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OP-ED: AUKUS: Cold War Rehashed?

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The 20th century was marked with strife – actual and proxy wars ravaged the earth, irrevocably changing the geopolitical landscape and effectively setting back humanity by several decades. The multi-decade tension between the then Soviet Union and the United States, supported by their respective allies, created conflicts across the globe. Historians point to the US led 1947 Truman Doctrine as the start to the Cold War and the dissolution of the Soviet Union in 1991 as the end point of this massive conflict.

Low key photography of grungy old Soviet Union and United States of America flags. USSR, CCCP, USA.

Aside from the nuclear arsenal development and conventional military deployment, the struggle for dominance was expressed via indirect means such as psychological warfare, propaganda campaigns, espionage, far-reaching embargoes, rivalry at sports events and technological competitions such as the Space Race.

Peace did not seem to be in cards for humanity following the dissolution of Soviet Union. Proxy wars continue to plague Middle East. Many of the economic and social tensions that were exploited to fuel Cold War competition in parts of the Third World remain acute. The breakdown of state control in a number of areas formerly ruled by communist governments produced new civil and ethnic conflicts, particularly in the former Yugoslavia. In Central and Eastern Europe, the end of the Cold War has ushered in an era of economic growth and an increase in the number of liberal democracies, while in other parts of the world, such as Afghanistan, independence was accompanied by state failure.

The fall out was harder on the world. And yet, power brokers cannot refrain from hegemonistic adventures.

The latest to this is the trilateral security partnership signed between the United States, United Kingdom, and Australia, titled AUKUS. The agreement was agreed on September 15. AUKUS, a de facto trilateral security alliance in traditional international politics, is the only multilateral military security alliance in the Asia-Pacific in the past 30 years.

The initiative is clearly another effort to keep China and the rise of East in ‘check’, the first being the Quad – an alliance between United States, Australia, India, and Japan. Under the AUKUS pact, the US and UK will help Australia build at least eight nuclear-powered submarines, the first time that Washington and London will be sharing sensitive nuclear submarine technology with Canberra.

The technology is sensitive as US and British submarine reactors use uranium that is enriched at 93 to 97 per cent, and anything above 90 per cent is considered “weapons-grade” uranium with potentially dangerous implications.

There are currently only six countries with nuclear-powered submarines –US, Russia, China, UK, France and India. The US is the world leader in this area, with 68 nuclear-powered submarines, while Russia has 29 and China has 12, according to the International Institute for Strategic Studies.

US President Joe Biden has claimed the China-US relations will be the battle of the century, hailing this conflict as the litmus test for which is better – democracy or autocracy.

Experts have already warned of the economic and ecological fall out from this. An opinion piece released by Project Syndicate said that such militaristic advances will only increase resource consumption and cause more environmental damage. The Group warned that this will ‘divert funding that could otherwise be allocated toward climate-change mitigation and adaptation, impede global cooperation, and undermine human well-being’.

As of now, most of Asia is reeling from the debilitating effects of the covid-19 pandemic. Asian nations, such as our Maldives, face immense challenges in the form of climate change. A nuclear arms race in the region would destabilize years of development and economic growth.

When the Cold War lingered across the globe, most of Asian nations, especially South East Asian nations, chose non-alignment. The Non-Alignment Movement started in the 1950’s, ensured that nations were free from the polarizing conflict.

Non-alignment would not be easy in this time and age. The pandemic was a stark reminder of this. A microscopic virus showed human frailty and the importance of working together for human advancement. An arms race would only result in human lives lost.

History shows us that nations tend to engage in meaningless shows of force and expansion at the end of their ‘greatness’. The empires created from these expansions created the massive blackholes of military spending, which drained the public coffers.

Present day US is, no surprise, in decline. The nation’s inability to take care of the neediest in their society is frankly appalling. America claims supremacy in all fronts of civic leadership. Yet, in the past years, we have seen US Senator Bernard Sanders head to Canada with US citizens to fill their medical prescriptions. We have seen peaceful Black Lives Matters protestors facing police brutality. We have seen home grown radical extremists shooting up schools. We have seen former President Donald Trump’s supporters break into the Capitol, calling to ‘Hang Mike Pence’. We have seen a nation divided over a covid vaccine that continue to kill thousands.

The UK fares no better. The country is plagued by increasing economic inequality. UK politicians are gummed up in Brexit – a deal, which was promised to be ‘oven ready’. Brits, with their self-deprecating humor, can take the mickey out of any situation. However, how long can the Johnson administration continue to claim that things are on plan?

Perhaps, the most troubling aspect of these alliances is Japan. The country was the victim of the nuclear attacks by the US. Japan continues to mark the attacks on Hiroshima and Nagasaki to this date. The country experienced the debilitating effects of the Fukushima meltdown. And yet, the country continues to engage in agreements and alliances that leave room to create a nuclear arms race.

The 20th century was a century of conflict and abject human misery. Nations are still reeling from the lingering effects of it. Let not 21st century be a century of conflict and abject misery.

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Is the Maldives walking in the footsteps of Greece, towards bankruptcy?

Hamdhan Shakeel

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In 2015 the European Union was taken by storm over news that one of its member nations had defaulted on a €1.6 billion payment to the International Monetary Foundation. This was the first time a member of the European Union had defaulted and faced bankruptcy. The nation in question was the home of the once mighty civilization, Greece.

The fall of the Greek economy was the culmination of inflation, poor fiscal management and fraud. Prior to joining the European Union, Greek pursued an expansionary fiscal policy including a universal healthcare system which proved itself to be a major burden for the government. While the government’s expenditure was significantly raised in the 1980’s its revenue remained much same.

A contributing factor to this was the fact that it was a norm in Greece to underreport income. This led to a serious loss in state revenue as the state was not receiving the annually projected income from taxes. This was further exacerbated due to massive tax cuts for the wealthy. This ultimately led to a rising inflation and a massive debt on the state as it desperately attempted to manage the economy.

For Greece, the European Union and its European Monetary Union (EMU) was the means to solve the government debt and inflation problem. However, joining the European Union also meant that Greece had to conform to the strict regulations by the European Union, outlined in the 1992 Maastrihct Treaty. Under this treaty member countries of the European Union would have to limit the Government deficit to 3% of the GDP and its debt to 60% of its GDP.

After spending close to a decade trying to mitigate its debts, Greece was finally granted a conditional acceptance into the European Monetary Union in 2001.

However, the truth was that Greece never managed to lower its government’s deficit and the state debt to the thresholds outlined in the Maastricht Treaty.

While the initial period following its entrance into the Euro zone was marked with a slight economic recovery, the underlying issues of weak fiscal management still persisted. The situation as further worsened by the lack of revenue for the state. Systemic tax-evasion was ingrained in the society as both the high income and low income underreported their spending leading to a drastically low social spending expenditure. In 2000, the total social spending expenditure in Greece was marked as 19.3% of the GDP where as in the same period it was marked as 26.2% in Germany.

Entry into Euro zone also allowed the Greek government to borrow massive loans cheaply form fellow member states and organizations. While the loans were meant to finance the government operations, it also proved to be an additional burden on the government as Greek’s income was still at the same levels as to when it entered the Euro zone.

The 2007 financial crisis unveiled the critical condition of the Greek economy. The recession forced the Greek government to finally address the massive deficit and debt as its tax revenues dried up. In 2010 U.S. financial regulators graded Greek bonds as “junk” forcing the Greek government to seek bailout through the International monetary Foundation and other credit agencies. The bailout was given under strict reformation conditions including higher tax revenues and budget cuts.

This led to a massive recession in Greece as unemployment reached of 25% just 2 years after the U.S. regulators deemed Greek bonds as “junk”.

The unemployment further contributed to a decrease in tax revenues, which finally cascaded into the state losing a significant chunk of its revenue. As the economy crumbled, the social conditions in Greek also worsened where crime, homelessness and drug abuse rose to unprecedented levels.

The Maldives is undeniably walking in the footsteps of Greece towards an inevitable state default and bankruptcy. The current administrations staunch refusal to adhere to the advice of the World Bank and other credit rating agency has led to a situation where the country is now standing on the threshold of bankruptcy.

The MVR 36.925 billion budget was passed by the Parliament without summoning the heads of the financial institutions in the Maldives nor without proper analysis of the budget. For financial analysts, implementing a budget with 34% of its revenue unsecured is alarming. The unprecedented MVR 9.760 billion deficit budget is reminiscent of the massive deficit-ridden budgets adopted by the Greek government prior to its downfall.

A more serious concern lies with the current administration’s reckless policy of borrowing from the central bank.  Since 2020 the Government of Maldives has against the advice of IMF and World Bank, chosen to overdraft from the PBA at the Central Bank. This was done after freezing subsection (a), (d) and (e) of the Section 32 of the Fiscal Responsibility Act.

On 17th November 2021 the Parliament chose to suspend the sections of the Fiscal Responsibility Act which prevents indiscriminate printing of money for a third time since 2020. While initially promised to repay in 1 years’ time, the Government’s debt to the Central bank in the form of overdrafts has now racked up in excess of MVR 6.5 billion.

While the Government continues to indiscriminately borrow form both the central bank and foreign sources, the state debt is set to increase by an unpreceded MVR 11 billion this year, rising the total state debt to MVR 100 billion or the equivalent of 105% of the national GDP. The current administrations poor fiscal management is evident in the fact that from the MVR 100 billion debt, over MVR 50 billion was incurred over just the past 3 years.

While many of the international credit rating agencies have repeatedly lowered its rating on the Maldives, due to the government’s veil of secrecy surrounding its financial standings, it is unclear whether the Government is on the verge of bankruptcy or it is already bankrupt. One undeniable fact that remains is that the Government of Maldives is walking in the footsteps of Greece, towards a massive default and bankruptcy.

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“India first” policy in action: Maldives Foreign Ministry & Indian media voice against the people of Maldives.

Hamdhan Shakeel

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On 17th November 2021 the Foreign Ministry of Maldives published a statement, denouncing and disregarding the public concerns surrounding the controversial and secretive military agreements between the Maldives and India. The statement is being used as fuel by Indian media to spread misinformation surrounding the legitimate concerns of the Maldivians who are calling for the removal of Indian military presence in the Maldives.

The statement, which curiously mislabeled the “Indian Military Out” as “India Out” has been espoused by Indian media as the statement fundamentally disregarded the concerns of a vast majority of the public, labeling the calls for removal of Indian military presence in the Maldives and transparency surrounding the agreement as “False Allegations” and the sentiments of a “Small group of individuals”.

The legitimacy of the concerns are validated by the acknowledgement from several high-profile individuals even within the current administration including Chairperson of the current ruling party MP Hassan Latheef.

O 13th November 2021 the Chairperson of the current main ruling party MDP’s MP Hassan Latheef also acknowledged the legitimacy of the public concerns and called for transparency in the military agreements. Tweeting on the issue, MP Hassan Latheef noted that it is imperative that the government adopts a transparent approach, to clear the doubts and concerns of the public on the military agreement.

Moreover, based on the overwhelming support for the movement, it cannot be simply dismissed as the sentiments of a “small group of individuals” as the 5 largest rallies held since the 2018 Presidential Election has been to call for the removal of Indian military presence in the Maldives.

While Indian ultra-nationalistic new channels like WION has used this statement to discredit the “Indian Military Out” movement, the truth of the matter is to the contrary.

In a segment by the WION, they claimed that there was no Indian military presence in Malé. While this is technically true, the Indian military presence is stationed around in other key parts of the Maldives such as the Hanimaadhoo Airport, Villingili Indian Radar stations, Kaadehdhoo Airport and Gan International Airport and the UTF naval base.

Another key misinformation disseminated by Indian media based on the statement by the Foreign Ministry of Maldives is that the “small group of individuals” were calling for “India Out” instead of “Indian military Out”. Indian media groups did not hesitate to label the Maldivian public concerns as anti-Indian sentiments targeted at the Indian expat population in the Maldives.

Ultra-right-wing media groups such as WION labelled the calls for the removal of Indian military presence in the Maldives as an attack against the Indian expat population in the Maldives. Their coverage of the issue portrayed the Maldives according to their age-old image of the Maldives being their “backyard”.

Moreover, while the Indian media groups are stating that there is no Indian military presence in the Maldives, the current Maldivian Defence Minister Mariya Didi confirms to the contrary. According to the Defence Minister Mariya Didi, Indian military personnel are present in the Maldives. On 3rd November 2021 Mariya Didi stated that Indian military personnel in the Maldives were unarmed, confirming their presence.

The statement by the current administration is testament to their resolve to hold on to the military agreements with India, even if it is at the cost of its own people. When President Ibrahim Mohamed Solih stated on 17th December 2018 that his administration will adopt a “India first” policy, many assumed it would be in terms of foreign policy shifting towards India and its allies. However, the true meaning of “India first” now seems to be that the President Solih administration will value Indian interests over all, even those of its own citizens.

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Loan sharks & debt collectors – A new class of criminals

MNN

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The current recession in the wake of the COVID-19 pandemic has meant that the once flourishing economy has been brought to its knees with the nations biggest source of income being forced to close. This has meant that a significant proportion of the working population experienced a loss of income in some form.

According to state authorities, more than 40% of the working population experienced a loss to their income. This factor combined with the fact that the capital of the Maldives being one the most expensive cities to live in in comparison to the average income of a state employee, the living conditions of the general population has been undeniably lowered.

The ensuing desperation to house and feed their families have given way for a much more sinister wave of criminals who prey on the desperate. Illegal loan sharks have taken advantage of the desperation to lure hundreds of young and old people into high interest illegal loans.

According to one man who spoke to MNN on the condition of remaining anonymous, he got himself into such a situation after he “borrowed” money from a man recommended to him by a colleague. Ahmed (not real name) revealed that he was forced to borrow money during the lockdown phase of the COVID-19 pandemic to pay rent. The man who works in the private sector had no means to pay his rent and food as his income was disrupted due to the lockdown.

Ahmed was promised that he could pay back the money one month after the lockdown had ended. But once the lockdown was over, the man immediately contacted him and demanded full return and more of the borrowed money. The loan shark claimed that he suffered losses due to lending the money and demanded almost twice the sum of which he lent.

Ahmed stated that few weeks after that he received visitors from the loan shark who demanded immediate return of the money. The men threatened to attack Ahmed and his family if the money and the “compensation” was not returned in one weeks’ time.

Ahmed stated that this time, he was forced to borrow from a family friend to pay back the debt to the loan shark. He also stated that his colleague who introduced him to the loan shark also had a similar experience once the lockdown had ended and the loan shark had sent his debt collectors.

While investigating this issue, MNN came across additional 3 cases where people were forced to borrow from loan sharks and had to face debt collectors. They in turn claimed that they knew others who were also facing a similar situation.

This is but one such story of what could possibly be hundreds of cases where young and desperate men and women are lured into debt traps by loan sharks. While there has been no officially recorded cases of anyone being killed by debt collectors or loan sharks, based on the escalation of crimes in the Maldives, it is just a matter of years or less before people are killed over their debts. State authorities and the central bank of the nation should take the initiative in raising awareness on these illegal loan sharks and the dangers that follow from racking up debts with the loan sharks before any lives is lost.

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