The Indian government has expressed concern over continuing political instability in the Maldives, following the murder of Progressive Party of the Maldives (PPM) MP Afrasheem Ali this week.
In a statement on Thursday, India’s External Affairs Ministry said it had “consistently emphasised that peace and stability are necessary prerequisites to the firm implantation of democracy, as well as for the economic growth and prosperity of the people of Maldives.”
“We call upon all parties in Maldives to continue to work towards facilitating an early and commonly acceptable internal solution to the political impasse in the country. In this context, India urges the government of Maldives and all political parties to adhere strictly to democratic principles and the rule of law thus paving the way for the holding of free, fair and credible elections. Violence should find no place in democracies,” the Ministry stated.
India also called on the Maldivian government “to ensure a propitious climate for foreign investments, which have a direct bearing on the economic growth and development of Maldives.”
The latter remark comes after parties in the ruling coalition last month stepped up rhetoric calling for nationalisation of Ibrahim Nasir International Airport (INIA), currently being developed and managed by Indian firm GMR in the Maldives’ single largest foreign investment.
Following the controversial transfer of power on February 7, President Dr Mohamed Waheed Hassan’s government has swung between issuing reassurances within diplomatic circles that Indian investments in the country would be protected, while locally stepping up nationalisation rhetoric.
Last week, GMR’s Airports CFO Sidharth Kapur told Indian television channel CNBC that the dispute could affect the country’s investment climate.
“While we have invested both debt and equity into this project, these kind of problems naturally affect the investment climate of any region,” said Kapur.
Discussing the GMR case last week, the Maldives National Chamber of Commerce and Industries (MNCCI) assured Minivan News that investor confidence was not being harmed, though the body did describe the investment climate as “challenging”.
India meanwhile recently granted the Maldives a further US$25 million as part of a US$100 million standby credit facility agreed during last November’s official visit from Prime Minister Manmoham Singh.
The deal represents the third instalment of the credit facility, with the previous two instalments having amounted to US$50 million. The previous tranche of US$30 million was released following President Waheed’s first official visit to India in May.
The assistance comes at a time the Maldives is facing a crippling financial position.
Minister of Finance Abdulla Jihad told parliament’s Finance Committee that this year’s budget deficit is set to be double the original estimate of MVR 3 billion (US$195million).
Jihad told Parliament’s Finance Committee that state spending this year, MVR 9 billion (US$590 million), had outstripped earnings by 28 percent.