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The Maldives, a nation grappling with a severe economic crisis, is seeking financial assistance from India. President Mohamed Muizzu's recent visit to New Delhi, his first since taking office, marks a significant shift in his stance towards India, previously characterized by an 'India out' policy. This trip reflects the urgent need for a bailout as the country faces dwindling foreign reserves and the threat of a debt default. The visit also underscores the changing dynamics in the Indian Ocean region, where China's growing influence has sparked concerns among regional powers.
Muizzu's visit is a testament to the gravity of the economic situation in the Maldives. Foreign exchange reserves have dwindled to a critical level, barely enough to cover one-and-a-half months of imports. The country's credit rating has been downgraded by Moody's, highlighting the rising default risks. While Muizzu has ruled out seeking an International Monetary Fund (IMF) program, he is confident that India will come to the rescue with a substantial financial package.
This visit represents a departure from Muizzu's previous rhetoric and actions. During his election campaign last year, he advocated for a less dependent relationship with India. However, the current economic crisis has compelled him to seek support from Delhi. His reconciliatory tone and the urgency of his visit highlight the importance of India's role in stabilizing the Maldives' economy and safeguarding its strategic interests.
India's financial support could be crucial for the Maldives, providing a much-needed lifeline to bolster its foreign currency reserves and address its debt obligations. The visit also presents an opportunity for both countries to re-evaluate their strategic partnership, particularly in light of China's growing assertiveness in the Indian Ocean region. The Maldives' recent port calls for Chinese research vessels have raised concerns about China's growing influence in the region, prompting India to strengthen its ties with the island nation.
The Maldives' economic crisis and Muizzu's visit to India highlight the intricate web of political, economic, and strategic considerations that shape the Indian Ocean region. India's willingness to assist the Maldives underscores its commitment to maintaining regional stability and countering China's influence. While Muizzu's policy has shifted towards greater cooperation with India, the long-term implications of China's increasing presence in the region remain a source of concern for both India and the Maldives.