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Troops surround Maldives parliament to protect president

Latest crackdown on opposition MPs threatens vital tourist economy

BANGKOK -- The 85-member parliament in the Maldives, a necklace of islands and atolls in the Indian Ocean, has come to resemble a military camp. On July 24, troops were deployed to stop opposition parliamentarians entering the legislature. Lawmakers who tried to breach the military cordon were forcibly carried out by soldiers, triggering clashes through the week in Male, the Maldivian capital, between lawmakers, the police and the military.

President Abdulla Yameen's embattled administration has become dependent on the 3,000-strong military to maintain its hold on the archipelago, which is better known for its high-end tourist resorts on idyllic, isolated islands. Yameen's hardline response was to scuttle efforts by an emboldened opposition to use the July 24 sitting of the Majlis, as the parliament is called, to seek a no-confidence vote against Abdulla Maseeh Mohamed, speaker of the house and a Yameen ally.

Opposition efforts to impeach the speaker had gained ground in early July, following more defections by parliamentarians from Yameen's ruling party, the Progressive Party of Maldives, to opposition ranks.

"On July 3, the opposition alliance submitted a no-confidence motion against the Speaker of Parliament, a Yameen crony, with 45 signatures from 85-member house," the opposition alliance, led by the Maldivian Democratic Party, said in a mid-July statement. It said 15 lawmakers from the ruling party had signed the motion, with 10 parliamentarians leaving the party soon after. Impeachment requires 43 votes.

Former Maldivian foreign minister Ahmed Naseem at an opposition press conference in Colombo in February. (Photo by Marwaan Macan-Markar)

Former Maldivian Foreign Minister Ahmed Naseem described the "unprecedented use of troops in the parliament" as Yameen's attempt to demonstrate his power to the public. "But actually he is trying hard to hang on to power, and this cannot go on," Naseem told the Nikkei Asian Review. "The people will rise up against Yameen's irregularities."

Western governments have condemned the military's takeover of the parliament. "The forcible closure of the nation's Majlis to its members; security forces surrounding and entering parliament; and the harassment, intimidation and arrests of elected members of parliament are deeply troubling," said a joint statement from 10 embassies based in Colombo, the capital of Sri Lanka, the Maldives' closest neighbor.

Yameen and his allies have fired back with an alternative view. The troops were deployed to protect the parliament from the opposition's call for "direct action" to force the no-confidence vote against the speaker, they said, in an effort to refute the perception that the "parliament has been taken over by the military". The president's office said that "the special measures taken by the security forces at the Parliament building" on July 24 were to "ensure the security and safety of the premises, as mandated by the Article 105 of the Constitution."

The increasingly authoritarian Yameen, in power since a controversial 2013 presidential election, has sent former government allies, opposition parliamentarians, journalists and political activists alike to jail. But it has not cowered the opposition, led by the charismatic former President Mohamed Nasheed, the country's first democratically-elected leader who is currently living in exile, and former President Maumoon Abdul Gayoom, Yameen's half-brother, who ruled the Maldives with an iron grip for three decades till 2008. In March this year, Nasheed and Gayoom, once bitter adversaries, closed ranks in the first, failed attempt to impeach the speaker.

Former Maldivian President Mohamed Nasheed at a press conference in Colombo in February.(Photo by Marwaan Macan-Markar)

However, Nasheed's MDP tasted victory in May during local elections in the country of 400,000 inhabitants, South Asia's smallest country. It got 70% of the vote in 21 of the country's 23 largest urban constituencies -- surprising gains that suggested Yameen's grip on power was tenuous. The polls were held amid opposition accusations that Yameen was mortgaging the Maldives to China, the country's largest international loan giver, and allegations of corruption and money-laundering linked to Yameen and his allies, which Yameen has denied.

Regional balance

Despite its size, the political currents sweeping across the Maldives have broad implications for South Asia, since the country straddles one of the world's busiest shipping lanes. Yameen's tilt towards China at the expense of India has not been lost on the region's analysts. Chinese loans of up to $741.6 million are funding three large infrastructure projects in the Maldives, accounting for 70% of the country's foreign debt. In exchange, Nasheed alleged that Yameen had given 16 strategically located islands to China.

India responded cautiously over the weekend to events in parliament. "Maldives is a very important neighbor of ours," said Gopal Bagley, an external affairs ministry spokesperson. "India wishes to see a stable, prosperous and peaceful Maldives in which aspirations of people of the Maldives are fulfilled."

"The two Asian powers are sizing each other up in the Indian Ocean," said Jyoti Malhotra, a consulting editor of the Indian Express, a national daily. "India believes Maldives is part of its sphere of influence, as does China. The resolution of this crisis will definitely demonstrate which power is stronger and rules the waves in this part of the world."

But there is little doubt why Yameen has warmed up to China. The spurt in large infrastructure projects could raise the economy to a higher growth path, a team from the International Monetary Fund said after visiting the country in July. "The current government is significantly scaling up infrastructure investment to achieve sustainable economic growth and diversify the economy," Philippe Karam, who led the IMF's mission, told the Nikkei Asian Review.

The $3.2 billion Maldivian economy has been built on earnings from tourism, which accounts for two thirds of nominal gross domestic product. The country's per capita income of $15,000 a year is the highest in South Asia. In June, the Maldives raised $200 million through the sale of its first sovereign bond in international markets. "This is as strong of an endorsement of economic policy as any government could hope for," finance minister Ahmed Munawar told the local media soon afterward.

Economic headwinds

But there are worrying issues ahead for the Maldivian economy, which, according to Fitch Rating, had gross foreign reserves of $501.2 million at the end of March, while usable reserves were $224.7 million. "The country has managed with similarly low reserve buffers for a number of years without experiencing an exchange rate shock, but foreign debt financing of large construction projects will increase the importance of foreign reserve buffers in the medium term."

Yet, there is another explanation for how the country manages its finances, whispered by commercial bankers and financial analysts in Colombo, which is home to a wealthy Maldivian diaspora and some political dissidents. "The Maldivian economy is controlled by 20 big families," a senior financial analyst said on condition of anonymity. "The government borrows money from these private families when they are stuck and struggling to find revenue."

So far, the lucrative tourism sector has been untouched by the political troubles. But the British government's Foreign and Commonwealth Office has issued a travel warning that could threaten the Maldives' money spinner. Fitch had struck a similar note of the Maldives' economic vulnerability before the military blockaded the parliament. "Changes in perceptions of safety," it noted, could undermine Maldives' attractiveness as a tourist destination.

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