India Woos Maldives to Check China Neighbourhood

India is set to announce a 'substantial financial assistance package' for the Maldives that will help it recover from the Covid economic crisis besides restricting any Chinese move to extend influence over the Indian ocean island country.

The package is in works based on the requirements of the Maldives whose economy has taken a hit due to the Covid-19 pandemic, ET has reliably learnt.

Riding on the goodwill generated after the 2018 elections, India has already extended assistance of $400 million through an extended currency swap arrangement that will help the country tide over liquidity crisis.

Last week, Indian high commissioner to Maldives Sunjay Sudhir handed over a symbolic cheque to mark implementation of nine projects in the Maldives under the High Impact Community Development Projects (HICDP) scheme.

HICDPs constitute an important dimension of the dynamic development partnership between India and the Maldives, according to officials. These projects are driven by the needs of communities on the islands. They will be implemented by city and local councils and thus will enhance the capacities of locally-elected representatives and support the decentralisation efforts of the Maldives.

It may be recalled that a bilateral MoU on HICDPs was signed during the visit of then external affairs minister Sushma Swaraj in March 2019 to Male. Under this, a total grant of $5.6 million was announced for executing high-impact grant projects in the Maldives. This was in addition to a cash grant of $7 million extended during the same visit for execution of small projects.

The projects, chosen by the government of Maldives through the ministry of foreign affairs, have a high-level of community impact and participation in the areas of livelihood and income generation, health, education, gender and child empowerment, sports, sustainable development, officials said.

Under the HICDP scheme, MoUs were concluded in December 2019 for the construction of three fish-processing plants in Maradhoo,Hithadhoo and Hulhudhoo in Addu city in the Maldives. In February 2020, five more MoUs were signed for establishing the Addu Tourism Zone in Feydhoo, Meedhoo, Hithadhoo, Hulhudhoo and Maradhoo. A sixth MoU was also signed at the time to set up a bottled water plant in Hoarafushi.

Unlike India, China’s BRI projects completely disregard local requirements and focus solely on China’s needs under loans that are pushing countries into a debt trap.

India has put in place a comprehensive strategy of development cooperation with the Maldives. As decided during the visit of President IbuSolih to India in December 2018, the strategy includes both big projects under the $800 million LoC and a large number of relatively small grant projects. While the LoC projects with a longer gestation period will contribute significantly to the development of infrastructure in the Maldives, the grant projects are expected to have an immediate and positive impact on the lives of the island communities.

Indian development assistance in the Maldives covers a wide swathe of sectors including fisheries, ecotourism and sustainable development, sports infrastructure, coastal protection and includes projects such as procurement of vehicles and machinery for city councils, infrastructure upgrade of critical institutions, construction of school classrooms, development of community centres and parks including children's parks, officials said, adding, the larger LoC projects have, as their focus, development of infrastructure related to water and sanitation, roads and reclamation, port, cancer hospital, cricket stadium and airport development.