The Waheed regime’s games

New Delhi must punish Maldives’ Waheed regime, but without playing into its hands

Mohammed Waheed Hassan’s regime seized power through dubious means. It now seeks to acquire domestic popularity and external support by reneging on an airport operations contract with India’s GMR group. Contrary to its claims, the matter is not merely an issue of the business case turning out to be different than what was previously assumed. If that were so, it would not declared that it is expelling GMR and would select a different airport operator. Renegotiating with an existing vendor is less expensive, less difficult and more reasonable course of action if the intentions were purely commercial. [This ANI report has more details about the project]

The high-level politics of this is clear. The Waheed regime seeks to bolster its ‘nationalist’ credentials by showing it can take on the big, domineering neighbour. It seeks to acquire external support by playing on the India-China contest in the Indo-Pacific. If New Delhi can be provoked to react punitively, the Waheed regime gets the space to court Chinese or other foreign companies. That it was emboldened to attempt such a move is an indicator of New Delhi’s failure of neighbourhood policy.

What should New Delhi do now? First, it should not provide the Waheed regime the excuse it seeks. Diplomatic relations, economic ties, tourism and aid must not be suspended. Second, India should bolster the democratic opposition to the Waheed regime—including Mohamed Nasheed, who happens to be the legitimately elected president—and turn the heat on its illegitimate hold on power. Third, New Delhi must encourage GMR and Axis Bank to use the Singapore courts—the jurisdiction chosen by the contracting parties—to the fullest extent.

The arbitration verdict might well have gone in favour of the Waheed regime, but the Singapore court has stayed the eviction of GMR. If the Waheed regime refused to comply with the court’s orders—as it has declared it will—GMR can seek legal recourse. Similarly Axis Bank might have a case against the Maldives government if the latter has a sovereign guarantee obligation and does not discharge it. The Maldives government has financial and fixed assets in Singapore, which can be targeted by GMR & Axis Bank’s lawyers.

New Delhi has risks to its reputation at stake. If governments of the region come to expect that expropriating Indian companies will be inexpensive and will not have bad consequences, there is a greater chance that they will engage in such behaviour. The Waheed regime must be made to incur the costs of its politics. Not bluntly, though.

The issue will take on an entirely different dimension should the Waheed regime use force against Indian nationals, or engineer or condone violence against them. In such circumstances, it is proper to keep all options on the table.

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3 Responses to The Waheed regime’s games

  1. Mohun 4th December 2012 at 23:49 #

    “keep all options on the table” – in diplomatic-speak, that means “use force if necessary”, correct?

  2. Jason Perera 5th December 2012 at 10:21 #

    Finally an Indian academic and think takes wakes up to the reality of the Maldives situation. No need to say if the resident high commissioner, Mr. Mullay, was a bit more competent things would have not come this far.. In fact, it was alleged that Mullay may have been in the know of the coup in February 2012, but remained complicit to the actions of the military and police.. possibly to defend his own interests.. his son is supposedly employed in the law firm run by the old dictator Gayoom – the Name of the law firm: Shah, Hussain and Co.

    Additionally, India is also still unable to fathom the damage done by the 30 year dictatorial regime of Mauoon Gayoom that lasted from 1978 to 2008. Gayoom, a man educated in Cairo Egypt in the 1950s – he left the Maldives when he was a 11 year old boy and returned only 17 years later… he then went off to Nigeria to teach Islamic Sharia… Gayoom heroes were Jamal Abdel Nassir, Saddam Hussain and other Arab Fascist leaders..Gayoom successfully replicated this in the Maldives, suppressing any dissent using religion.. and yet, he allowed the tourism industry to develop to an extend that the Maldives economy is now dependent on this.. Mostly patronize by western european tourists who come of the sun and sea.. they are allowed to be naked and booze and yet all Maldivian constitution says all Maldivians should be Muslim. hence, the Maldivian do not have even the basic freedoms and human rights…

    Gayoom deliberately did this to subdue the locals and cultivate an alliance with the few wealthy resort owners.. who funded Gayoom’s regime for long.. They eventually called a coup with thin three years of Gayoom be ousted by Mohamed Nasheed in the first multi party elections held in the country…

    Unfortunately the resident high commissioner Mullay was not aware of all the is history or he was not capable of following the development in the Maldives…

  3. S.Sistla 7th December 2012 at 08:53 #

    This is a glaring example of failed policy. It is time to look this through the larger context of India’s neighborhood relations. Indian intelligentsia is overly engaged with the concept of superpower and lives in the dead dreams of past.

    Indian enterprise should focus on creating value in the neighborhood than seeking self goals of plunder.

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