Government of India Partners With Maldives for $500 Million Greater Malé Connectivity Project

India-Maldives external affairs meeting
India-Maldives external affairs meeting

The Indian government announced several development projects in the Maldives on Thursday. These are being taken keeping in mind the increase of connectivity with the island nation. These would also include a $ 500 million Greater Malé Connectivity Project (GMCP). The project is the largest infrastructure project in the country.

The funding of the project would get implemented through a USD 400 million line of credit and USD 100 million grant, as said by External Affairs Minister S Jaishankar said on Thursday. He held wide-ranging talks with the Maldivian FM Abdulla Shahid. The project will connect Male with three different islands – Villingili, Gulhifalhu, and Thilafushi (a new industrial zone). A port is also being built in Gulhifalhu under Indian LoC.

This connectivity was a key election promise of the Maldivian Democratic Party (MDP). After the election, the President of Maldives, Mohamed Solih, asked for India’s help to complete the project during his meeting with Jaishankar in September 2019.

Jaishankar said via twitter that, “India will fund the implementation of Greater Male Connectivity Project through a USD 400 million LOC & USD 100 million grant. This 6.7 km bridge project connecting Male with Gulhifalhu Port & Thilafushi industrial zone will help revitalize and transform the Maldivian economy.”

Along with this he also informed that a cargo ferry service will be started between India and Maldives which will, in turn, increase the trade and commerce between the two nations. An air bubble will get created between the two nations. This would largely help the people of both countries as it would increase the movement of people from and to both the countries for employment, tourism, medical emergencies. The Indian government also informed that they will extend the financial assistance to $ 250 million, due to the economic challenges the nation faced during the COVID-19 pandemic. The minister also announced that India will extend financial assistance to the country by soft loan arrangements, modalities of which are to be decided by both the parties.

The government also said that the Maldives is the first neighboring country with which India will create an Air Bubble. Thus, India would support the tourism and revenue collection of the country. Health protocols will be followed by both the countries as said by officials. The first flight under this Air Bubble will first take off on the 18th of August.

Connectivity project worth $500 million
Connectivity project worth $500 million

The relation between the two countries revived after President Solih was elected as the president of Maldives. They had worked pro-actively in several projects and upheld the “India first” and “Neighborhood First” policies. Since the change of government in the Maldives, total financial commitment from India via loans and grants has risen well over $ 200 billion.

This GMCP project would also include the construction of a bridge. The bridge-and-causeway link will span for a length of 6.7 km as per the data provided by the government. The bridge section will be of 2.08 km accompanied by a 780m causeway and 3.87 km embankment and causeway section. The Ministry of External Affairs, said, “Once completed, this landmark project will streamline connectivity between the four islands, thereby boosting economic activity, generating employment and promoting holistic urban development in the Male region.”

The ferry service between the two countries will also promote the growth of both the countries and boost sea connectivity which will boost exports and imports and let the two countries indulge in bilateral trade. The Ministry of External Affairs, said, “The cargo ferry service will enhance sea connectivity and provide predictability in supplies for importers in Maldives and exporters in India. It will also reduce logistics costs and times for traders.”

The meeting also said about Shahid India’s quota to renew the supply of essential commodities to the Maldives. This would be renewed from 2020-21. The Ministry said, “The cargo ferry service will enhance sea connectivity and provide predictability in supplies for importers in Maldives and exporters in India. It will also reduce logistics costs and times for traders.”

The Maldivian government has projected a drop of 11 percentage in its GDP, while the world bank estimated the drop to be about 13 to 14 percentage. The financial assistance provided by India to the country will be the first assistance the Indian Government will provide to any country to respond to the COVID-19 pandemic. This would tremendously help the Maldivian government get over the financial crisis as their main tourism and fish exports got affected due to the pandemic. While imports to India from the Maldives have fallen, exports from India to the Maldives have increased greatly. India is now the second-largest exporter to the Maldives and proved to be a reliable supply partner.

Under the Line of Credit extended by India to the Maldives, seven big projects are being implemented. The total worth is estimated to be around $ 800 million. The projects include water supply and sewerage systems on 34 islands, Addu Development Project-Road Development and Reclamation, Expansion of Maldives Industrial Fishery Companies Facilities, Gulhifalhu Port Project, Hanimadhoo International Airport Redevelopment, construction of international cricket ground and cancer hospital in Hulhumale.

These projects are expected to change the economy of the island nation for good and also make a good relationship between the two countries, taking it to new heights.




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