Ibrahim Solih must hit the ground running to stabilise the economy

After five years of rule by a government that strong-armed political dissent domestically, the Maldives has put a pro-people administration in power, swearing in Ibrahim Solih, representing the Maldivian Democratic Party, as President on November 17. He has announced a slew of populist policies, and vowed to end an era of “large-scale embezzlement and corruption”. The last is an allusion to the untold millions allegedly paid to officials as kickbacks for various mega-construction projects. The Solih government came to power on the back of a coalition of unlikely bedfellows. The MDP, the party of former President Mohamed Nasheed, has joined hands with the Jumhooree Party of business tycoon Qasim Ibrahim, the Islamic-based Adhaalath Party, and the support base of former President Maumoon Abdul Gayoom. They will have to ensure that ideological differences do not cause the coalition to split at the seams, and unravel the consequences of previous President Abdulla Yameen flinging open the doors to Chinese investment, allowing a cascade of financing that caused the national debt to balloon to nearly a quarter of GDP. But a strategic return to India and its underlying democratic values could back-stop the economic pummelling that Male is sure to face if creditors in Beijing start calling in their dues.

The new government is being cautious, but professedly firm, in unravelling this web of debt. The leadership has promised that what is owed will be paid, and not a penny more; and that wherever opacity cloaked the grant of land, lease rights, construction projects and more, the honouring of debts would be linked to whether a transparent and fair process was followed in the first place. Yet, there is little doubt that China is there to stay in the Maldives, and a balancing agreement will have to emerge through the plethora of commercial contracts the new government would ideally like to renegotiate. In this mission, the renewed bonhomie with India, reflected in the respect accorded to Prime Minister Narendra Modi and the Indian delegation at the inaugural ceremony, will play a crucial role. Innumerable Indians work across the hospitality, education, and health-care sectors of the Maldives economy, and India contributes everything from helicopters to medical visas to Maldivians. The greatest threat to stability comes less from geo-strategic denouements than from within the fabric of its polity. Certain elements that backed the anti-democratic 2012 ‘coup’ that unseated Mr. Nasheed and supported the dramatically centralised power of the previous presidency still abide within the ruling combine. There is only one option for the fledgling coalition government: to strengthen Maldivian institutions and, by extension, democracy.

Source: Read Full Article