Maldives: Land Ownership Bill, New Cause For Indian Concern – Analysis

By N. Sathiya Moorthy*

For a tiny Indian Ocean nation priding itself as the only one in the South Asian neighbourhood not to have been colonised by European powers, Maldives now has a fast-tracked constitutional amendment conferring land ownership on big-time foreign investors becoming an overnight cause for additional concern.

The constitutional amendment, only the second for the 2008 ‘democracy statute’ was passed by an overwhelming 70 members in the 85-seat People’s Majlis, or Parliament, voting in favour, just a day after the ruling Progressive Party of Maldives (PPM) of President Abdulla Yameen had moved the Bill in this regard.

The constitutional amendment came on the eve of the Golden Jubilee celebrations of Independence, falling on July 26.

Apart from 54 MPs belonging to the Progressive Party of Maldives (PPM)-led coalition, of which the Maldivian Democratic Alliance (MDA) party is a partner, a total of 19 opposition members, comprising 10 from the main opposition Maldivian Democratic Party (MDP) and nine of the Jumhooree Party (JP), also voted for the bill.

While 14 MDP parliamentarians, including ranking members like group leader Ibrahim ‘Ibu’ Solih, Mariya Didi and Eva Abdulla, voted against the bill, the lone member of the religious-centric Adhaalath Party (AP) under-scored the shortage of time available for any meaningful debate. Among the notable supporters for the amendment was former Speaker, Abdulla Shahid, now in the MDP, whose strong views on ‘sovereignty’ issues are otherwise well known. JP’s businessman-founder, Gasim Ibrahim, since coming out of increased government pressure on imminent repayment of $90 million in revenue dues, expectedly backed the bill, claiming that it would bring in a lot of benefits in an ‘inter-linked world’.

That the opposition was divided over the vote and could have been on the verge of a break-up became clear when the MDP in particular and the JP, desisted from issuing a whip for the vote. This contrasts with the more recent practice of the MDP issuing a three-line whip for party MPs to vote with the Government on the equally controversial First Amendment only days earlier, pertaining to the law on the impeachment of Vice-President Mohammed Jameel Ahmed.

The MDP and the JP also voted on the impeachment motion subsequently, which again was fast-tracked. However, unlike the surprise element attending on the new land law, rumours about Vice-President Jameel’s impeachment and his replacement by Tourism Minister Ahmed Adeeb had been doing the rounds for weeks now. Adeeb has since been sworn in, after parliament passed another motion in between, fixing a time-limit for debating his nomination, when made.

Gayoom seeks referendum

In a none-too-unexpected move, former president Gayoom, half-brother of President Yameen and founder-president of the ruling PPM, wrote to the latter and also tweeted ahead of the parliamentary vote, asking him to consider the public concern before giving his assent to the controversial law. While Yameen did not react to Gayoom’s suggestion – conveyed through a personal letter to the president, and also with the people through a tweet – a government spokesman clarified that it was the former’s decision, and it stood.

According to the Minivan News, Gayoom urged President Yameen to “hold a public referendum on the issue, noting the amendments were proposed without public debate. He also stated that previous governments did not sell any part of Maldivian territory to prevent foreign influence over the country’s independence, sovereignty, and resources”.

Incidentally, this is possibly for the first time that President Gayoom has come out in the open on an issue of controversy and concern to the nation as a whole. Only days earlier, he had denied rumours over differences with President Yameen on the decision to impeach Vice-President Jameel and also on the latter’s choice for replacement. At the time, Gayoom tweeted that the president should have freedom to choose a vice-president of his choice.

Though Gayoom was not more specific on what he thought was the cause for public concern over the current law, PPM members – all of whom taking a pro-government line — in Parliament confined mostly to putting his argument on its head, and submitting that despite 80-90 per cent of the 112 luxury resorts in the country being foreign-owned, there had been no such problem. Majority leader Ahmed Nihan assured the public that the ruling party would not compromise Islam or Maldivian traditions and sovereignty.

Nihan, the Minivan News reported, “stressed that the amendments only apply to newly-reclaimed land and that the government was not planning to sell existing natural islands or reclaimed land”. However, it remains to be seen how far would such promises hold, considering that China is also funding the prestigious Male-Hulumale sea-bridge project and a host of others, and President Yameen had already said that almost all Maldivians could be housed in Hulumale island, in the Maldivian suburb.

GMR deal

Coming as it does on the footsteps of the earlier SEZ law, passed with equal force by the PPM-combine controlled parliament, the new land law confers ownership with transfer rights on foreign investors putting in a minimum of $1 billion on the purchase of land, of which 70 per cent should have also been reclaimed from the sea. This by itself should be a surprise in a nation, where the ownership of most, if not all lands rests in the state.

Suffice is to point out that in the case of Maldives, one of the strong arguments against the by-now-aborted ‘GMR deal’ with the Indian infrastructure major was that the contract put the possession, though not ownership, of the nation’s only international airport, with facilities for the possible landing of large air force transporters and the like, in the hands of a ‘foreign entity’. What went unmentioned in the process was the successful landing of wide-bodied, Indian Air Force (IAF) aircraft with armed personnel, at the height of the ‘Operation Cactus’ rescue operation, after mercenaries laid siege to the Maldivian capital of Male, in 1988, when president Gayoom was in power.

It is not unlikely that the current amendment is aimed at making FDI under the SEZ law more attractive than already. Months after the Yameen government, including then tourism minister Adeeb, now Vice-President, heading the SEZ clearance panel, had promised imminent big time investments, nothing much seems to be in the pipeline. It may have more to do with the inherent inadequacies of the Maldivian economy, where geography and demography have conspired against the nation having a strong manufacturing base.

It is anybody’s guess how and why the nation has not followed up on the currently felt limitations of resort tourism with a big time entry into the financial sector, like Singapore and Dubai, both not far away, but should be focussing on what seems to be non-financial services sector, if not outright manufacturing, for which, land, water, electricity and transportation and labour costs would all prove uneconomical. It is another matter that Maldives has yet to take labour law reforms, as prescribed under international codes, seriously and the state and status of low-end migrant labour continues to be appalling.

Chinese military base

According to local media reports, MPs opposed to the new law “expressed concern over possible Chinese military expansion in the Maldives, and the lack of time to review the amendments”. As they pointed out, the bill was pushed through parliament in such haste that the House committee evaluated the contents the day it was presented and cleared it instantly, for full House vote the very next day.

The critics may have a point. Not very long ago, the Maldivian government leased out an island in the Laamu Atoll to a Chinese player, for the development of a tourist resort for near-exclusive use by the large number of budget travellers from that country. Expanding the international practice of donor/creditor nations converting part of the aid into originating goods and services, Chinese investors, as has been the norm, also import infrastructure and casual labour from that country. This has ensured greater exclusivity in terms at project sites, with host nations at times feeling extremely uncomfortable about their real purpose and presence.

Speaking during the final debate on the amendment, Minivan News quoted MDP parliamentarian Eva Abdulla as saying that a Chinese Yuan class 335 submarine has passed through Maldivian waters and docked at the Karachi port on May 22, adding that Indian media called it “China’s deadliest attack submarine”. MP Eva has already submitted a demand for summoning Defence Minister, Maj Gen Moosa Ali Jaleel (retd) to the House, for seeking an explanation on the Chinese naval presence of the kind in Maldivian territorial waters.

Maldivian foreign and domestic policies should be based on ensuring Indian Ocean regional security as “Maldives is not in the South China Sea”, she said. Maldives is a “front line state” in the new Cold War and should not be a catalyst for conflict, Minivan News quoted the MP as saying further. The MDP as a “centre-right party” supports free market policies and the principle of private land ownership, but could not support “selling land for China to build military bases” in the country, Eva Abdulla added.

According to Minivan News, ruling PPM parliamentarian Ali Arif conceded that the Maldives as a small nation is always vulnerable to influence from powerful nations. He said the House committee addressed the concerns over sovereignty during its review process and added a clause to the bill stating that the Maldivian state will exercise complete authority over the territory designated for projects.

Be it as it may, it is anybody’s guess how a nation in near-eternal debt to its international creditors and successive political leaderships lacking the will to plug deliberate and organised leakage of government revenue and forex earnings could ever bring itself around to challenge foreign investors, state or non-state actors, on ‘sovereignty’ issues or ‘transfer rights’, if it were to be accompanied by instant repayment of massive dues, as is the case in the GMR arbitration case.

Larger issues

China was known to have proposed a massive atoll-centric tourism facility for its budget travellers when MDP’s jailed president Mohammed Nasheed was in office. At the time, too, security concerns came to be expressed, given the possibilities and also the inevitability of such an exercise forcing Maldives into a geo-strategic situation where it would have little choice or say. The reference was possibly also to the US military base in Diego Garcia, not very far away, whose 50-year lease would come up for review and renewal in 2016.

The concerns of the larger Indian neighbour in this context should come not only from the increasing presence of adversarial China, whose controversial and at times suspicious ‘Maritime Silk Route’ (MSR) has attracted smaller neighbours like Maldives and Sri Lanka, for reasons that do not always justify the decision. India was equally perturbed when the US, near-unilaterally approached the government of then Maldivian president, Mohammed Waheed Hassan Manik, for upgrading the existing ACSA (Acquisition and Cross-Servicing Agreement) to SOFA (Status of Forces Agreement), providing for US military personnel on foreign territory to carry weapons and be governed by American, and not local laws.

Any excessive presence of Chinese or other nationals in the Indian Ocean neighbourhood, especially of particular nations, could only add to the concerns of India, which is not known to have drafted any cohesive, comprehensive and decisive approach to handle situations of the kind. This time round, there is more credible information about increasing Chinese presence and interest in Maldives than during the days of president Gayoom, when unsubstantiated rumours – at times manufactured with an intent and motive – made ill-informed sections of the Indian strategic community, dizzy.

More importantly, the Indian policy maker and political leadership may need to confer greater and continuous attention to the immediate neighbourhood than already – including the imaginative initiative of Prime Minister Narendra Modi inviting all neighbourhood Heads of Government for his inauguration, and following it up with whistle-stop visits to most of their capitals. Maldives was excluded from PM Modi’s three-nation Indian Ocean neighbourhood tour, which covered Seychelles, Mauritius and Sri Lanka, thanks to the evolving, explosive situation nearer home, followed the arrest and trial of former president Nasheed in the ‘Judge Abdulla abduction case’.

*N. Sathiya Moorthy is Director, Chennai Chapter of the Observer Research Foundation. He can be reached at [email protected]