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Maldives: Externalising internal problems?
N Sathiya Moorthy
30 November 2012

Whatever the justification or motive, the Maldivian Government's decision to unilaterally cancel the construction-cum-concession contract with the Indian infrastructure major, GMR Group, has one unhealthy trend for the islands-nation to cope with through the coming years. It boils down to the Government of President Mohammed Waheed Hassan Manik helping to externalise internal issues and problems in and of the infant democracy, where presidential polls are due in November next.

It is not just about the Maldivian Government taking a principled view on investment policy, revisiting policies and procedures in place or about enforcing accountability. It also does not stop with street-protestors forcing the hands of their Government to take decisions the way they wanted.

It happened in southern Addu City, where the midnight arson of SAARC monuments was matched later only by Government buildings and vehicles - including those donated by India for the Maldivian Police - being set ablaze in the violence that followed President Mohammed Nasheed's resignation on February 7 this year. It is precisely this aspect of the post-resignation protests by President Nasheed's Maldivian Democratic Party (MDP) that the successor Waheed Government scorned.

Instead, it is about the ability of the protestors to force an issue of their choice and the purported inability or unwillingness of the Government of the day to hold the protestors accountable that is at the bottom of the emerging crisis that is facing the nation. Independent of the issues involved, and the methods employed, it is the kind of crisis that enveloped the nation, first when pro-democracy protestors politically cornered the Government and leadership of President Maumoon Abdul Gayoom. More recently, similar tactic yielded results when anti-Nasheed protestors forced him to quit office.

It is also the kind of protests, this time by the MDP that the Waheed Government refused to yield, on a variety of issues since President Nasheed quit office. That was before the Commission for National Inquiry (CoNI) conferred greater legitimacy on the Waheed Government than already conferred by the international community. The CoNI report proved to the Maldivian nation - and the fence-sitters and doubting Thomases outside - that the Nasheed resignation and the subsequent Waheed elevation, were both legal and constitutional.

Supreme Court's concern

It is not about the GMR concession. It is a commercial issue, and the then Opposition parties - now in the Government - had flagged concerns and criticisms, procedural and otherwise, even at the time the contract was being signed in mid-2010. It should thus not have been wholly unexpected that the new Government had a re-look into the matter.

Yet, in the run-up to the cancellation of the contract with seven-day notice for GMR to quit, the Government per se did not initiate any less-contested or least contestable action. It was seen as waiting for the protestors to decide the issue for it, instead.

With the change of Government, the public opposition to the GMR contract was orchestrated by parties like President Waheed's Gaumee Iththihaad Party (GIP) and the religion-centric Adhaalath Party. Both were part of the power-structure when the deal was done. Those like Presidential Advisor and PhD-holder in law, Dr Hassan Saeed's Dhivehi Quamee Party (DQP) that were in the Opposition at the time the GMR contract was signed and agitated some aspects of the deal before Maldivian courts, and successfully so, have not found it expedient for the Government of which they are now a part to stick to the judicial course and legal processes like arbitration - provided for in the contract, as in any other contract of the kind and quantum.

The DQP had obtained court injunction on GMR being allowed to charge $25 fee for Maldivians using the Ibrahim Nasir International Airport (INIA), Male. The present Government has had problems with the Nasheed presidency agreeing to compensate GMR for the monetary loss on this count, by adjusting such payments against the annual royalty amount payable to the Government. Contentious as the decision may have been, it is not devoid of options and opportunities for working out a more rational and mutually-acceptable way out, either through negotiation or arbitration, or judicial intervention.

Announcing the Cabinet decision to scrap the contract, Attorney-General Azima Shukoor said that it was ab initio void, and the Government had the advice of local and overseas lawyers in the matter. The latter may have been said in the context of the arbitration clause and international best practices in contracts of the kind. With GMR already obtaining a favourable injunction from the State-owned Male Airports Company Ltd (MACL) from courts in Singapore that the latter could not take the matter to the Maldivian judiciary pending arbitration, Azima Shukoor also said that the damages that the Government may have to pay GMR for the $ 500-million-plus deal would not be as much as anticipated, and that the Government would fight it out.

A day after the AG went to town on the Government decision and served the seven-day quit notice on GMR, the Maldivian Supreme Court however came out with what reads like a clarification-order. In an obvious reference to the Executive and the Legislature in two different matters, the court, according to SunOnline, issued the order, holding that 'other groups' cannot make decisions on cases that have been filed before the court and are progressing before the court. The court also advised the relevant groups to refrain from such activities that are against the Constitution.

As SunOnline pointed out, the order comes at a time after the Parliament Committee on Independent Institutions recently passed a resolution that the Criminal Court in suburban Hulhumale' was not legitimate, when a case questioning its legitimacy was pending before it. Likewise, the court is also seized of the Attorney-General's Office petition for a declaration that Maldivian courts had jurisdiction over the GMR agreement. It is however unclear if the Supreme Court's new direction also refers to GMR obtaining an injunction from a lower court in Singapore and MACL appealing against it in the Singapore High Court and losing the same - thus, possibly restraining the Airports Authority from participating in future proceedings in courts in Singapore or elsewhere.

However, the Supreme Court order was still seems to be specific. According to SunOnline, the Supreme Court referred to Article 141- C of the Maldivian Constitution, and said that no official performing public function, or any other persons, shall interfere with and influence the function of the courts. The court observed that the said constitutional provision covered activities such as debates, taking action and making decisions on cases filed before the Supreme Court, before the latter made its decisions. The court further held that decisions made by State institutions or other groups to influence such cases would be 'void'.

As the Supreme Court observed, the Constitution states that the three powers of the State are separated - among the Executive, Legislature and Judiciary -- and that no power shall try to illegally influence another. It stressed that the Supreme Court's decision would act as the final word when resolving conflicts between institutions and individuals. It remains to be seen how the Government (in the GMR case) and the Legislature (Hulhumale' court case) would react to the Supreme Court's order. Until now, the Waheed Government has sworn by the Judiciary, while the MDP, controlling Parliament's Committee on Independent Institution, has been at logger-heads with the Judiciary, whether or not the party was/is in power.

The Indian concern

The Supreme Court's order, in the interim, may encourage GMR to move the higher judiciary in the country for redress on the exit-notice. It remains to be seen what order the court would hand down on the Government's petition on the jurisdictional issue of the Maldivian courts and the anticipated GMR plea, if any, on the cancellation of the contract. If the court were to grant GMR any interim relief until the final disposal of the cases - and any other that may (have to) be agitated in terms of any anticipated direction on the pending orders - that could have consequences on the ground, particularly in the context of the seven-day exit notice and the safety and security of individuals and equipment.

The Maldivian Government has announced that it would not extend the visas of the GMR employees beyond the current period. It makes sense in the context of the exit-notice, yet may (have to) be linked to court orders. At the same time, the Government has also publicly promised to ensure the safety of GMR personnel, including many from the group's Indian base. This should address the legitimate concerns of the Indian Government, which has been increasingly concerned after the anti-GMR protestors started shouting slogans outside the Indian High Commission in Male and a senior presidential aide publicly abused Indian High Commissioner Dyaneshwar Mulay, claiming that the latter was "working against Maldivian interests".

According to Indian media reports there are about 300 GMR employees in Maldives. Official Maldivian reports have put the total number of Indian white-collar executives and employees, as also skilled, semi-skilled and unskilled labour at 22,000 - down from over thrice as many, a decade or so back. In recent years, thanks also to the aggressive marketing by Maldivian Tourism, in the aftermath of the 2008 economic meltdown in the US and Europe, more Indians are visiting the country each day. Seldom do they have any idea of domestic politics in the country, and could be caught unawares, if what New Delhi sees as avoidable anti-India tilt to the GMR issue snowballs overnight into something worse.

Economic diplomacy

It also needs to be understood that overseas envoys in foreign capitals are expected to facilitate the entry and growth of bilateral economic cooperation - both at the State-to-State level and between businesses in the two countries, and/or businesses and Governments. In the 21st century when economic issues have become the centre of national survival and growth - and a nation's strength is measured in terms of its economic and not necessarily military strength - it has also become an inevitable and high-point of bilateral diplomacy between any two countries.

Nations like Australia in the Maldivian neighbourhood has a combined Department of Foreign Affairs and Trade (DFAT) in the place of separate ministries handling external relations and various aspects of bilateral and multilateral economic cooperation. Developing mutual economic inter-dependence is also seen as smoothening out some ruffled feathers in bilateral and multi-lateral relations, as Maldivian experience with environmental diplomacy, among others, would have shown. China is a fitting example, as nations across the world are uncomfortable with its growing military muscle-power, only to feel relieved that mutual economic cooperation and trade-dependence would offset much of their concerns, over the short and medium terms.

In the immediate context, given the emerging Indian role as a responsible and concerned regional power keen on sharing its prosperity with all, New Delhi has walked that extra mile, to ensure that greater people-to-people contact could also be developed by encouraging and facilitating Indian FDI in Maldives, a nation otherwise starved for the same other than in the tourism sector - and definitely not in the core, infrastructure sector. In a way, it may have been a continuation of extension of the 'Gujral Doctrine' of the Nineties, named after the then Indian Prime Minister, to cover private sector Indian participation in the neighbourhood.

New Delhi's encouragement of Indian FDI in the neighbourhood seems to have flowed from two realities. Independent of internal differences over specifics, successive Governments cutting across party-lines have encouraged FDI in India ever since the commencement of economic reforms in the early Nineties. India also seems to be alive to the developmental urge, bordering on obsession, in other South Asian nations as well - and acknowledged the limitations in New Delhi going to their help, when it was already inviting FDI to do precisely the same for the country.

Not the first time

If the Maldivian State has had reservations about the facilitation of the GMR investment by Indian diplomats posted in Male under the predecessor Nasheed regime, there are other avenues, and other interlocutors on its side to convey the concerns. Non-discouragement of public protests outside the High Commission, and official spokesmen bad-mouthing the Indian envoy in public, do not encourage the growth of bilateral relations. It is bad diplomacy, as well.

It was however not the first time that the Indian High Commission was the venue of anti-India protests - this very year. At the height of the MDP protests, post-resignation, the Indian High Commission and High Commissioner Mulay were made targets, likewise. On both occasions, New Delhi may have had enquiries of concern about personal safety from Indians working and residing in Maldives (and not just for GMR, which is a very late entrant). The Indian Ministry of External Affairs (MEA) statement on "securing the interests of India and Indians" has to be read in these twin-contexts.

It is not the first time that India has expressed concern about the safety and security of Indians living and working overseas. At the height of the 'First Iraq War' in the early Nineties India evacuated as many as 110,000 Indians working in the war areas, by air and through sea. It was the largest civilian evacuation in the world since the two World Wars. In more recent times, when New Delhi is seen as more resourceful than in the Nineties, the advent of 24-hour television news channels has added a greater urgency to the Indian response, as may have been felt and understood under similar circumstances in Maldives and elsewhere, too.

It was thus that the Government of India took up the case of the harassment of, and physical assault on Indian students studying in Australia, and those that are being targeted on occasions in the US, and ensured remedial action by the host Government. In more recent months and weeks, New Delhi had to intervene in the case of an Indian couple in Norway, whose children were whisked away by local Social Security officials, and a pregnant Indian doctor, who bled to death in an Irish hospital, in the name of religion-centred abortion laws in that country. After Indian seamen working foreign vessels came to be held hostage by Somali pirates in a series, New Delhi has found it fit to deploy the Indian Navy in the Gulf of Aden, to guide India-registered vessels, and intervene where necessary, as part of an emerging global response by State actors.

'Single event'?

After the decision to serve quit-notice on GMR was taken, President Waheed lost no time in declaring that the cancellation of the agreement with the consortium will not affect the relations between India and Maldives. "This is only a single event and Indian Government is fully aware of the sentiments of the Maldives in this regard," Indian news agency PTI quoted President Waheed as saying. Asked if there was reconsideration in Maldives about India being its close friend, the President said, "India truly is the closest friend and will remain so.

President Waheed claimed that the termination of the GMR contract, "which was signed under doubtful conditions, provides assurances that Maldives is committed to a clean and safe business environment for foreign investments." As if to prove a point, Singapore's Crescendas Group was in Male, telling local newsmen that despite the current political turmoil, Maldives has a safe and secure environment for foreign investors. Haveeru Online quoted Lawrence as saying, "There is huge investment potential here... in many sectors. Maldives is one of the best places to invest."

In his turn, President Nasheed would have none of the certification on the climate for FDI inflows, and naturally so. The Waheed Government's decision to void the GMR contract will "put off potential investors for decades", Minivan News quoted him as saying. "Waheed's Government has cynically used xenophobia, nationalism and religious extremism to attack GMR, the country's largest foreign investor. Waheed is leading Maldives down the path to economic ruin," Nasheed said.

Citing unnamed official sources in New Delhi, Indian newspaper The Hindu indicated there may be no truth in the "speculation about China planning to step in the breach caused" by GMR's exit. "This is uncorroborated," The Hindu quoted official sources as saying. "China is giving some development assistance, but not much has come in." The Hindu report said further that New Delhi "will consider whether to proceed with its generous aid-package to Maldives after its Government disregarded New Delhi's pleas" on the GMR issue." As official sources told the newspaper, "Quite frankly, we were not involved, as we didn't want to get into contract details." As other reports had indicated since the GMR row heated up, New Delhi has been consistent only in its demand for the Maldivian Government to follow the due processes - which in this case is negotiations (for which GMR was ready) and arbitration, as provided for in the contract. At the same time, as The Hindu quoted the official, India would not "take lightly" any activity that would hurt its interests in Maldives.

Govt stability under threat?

On the day Maldivian political stability was being certified by a Singaporean investor in the resort business, two of the Government MPs - Abdullah Jabir and Alhan Fahmy, both from the Jumhooree Party of billionaire-politician Gasim Ibrahim - declared their intention to vote in favour of the MDP-sponsored no-trust vote against President Waheed, whenever taken up by Parliament. The JP's subsequent announcement distancing itself from the MPs' decision, may of little consequence in the matter, thus posing a possible commencement of a real threat to the stability of the Waheed Government, and by extension to the overall health of political stability in the country.

Interestingly, the pregnant silence on the part of some of the Government parties on the GMR issue, and the larger India ties, both inside and outside Parliament, has not gone unnoticed, either. Barring the Opposition MDP, considered the single largest party in the country, and a motley group of smaller parties in the Government, none has spoken out so very openly on the subject ever since the street-protests began. That none has spoken against the quit-notice served on GMR - and were party to the Cabinet decision in the matter - a clearer picture on issues and concerns will begin emerging only over the coming days and weeks, spreading out onto months ahead of the presidential polls.

"Stability can come only after (presidential) election due in October but could be advanced to July," The Hindu report quoted Indian officials as saying. As the closest neighbour, perceived as being influential too, India tasked itself with the duty of seeing through the unanticipated power-transfer of February, as smoothly as could have been under the circumstances. Yet, it was all an internal affair of Maldives, despite MDP protests of the time against the Indian envoy - only to be replaced not soon afterward by the GMR-centric slogan-shouting outside the High Commission in Male. Given the complexity of Maldivian democracy, which was born as a coalition, it would be for the voter to decide on the stability factor one way or the other.

Different interests

In a democracy, it is inevitable that electoral forces create constituencies and fend for their interests. Alternatively, they use issues to create constituencies - and feed on both in electoral terms. Democratic Maldives has been finding it out over the past four years. Yet, there is a need for the nation to distinguish between what is constituency interest and what is not. It also needs to know what constitutes national interest and what is not. The nation and the political parties need to strike a balance between the two, with the clear understanding that some day before long they like their counterparts in other South Asian and other Third World counterparts, could well be in seat of political power, and would have to take critical decisions with larger national interests in focus.

Over the past three years since Maldives became a multi-party democracy, there have been continual instances of the Government or the political Opposition of the day using domestic issues and concerns to beat the other side with - and politically so. Even the 'December 23 Movement' that spearheaded the anti-Nasheed public rallies had flagged religious sentiments and even the GMR contract as among the causes for demanding his resignation. Yet, the January 16 arrest of Criminal Court Chief Judge Abdulla Mohammed changed all that. From then on, it became a domestic issue, with others of the kind getting added on, en route to President Nasheed's resignation.

In the current context, the dividing-line between legitimate domestic concerns and selective xenophobia, targeting India, Maldives closest and powerful neighbour and best friend in times of extreme needs -- be it on security or economic front -- is becoming increasingly thin. It is however not about GMR or India. The world over, democracies have witnessed political parties and interest groups creating an electoral constituency out of xenophobia, like any other issue. In the immediate Indian context, relatively smaller neighbours like Pakistan and Bangladesh, Nepal and Sri Lanka have all deployed the anti-India weapon in political terms.

However, in the 21st century, there is a turnaround in those countries, and there is also a greater realisation for all of South Asia growing and developing together with the region's largest partner. India cannot be and should not be blamed for its size, which is both a political and geographical reality. It is also this size, in terms of area, population, economy and military, that is a strength that the region has to grow together on. In the case of Maldives, it is the size of the Indian military that helped neutralise the 1988 coup bid. It is the size of the Indian economy now that has offered solutions to Maldives' recurring problems on that score - which would also remain for a long time to come.

It may be good politics for some in Maldives to flag xenophobia in general, and anti-India feelings otherwise. It cannot however be good policy for the Maldivian State and the Maldivian people, whose daily needs the Government of India is concerned about even more - and has thus exempted the country, along with Bhutan, from all export-bans New Delhi may (have to) impose, owing to seasonal vagaries in agriculture production and domestic laws, including provincial regulation by State Governments, clamping down on the export of sand, the staple diet of the resort tourism sector in the Indian Ocean archipelago. To the extend President Waheed has reiterated that GMR and India are different issues, that is a good beginning - but just a beginning, where nothing of the kind was called for, again to begin with.

(The writer is a Senior Fellow at Observer Research Foundation)