in an estimated loss of $150 million. This economic downturn further exacerbates the country's existing debt burden, estimated at $8 billion, with substantial portions owed to both India and China.
Muizzu's visit is widely perceived as an attempt to secure financial assistance from India to address the economic crisis. Reports suggest that the Maldivian President is seeking a bailout package, including grant-in-aid, debt restructuring, and a $400 million currency swap deal to bolster depleted foreign exchange reserves. While official confirmation of these requests is awaited, the urgency surrounding the country's financial situation underscores the gravity of the situation. The Maldives faces mounting external debt servicing obligations, with a substantial sukuk repayment due in 2026. The decline in foreign exchange reserves, which hit a six-year low in July 2024, further highlights the fragility of the Maldivian economy.
Beyond the economic concerns, Muizzu's visit is also a strategic move to repair the strained diplomatic relations with India. The Maldives-Lakshadweep controversy, coupled with Muizzu's past pro-China stance and anti-India rhetoric, had significantly impacted bilateral ties. Muizzu's recent shift towards a more conciliatory tone, evident in his toned-down anti-India rhetoric and affirmation of not replacing Indian forces with Chinese troops, signals a potential shift in the country's foreign policy. While India's response to Muizzu's requests for financial assistance remains to be seen, the visit offers a platform for both countries to engage in constructive dialogue and potentially rebuild trust.