Whether by ignorance or design, the Maldivian Auditor-General’s “concern over the heavy reliance on a single country for grants,” without naming the larger Indian neighbour, should cause eyebrows to raise in the two countries. Coupled with open House observations of Parliament Speaker Mohammed Nasheed—who is also the leader of the ruling Maldivian Democratic Party (MDP)—that passing the annual budget as presented would “cause loss of confidence in international financial institutions,” it could only mean that the leadership of President Mohamed Ibrahim Solih continues to face internal problems even after completing two years of its five-year term.
Appearing before Parliament’s Budget Committee before the full House passed the Government’s proposals with add-ons, representatives of the Auditor-General’s office, a constitutional authority, pointed out how out of the promised grants of MVR 2.2 billion for fiscal year 2021, India has promised MVR 1.82 billion. They added, however, that only 61 percent of the promised grants is generally realised each year. Expressing concern that over three-fourths of the projected grants will be from a single country, the Auditor-General’s Office said, “Given the heavy reliance on a single country amid this significant global economic downturn, it is possible that funding from the country falls short of the projected amount if the country in question faces constraints.”
Clearly, the Auditor-General’s Office did not seem to have taken to India’s track-record in assisting the Maldives in particular, dating back to the regime of President Maumoon Abdul Gayoom before Speaker Nasheed replaced him in the nation’s first multi-party elections of 2008. Apart from land-locked Bhutan, the Maldives is one country for which India has an SOP, exempting all export restrictions and bans, especially in times of domestic food scarcity. Thus, even at the height of the pandemic-enforced international restrictions on transportation and civil aviation, India air-lifted tonnes of COVID-centric medical aids and also massive quantities of food items ahead of the year’s Ramzan.
Defying the increasing spread of the pandemic in the Maldives, India’s Foreign Secretary Harsh Shringla visited Male last month, as a sign of New Delhi’s confidence in the local Government. At the time, India launched the maiden Male-Kulhudhufufushi-Kochi-Thoothukudi ferry service by the Indian public sector Shipping Corporation of India (SCI). President Solih has since announced how cargo operations between the southern-most Addu, Huvadhu and Thoothukudi in India’s southern Tamil Nadu coast will commence in a few weeks.
Considering the Maldives’ heavy dependence on tourism, India has been encouraging the local population to visit the southern atoll-nation even in the midst of the pandemic. According to the Maldivian Tourism Ministry, India has become the second largest tourism market after the nation opened up, with 5.449 arrivals, after Russia with 7,512 arrivals.
Later when Parliament took up the Budget for debate and vote, Speaker Nasheed echoed the sentiments of some members and said that the passage of the Budget, as it stood, would cause loss of confidence in the Maldives among international financial institutions. “The deficit will be reduced once allocations are made in the light of what can actually be done next year,” he said, before the 87-member House voted—68-1—the MVR 33.29 billion budget with an MVR 15.1 billion deficit
Apart from Speaker Nasheed, the Governor of the Maldives Monetary Authority (MMA), Ali Hashim, also warned, in his meeting with the Budget Committee, how the ‘large projects’ included in the Budget were ‘incompatible with the current economic situation’. According to him, “Both IMF and World Bank, during their last meeting, recommended opting for blue or green financing in the upcoming year, and that they will make available blue financing funds. It’s very important at this time to tap this fund.”
The central bank head felt that the Government ‘may face difficulties in securing foreign currency’ to conduct projects, especially US dollars, and advised to ‘initiate projects only after securing the required amount of foreign currency’. The case was further bolstered when the Election Commission (EC) told the Budget Committee that cuts in allocation could impact the promised conduct of the COVID-delayed local council elections across the country, planned for March next year.
President Solih himself underscored how the ‘World Bank’s support is more vital now than ever’, when he met with the Bank’s Country Director Faris Hadad-Zervos, and Country Manager Chiyo Kanda. The country director stated that visiting at this time, during the global crisis is important and shows the World Bank's commitment to supporting the Maldives.
Unlike the Auditor-General’s Office, the central bank and Speaker Nasheed only commented on the feasibility of the Budget without reference to any perceived external issues, including its Indian neighbour. Yet, for Nasheed in particular to talk about what should have been discussed within party fora or more personally with his friend the President, has become a part of the disturbing trend within the ruling MDP.
In the same vein, another of Nasheed’s interventions in Parliament, this time over possible corruption in the procurement of the COVID-19 vaccine has unsettled many in the ruling party. First and foremost, the present Health Minister Ahmed Naseem has been a long-time political aide of Nasheed’s—long before the latter became President in 2008. Naseem had also served in Nasheed’s Cabinet and then joined Solih’s team in the President’s Office before being moved to the Health Ministry last month.
The other unsettling aspect about Nasheed’s observation on corruption in the Health Ministry flows from his success in getting Naseem’s predecessor Abdulla Ameen to resign over alleged corruption in the proposed procurement of ventilators, by turning members of the MDP parliamentary group against each other and by extension against President Solih. This has since been followed up with 10 MPs moving the MDP parliamentary group for the removal of Communications Minister Mohamed Maleeh, over the ‘Communications Authority's failure to compile any of the regulations mandated under the Telecommunication Act’.
At the same time, the MDP parliamentary group, though divided at one time, voted to defeat the Opposition-sponsored no-trust motion against Home Minister Sheikh Imran Abdulla, leader of the religion-centric Adhalaath Party (AP), which is a partner in the ruling coalition. In turn, this has caused eyebrows to raise as to the way a section of the MDP parliamentary group reacted differently to resignation demands against party nominees and that of alliance partners – though in the case of no graft charge of the kind that was laid against Home Minister Abdulla.
In the meantime, the Opposition PPM-PNC combine staged protests, demanding freedom for jailed former President Abdulla Yameen, who completed one year in jail in late November. Alongside, another of the nation’s top politicians, billionaire-businessman Gasim Ibrahim—an eternal aspirant for the presidency and whose Jumhooree Party (JP) is part of the Solih Government even while not an electoral ally of the MDP anymore—has declared that he was ‘unable to pay employee salaries due to the financial status’ of his Villa Group of companies.
While a demoralised Opposition combine and the poor finances of an unsure ally may work in favour of the MDP over the medium term, the Solih Government’s popularity and also the party’s larger acceptance level will be put to the test in the nation-wide local council polls, when held in March. At the same time, both the Government and the party will have to be concerned about the MDP-controlled National Security Services Committee of Parliament deciding to amend the Police Act to make all forms of protest by police officers a punishable criminal offence.
The ruling MDP faced a piquant situation when a section of policemen joined Opposition-led anti-Nasheed protests and identified with religious NGOs, which led to Nasheed’s resignation as President in February 2012. Until then, the party was campaigning for freedom for political rallies and protests by all sections of the society as well as freedom for policemen and other Government servants to enrol in political parties.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
N. Sathiya Moorthy is a policy analyst and commentator based in Chennai.
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