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The recent turn of events in the Maldives serves as a compelling example of the perils of shortsighted foreign policy. Having campaigned on an 'India Out' platform, President Mohamed Muizzu, who rose to power on the back of this agenda, found himself in a precarious position just a few months into his presidency. The Maldivian economy, heavily reliant on tourism, was teetering on the brink of collapse, leaving Muizzu with no choice but to seek assistance from the very nation he had sought to antagonize: India.
Muizzu's initial attempts to alienate India resulted in a series of missteps that severely impacted the Maldivian economy. His government's hostile rhetoric and actions, including the expulsion of Indian military personnel and insults directed at Prime Minister Modi, sparked outrage in India. The consequences were swift and severe: a sharp decline in Indian tourism, the Maldives' primary source of revenue. This decline, which reached 42% in just four months, resulted in a loss of $150 million, exacerbating the already fragile economic situation.
The Maldives' overtures towards China, seeking an alternative partner to India, also proved to be a miscalculation. While China, known for its strategic investments in developing nations, had engaged with the Maldives, it was not willing to provide the level of support that Muizzu had anticipated. As the Maldivian economy spiraled downwards, with forex reserves dwindling to alarming levels, the reality of their economic dependence on India became starkly evident.
In the face of this crisis, Muizzu was forced to swallow his pride and seek a bailout from India. India, recognizing the precarious situation and its longstanding ties with the Maldives, extended a generous package, including a currency swap loan of $400 million and an additional Rs 30 billion. This financial assistance, along with other measures like the launch of RuPay cards and the commencement of discussions for a Free Trade Agreement, signified a reset in India-Maldives relations.
The episode highlights the importance of strategic partnerships based on mutual respect and understanding. It underscores the fact that India, as a regional power, is a reliable and committed partner to its neighbours, providing not just financial aid but also crucial support in areas like healthcare, education, and security. Muizzu's experience serves as a cautionary tale for other leaders in the region tempted to play China against India. While China may offer alluring promises, its commitment to supporting its partners is often contingent on its own strategic interests.
The Maldives' swift shift from antagonizing India to seeking its assistance underscores the reality that good neighbourly relations are essential for long-term stability and economic prosperity. This episode has served as a wake-up call, not just for the Maldives but for other nations in the region, emphasizing the importance of building strong and lasting partnerships with India, a nation that has consistently proven to be a reliable and supportive partner in the face of challenges.
Source: India Bails Maldives Out as Muizzu Finally Gets a Reality Check