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The Global Land Rush at a Geostrategic Enclave. Drivers, Impacts, and Implications for the Maldives.



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The Global Land Rush at a Geostrategic Enclave.
Drivers, Impacts, and Implications for the Maldives.
Table of Contents
Introduction ................................................................................................................................ 3
1. The Global Land Rush ....................................................................................................... 4
1.1 Figures and Definitions .............................................................................................. 5
1.2 Drivers, Motivations, and Tactics. ............................................................................. 7
1.2.1 International Drivers........................................................................................... 7
1.2.2 The Role of Host States ...................................................................................... 8
2 The Maldives: A Flourishing Land Grab Paradise ............................................................. 9
2.1 Socio-Economic and Political Situation ..................................................................... 9
2.2 A Diplomatic Shift in Economic and Foreign Policy............................................... 10
2.3 Colliding Interests at a Geostrategic Juncture .......................................................... 11
2.3.1 The Ibrahim Nasir International Airport .......................................................... 13
2.3.2 The China-Maldives Friendship Bridge and Increased Aid ............................. 14
2.4 Facilitating Land Grabbing and Corruption ............................................................. 15
2.4.1 Special Economic Zones .................................................................................. 15
2.4.2 Foreign Land Ownership Reform..................................................................... 17
2.4.3 No Bid Contracts and Defamation Laws .......................................................... 17
2.4.4 Free Trade Agreement with China ................................................................... 18
3 Current and Potential Impacts and Risks ......................................................................... 20
3.1 Debt as a Disciplining Regime: The Denationalization of National Territory......... 20
3.2 From Soft to Hard Power ......................................................................................... 22
3.3 Increased Radicalisation ........................................................................................... 23
3.4 Authoritarianism, Corruption, and Isolation ............................................................ 24
3.5 Expulsion, Exclusion, or Adverse Incorporation?.................................................... 25
3.6 Environmental and Climate Impacts ........................................................................ 27
4 Conclusions and Policy Recommendations ..................................................................... 28
References ................................................................................................................................ 32
In recent years, there has been a global rush for land at a scale that is unprecedented since the
colonial era. The driving forces behind this land rush are to be found in a complex combination
between increased food, energy, and investment needs of capitalist economies with their desires
of geopolitical expansion. Although land grabs are occurring worldwide, it is in countries where
the protection of human rights is low, or inexistent, that they have reached the most alarming
peaks. Due to a combination of international and domestic drivers, the Maldives, known
internationally as a luxury tourism destination, has become a flourishing land grab paradise.
While research concentrating on the impacts of climate change on this small island developing
state has made substantial progress, very little attention has been given to the impacts of recent
flows of foreign direct investment in this authoritarian regime. Based on desk research, and
using a political economy and multi-scalar framework, this report is a first attempt to explore
how the global land rush has prospered in the Maldives since the coup that took place in 2012.
It aims not only to shed light on the nature of the international and domestic drivers involved,
but also on its current and potential implications for the Maldives and beyond. The report is
structured as follows. Firstly, it introduces the phenomenon of land grabs globally by
concentrating on its definitions, drivers, figures, actors, and processes. Secondly, it explores
how the socio-political and economic situation of the Maldives, combined with its position in
a geostrategic enclave, has enabled the expansion of land grabbing. Thirdly, it analyses the
current and potential social and security implications of the phenomenon at the international,
regional and domestic levels. Finally, it addresses policy incoherencies and gaps to conclude
with recommendations.
This is a working draft. The report was prepared at the request of the former President of the
Maldives, Mohamed Nasheed.
1. The Global Land Rush
Since the convergence of multiple global crises in recent years, there has been an intense
revaluation of land and a rush to acquire it particularly in the Global South (Borras and Franco
2010). Land grabs can be defined as ‘the capturing of control of relatively vast tracts of land
and other natural resources through a variety of mechanisms and forms that involve large-scale
capital that often shifts resource use orientation into extractive character, whether for
international or domestic purposes, as capital’s response to the convergence of food, energy
and financial crises, climate change mitigation imperatives, and demands for resources from
newer hubs of global capital’ (Borras et al. 2012:851). While far from being a new phenomenon,
today we see new characteristics that make land grabs distinct from the colonial and imperial
periods. Particularly, and crucially, land grabbing today takes place in a world of ‘formally’
recognized sovereign-states often through legal, yet contested processes. Rather than imperial
grab through force, the mechanism to control and acquire land and other natural resources is
often Foreign Direct Investment (FDI) or direct buying or leasing (Sassen 2013).
Moreover, in a globalized and neoliberal world, the relationship between natural resources and
capital is shaped by ‘glocal’ political economies that articulate local patterns of resource
exploitation to global markets (Swyngedouw 1997). In this context of increased
interdependence, the control and authority over land is increasingly de-territorialized by the
formal transfer of control to foreign interests and by their increasing interactions with
transnational governance practices such as investment and trade (Margulis et al. 2013: 12).
Today, the actors involved are a complex web of transnational and national corporations, banks,
hedge funds, sovereign wealth funds, and local political elites. Another novelty is that 40% of
the land transactions are now South-South. New national players include BRICS countries,
powerful middle-income countries, and new OECD countries such as South Korea and the Gulf
states (McMichael 2014). Although not all land transactions can be considered as land grabs,
the Tirana Declaration of 2011 gives specific criteria in order to determine which land deals
can be considered as such (see Box 1).
1.1 Figures and Definitions
Given their rapid increase, and the lack of information and transparency surrounding these land
transactions, it is extremely difficult to quantify the precise extent of this phenomenon.
However, in 2009, the World Bank noted that in less than a year investors had expressed interest
in approximately 56 million hectares of land globally (Deininger and Byerlee 2011). Moreover,
data from the Land Matrix
conservatively estimates the amount of farmland acquired
transnationally since the year 2000 in 63 low- and middle-income countries at 40 million
hectares (Land Matrix 2017). To these estimates we must add the immense amount of land that
changes hands within the same country, all the transactions that cover areas smaller than 200
hectares, and all of those whose main purpose is not farmland or that do not imply a change of
rights over land (because the previous land was uninhabited). With regards to their geographical
occurrence, most of the targeted land is situated in Africa, but there is also an increasing
The Land Matrix is a global and independent land monitoring initiative that promotes transparency and
accountability in decisions over land and investment The Land Matrix monitors land deals that: i) Entail a transfer
of rights to use, control or ownership of land through sale, lease or concession, ii) Have been initiated since the
year 2000; iii) Cover an area of 200 hectares or more; iv) Imply the potential conversion of land from smallholder
production, local community use or important ecosystem service provision to commercial use. (Land Matrix 2017).
Land grabs are acquisitions or concessions that that are one or more of the following:
1) In violation of human rights, particularly the equal rights of women;
2) Not based on free, prior and informed consent of the affected land-users;
3) Not based on a thorough assessment, or are in disregard of social, economic and
environmental impacts, including the way they are gendered;
4) Not based on transparent contracts that specify clear and binding commitments about
activities, employment and benefits sharing;
5) Not based on effective democratic planning, independent oversight and meaningful
Source: International Land Coalition (2011:2)
expansion of the phenomenon in Asia and Latin America. Using these available figures on
farmland, and through a network analysis, researchers have mapped the land trading system
that links countries via the transfer of land through purchase or lease (Seaquist et al. 2014). The
map below shows the extent to which each country is an importer or exporter of land and the
number of links each investor has with other partners.
Source: Seaquist et al. 2014
1.2 Drivers, Motivations, and Tactics.
1.2.1 International Drivers
The key motivations for investors to acquire land abroad have been located in the new global
demands for food and energy, as well as in the needs of growing economies to find new and
safer investments in a highly volatile market. However, these drivers do not depict the whole
picture. Although it is certain that many of the main actors who are involved in trans-border
land transactions are facing food, water, and energy shortages domestically (eg. China, India,
South Africa, Korea, Saudi Arabia, Egypt), all of these nations are also undergoing spectacular
economic and political changes (Sebastian and Warner 2014: 9). Thus, asides from
representing ‘spatial fixes’ (Harvey 2005) for their overproduction, resource grabs can also
represent a proxy for geopolitical influence that becomes intertwined with fulfilling more
immediate needs (Sebastian and Warner 2014). As research in farmland investment has shown,
actors often engage in land acquisition processes without the intention or ability to use the land
for the purpose mentioned in the plan or development license (McCarthy 2012; Vigil 2017).
Although international actors and rules have played an enormous role, developing countries
burdened by huge amounts of debt, have been actively seeking foreign direct investment as a
means to overcome domestic challenges, increase labour opportunities, and foster knowledge
and technological exchanges. However, the depicted ‘win-win’ scenarios rarely materialise in
contexts of unbalanced partnerships and weak governance. Research worldwide is showing that
FDI is leading to national land expropriation in two ways. First, the entrance of foreign investors
is now permitted and facilitated by the burden of the debt regime affecting most developing
countries (Sassen 2010), making states lose land to the highest bidder. These economic or
market sales are ‘voluntary’ in the sense that people are not coerced or legally obliged to sell to
any particular party or at any particular price (Hall 2013: 1592). However, with little other
choice than to give up their basic assets for continued growth, the power of ‘debt as a
disciplining regime’ has never been so clear (Sassen 2013). Second, in countries with a lack of
rule of law and democratic procedures, mechanisms of dispossession often involve the use of
legal or political power and/or (the threat) of use of force. The people losing land may
sometimes receive compensation, but there is no market transaction between a willing buyer
and a willing seller (Hall et al. 2013). These ‘extra-economic’ coercions need not, however,
always imply brutal force. They can take much subtler forms including the use of price
incentives and disincentives, land-use zoning, and production quotas (Borras et al. 2017: 2).
1.2.2 The Role of Host States
Host states have facilitated the development of land grabbing by changing national legislation
in ways that encourage the deepened privatization and commodification of natural resources,
the dismantlement of social and environmental regulations of economic activities, and by
promoting investment and development policies which increase corporate control over basic
assets (Cotula, 2012a; White et al., 2012). A combination of the following ‘reregulation’
activities, that only national governments have the absolute authority to perform, have paved
the road: ‘1) invention/justification of the need for large-scale land investments; 2) definition,
reclassification and quantification of what is marginal, under-utilized and empty lands; 3)
identification of these particular types of lands; 4) acquisition/appropriation of these lands, and
5) reallocation/disposition of these lands to investors’ (Borras et al. 2013).
Whether investments turn out to be the socio-environmental and economic opportunities that
they use to legitimise themselves, is extremely dependant on the regime type in place. States
where land grabbing unfolds tend to share a lack of democracy and respect of human rights, a
lack of transparency and enforcement of legal instruments, inadequate or weak tenure systems,
and high levels of corruption. While foreign direct investment is certainly not exclusive to
authoritarian or undemocratic regimes or necessarily negative or undesirable, for that matter
what makes FDI in authoritarian regimes unique is that its profits are principally subject to
rent seeking by governments (Bak and Moon 2016). How they unfold in practice is highly
context specific, but in general terms, these processes can have huge ramifications not only at
the local and national levels, but also regionally and even internationally. To cease the particular
complexities of the phenomenon, the next section analyses how these dynamics are unfolding
in an increasingly important geostrategic location for investment.
2 The Maldives: A Flourishing Land Grab Paradise
The Republic of the Maldives, located in the Indian Ocean, consists of 1190 coral islands
formed around 26 natural ring-like atolls that cover 850km (UNDP 2014). Known
internationally for its natural beauty and luxury resorts, it is a country faced with huge climatic,
socio-economic, and political problems. On one hand, with an average ground level elevation
of 1.5 meters, it is one of the world’s most vulnerable countries to the effects of climate change.
On the other hand, and more invisibly to international attention, a combination of
authoritarianism, radicalization, debt, and its location at a geostrategic juncture, have turned the
paradisiac islands into a perfect theatre for land grabbing to flourish.
2.1 Socio-Economic and Political Situation
The Maldives initiated its trade liberalization and economic reform program in the 1980s by
removing certain import quotas and allowing private sector involvement in some of the export
businesses. The liberalization of investment regulations, accompanied by export preferences,
made the country attractive for FDI at a moment when investors were ‘quota hoping’ in the
region (Dissanayake and Jayaratne 2011: 100-104). Despite high GDP growth thanks to the
booming high luxury tourism industry, which allowed the Maldives to pass to the status of
middle-income country in 2011, the benefits of such growth have been very unevenly
distributed among local populations, with government, elites, and investors reaping most of the
benefits (Scheyvens 2011)
. Concomitantly, fisheries which remain the main employment
sector for Maldivians, have been increasingly side-lined. (Manabu and Masanori 2016)
Despite advances, a large number of people have been moving in and out of poverty, instead of
out of poverty permanently, with increasing rates of income inequality (Dissanayake and
Jayaratne 2011: 107). The unequal distribution of income can be explained to a large extent by
the political situation of a country that was ruled for thirty years by the authoritarian regime of
President Gayoom, who relied on corrupt and nepotistic streams to expand his power base.
Although it is not the aim of this report to analyse how investment in tourism has led to land grabs, this is a
certain trend in the Maldives that requires investigation.
After huge domestic and international pressure on the regime following the 2004 Tsunami,
Gayoom was obliged to hold free and fair elections in 2008 which brought Mohamed Nasheed,
a democracy and human rights activist, to the Presidency. While the change in Constitution in
2008 together with the extension of rights appeared as revolutionary, a radical and permanent
shift proved impossible to maintain in a country where changes had not become
institutionalized (Rasheed 2004). In 2012, President Nasheed was ousted in a coup d’état which
replaced him with the key figures that had served the previous dictatorial regime. The long-
term developmental challenges faced by this small and vulnerable country, that ranks 105th in
terms of Human Development (UNDP 2014), have only been compounded since the arrival of
President Abdulla Yameen Gayoom in 2013. Since then, the country has experienced a
downward spiral of gross human rights violations, increased Islamic radicalization, aggressions
to the opposition, unfair trials, huge corruption scandals, and the annihilation of basic freedoms
of expression.
2.2 A Diplomatic Shift in Economic and Foreign Policy
President Yameen has pursued an economic and foreign policy driven by the dual aims of
attracting larger flows of FDI while accommodating the interests of investment partners that
would agree either to help reinforce the current regime or not interfere with domestic affairs.
Supported by Islamic radicals that have been progressively taking hold of the country since
2004, and turning the Maldives into one of the strictest Islamic Republics on earth (see Envoyé
special 2016), President Yameen has shifted towards partners whose aid and foreign investment
would not imply political or ideological conditionality. While aid received from OECD
countries tends to be linked to a number of political preconditions to improve human rights,
civil liberties and enhance accountability and transparency, China’s aid flow is not correlated
to regime types (Tseng and Krog 2017). The huge financial capacities of China linked to their
‘no strings attached’ policies of aid and investment and relatively fewer standards of
environmental and social protection have been very attractive to many authoritarian regimes
around the world (Wang and Zadek 2016). President Yameen has looked hopeful to the east
stating that: economic cooperation with China does not pose the same challenges to remaining
an Islamic state as those posed by ‘western colonial powers’ (Naish 2015).
2.3 Colliding Interests at a Geostrategic Juncture
The Maldives hold a key geostrategic position in the middle of the Indian Ocean which hosts
the world’s most important Sea Lanes of Communication (SLOCs). With the rise of China and
India as global economic powers, both holding direct strategic and security interests in the
Indian Ocean, the Maldives have emerged at the centre stage of big power politics (Baruah
2015). China’s principal instrument of expanding its strategic space in South Asia has been to
channel huge economic aid into smaller countries like the Maldives, Sri Lanka, and Nepal
(Jonas 2017: 19). With an economy that is four times as powerful as that of India, side-lining
the traditional partner of the Maldives has not been a difficult endeavour. Although driven by
similar geostrategic interests, their diverging political ideologies democracy in India versus
authoritarianism in China is striking (Bhaskar 2010: 311). This difference has fundamental
socio-political impacts over the countries in which each power has influence.
In recent years, China has perceived the Indian Ocean to be a weak link in its energy and
resources lifeline to the Middle East and Africa and a ‘risk area’ for its merchant ships going to
both regions in search of markets for its goods (Copper 2016: 50). Chinese influence in the
Maldives, dubbed as ‘soft power diplomacy’ (Nye 2006), started materialising through
spectacular tourist presence in the islands in what can be seen as a form of ‘aid via tourism’. In
2010, the Chinese outnumbered tourists from all other countries and after the coup, in 2012,
China announced a $500 million foreign aid package. This is extremely large considering the
amount received from other donors and the size and population of the Maldives (Copper 2016:
82-83) and it served to prepare the ground for future collaborations on investment and trade to
emerge. China’s interests in the Maldives grew in the context of the ‘One Belt, One Road
initiative (OBOR) launched by President Xi Jiping in 2013. The OBOR is comprised of two
components: The Maritime Silk Road Initiative (MSRI) and the Silk Road Economic Belt
(SREB) (see Figure 2). It constitutes a massive geopolitical project that aims to construct built
landscapes to enable flows of trade and investment by ‘promoting economic cooperation and
connectivity’ between Asia, the Middle East, Africa, and Europe (Blanchard and Flint 2017;
Lehr 2017).
Source: Reuters 2017
In order to develop this massive project, China has vigorously pursued close relations with key
partners including the Maldives and Saudi Arabia. In a historical visit from the Chinese
President Xi Jinping in September 2014, China concluded a Memorandum of Understanding
by which the Maldives officially joined the MSRI (Blanchard 2017). Moreover, since it is in it
is the Middle East where the two routes come together for Europe and Africa, Saudi Arabia is
equally important to the project. Billionaire contracts and trade deals have already been signed
between China and Saudi Arabia and ties are expected to grow as Saudi aligns its own domestic
economic priorities with those of OBOR (Lehr 2017). Given that the OBOR initiatives involve
a moving away from the ‘harsh requirements’ and interference with ‘internal affairs and
sovereignty of applicant countries’ that characterize the Asian Development Bank, the World
Bank and the International Monetary Fund (Sidaway and Woon 2017: 6), it is not surprising
that autocratic regimes would jump at the economic opportunity that China brings. Although
no detailed blueprint or project list has yet been made publically available, a major component
of the MSRI is the building of enormous amounts of hard infrastructure such as air and sea
ports, oil and natural gas pipelines and telecommunications networks. Moreover, the MSRI will
also entail the construction of large industrial parks and special economic zones (SEZs) coupled
with manufacturing plants within these areas (Blanchard and Flint 2017: 227).
For Saudi Arabia, its interests in the Maldives are not only geostrategic and economy, but also
religious. The fundamental economic interest of Saudi Arabia in the Maldives is to secure its
oil routes to China and to increase its geographical proximity to its regional rival, Iran
(Mathiesen and Darby 2017; Dorsey 2017). Moreover, Saudi Arabia has been funding religious
institutions in the Maldives and offering scholarships for students wanting to pursue religious
studies at ultra-conservative universities in the holy cities of Mecca and Medina (Dorsey 2017).
In this direction, the two countries have recently confined an agreement called the ‘religious
bridge’ to maintain ‘religious unity’ (Hassan 2015) that suits the radical Islamic allies of the
current regime. For different reasons and motives, both China and Saudi Arabia have become
key partners that allow the autocratic regime to enhance its position without receiving pressures
to change its political system (Doyle 2012; Hofman and Ho 2012). In this conjuncture, India
the traditional partner of the Maldives has become increasingly downplayed. While
concerns over the political situation in the Maldives have been voiced by India (albeit rather
inconsistently), its increasing links to China have until now prevented them from initiating an
open clash in the Maldives with the economic superpower. However, the increasing sphere of
influence of both China and Saudi Arabia in the Indian Ocean Region have created a power
shift that could affect international relations deeply in the years to come.
2.3.1 The Ibrahim Nasir International Airport
The development of India-Maldives relations soured in 2012 after the government abruptly
terminated an agreement that had been made under President Nasheed with the Indian
infrastructure giant GMR to develop the international airport. While the then opposition
branded the deal as an ‘economic crime’, in a move to delegitimise the democratically elected
government, allegations of corruption were ruled out by the Anti-Corruption Commission
(ACC) Graft Watchdog in 2013 (Junayd 2016). President Nasheed supported the GMR contract
arguing that his debt-ridden administration would have received US$2.9billion from GMR in
the 25-year concession period without having to spend state funds at all (Junayd 2016). The
termination of the contract was followed by the cancellation from New Delhi of $25 million in
foreign aid, but China was quick to announce that it would provide $3.2 million in free aid to
the Maldives (presumably in addition to its large aid package of $500 million that it had agreed
upon in 2012) (Copper 2016: 82-83). President Yameen then revealed a plan to finance the
project through US$800million of foreign loans and, in 2014, the government secured a
US$373 million concessionary loan from the Chinese EXIM Bank to upgrade and develop
the airport. The project of runway expansion was awarded to the Chinese Beijing Urban
Construction Group (Naish 2015; Agence France Presse 2016). In 2016, the Saudi Bin Laden
group was awarded a project to construct a new passenger terminal at the Ibrahim Nasir
International Airport at project cost of a US$500 million and without a proper bidding process.
The Bin Laden group, founded by the father of Osama Bin Laden, has been one of the major
actors in the global rush for farmland in both Africa and Asia and has been involved in major
human rights violations in both continents (Cooke 2016).
2.3.2 The China-Maldives Friendship Bridge and Increased Aid
During the same trip in which the Maldives partnership to the silk route was signed, China
agreed to help finance the ‘China-Maldives friendship bridge’ which connects Malé to the
international airport in Hulhumalé. The project is reportedly financed by US$126 million in
grant aid and a concessionary loan from China together with US$12.6 million from the
Maldivian state budget (Naish 2016). The project was awarded to the Chinese contractor,
CCCC Second Harbour Engineering company. This contractor had been blacklisted by the
World Bank and the Asian Development Bank over fraudulent practices (Fathih 2015).
Moreover, the contractor agreement has not been made public raising question over the
financial and legal obligations that the government may have incurred in. In 2016, the Chinese
Government gave the Ministry of Housing and Infrastructure MVR 7 million worth of free aid
for the beautification of Malé. The extent to which the populations were consulted on the city
reform plan that was concluded remains ambiguous (Shaahunaaz 2016). With regards to
imminent Chinese infrastructure investment, there are rumours that China may be under
negotiation with the government of the Maldives to build the Gadhoo port in the Southern Atolls
(Parasharl 2016; India Global 2017). The project, however, has not yet been confirmed and the
government remains silent on its future development. However, given the aims of the MSRI,
and the influence of China, its confirmation in the near future should come as no surprise.
2.4 Facilitating Land Grabbing and Corruption
With these double interests in mind: to attract FDI and to building partnerships that do not
hamper, but reinforce the current regime, the government has been actively creating regulations
to attract more FDI and to fit the need of its preferred investors.
2.4.1 Special Economic Zones
In 2014, the government of the Maldives introduced the Maldives Special Economic Zones
(SEZ) Act just a day after its vice-president flew to China to attract investors (Xinhua 2014).
The Maldivian SEZ Act creates special tariffs and jurisdiction for developers with incentives
that include wide-ranging exemptions from import duty, withholding taxes, and large
concessions in bringing in expatriate workers. Under the Act, the president and the
(undemocratically elected) board have enormous discretionary power as to how many SEZs to
grant, to whom, and the total land area that these shall cover. Under article 74 (a) of the SEZ
Act, the president may reclassify industrial, commercial, agricultural and residential land to one
classification and grant such reclassified land to the Zone. This huge discretionary power of
governments to reclassify land has been one of the major mechanisms through which land grabs
occurred worldwide. Moreover, the board can add a number of additional incentives such as
extended tax relief and extended land lease periods for foreign companies up to 99 years,
amongst others. As a means to centralize power, article 33 states that once an area is designated
an SEZ, local councils will no longer have authority over the area. With revenue bypassing any
type of local oversight and landing in the hands of the central government, not only is
decentralisation hugely challenged, but the SEZ bill effectively serves to further centralise an
autocratic government (The Maldivian Economist 2014). The International Monetary Fund has
warned that the Maldives Special Economic Zones Act 2014 (SEZ) sets unlimited discretionary
space for tax incentivizing of investment, which carries significant risks to the current simple,
effective and efficient tax system (IMF 2016: 40).
Despite their theoretical potential to stimulate growth, SEZ have extremely different impacts
on host countries depending on the institutional context in place (Moberg 2015). When the
context is that of autocratic regimes with corrupted institutions, Special Economic Zones have
been some of the key mechanisms for investors incur in land grabs. In the Maldives, with the
current regime, fears have mounted that these SEZ will result in economic slavery. In the
context of high inequality, high corruption and incompetent courts, the SEZ bill may very well
hand over ownership of this country’s resources to a handful of corporations. The excessive
power placed in the hands of an undemocratically elected board will inevitably lead to higher
rates of corruption resulting in the control of connected elites over SEZs that will squeeze out
possibilities for future entrepreneurs (The Maldivian Economist 2014; Mushfique 2014). The Ihavandhippolhu Integrated Development Project (iHavan)
The iHavan project has been the first to be conceded through a Special Economic Zone. As
stated in the official project website: ‘The project seeks to capitalize on the location of the atoll,
straddling the seven and eight degree channels through which the main East -West shipping
route, connecting South-East Asia and China to the Mid-east and Europe, presently runs’
(Invest Maldives 2017). The iHavan project comprises of the development of harbours and
ports, the production, processing and storage of cargo, an international cruise facility, airport
and real estate (Shaahunaaz 2017). Saudi investors had expressed interest in the venture during
Yameen’s state visit to the kingdom and Home Minister Umar Naseer stated that he was certain
that Saudi Arabia would fund the project by underlining that: ‘This is not just a transhipment
port, it also includes oil refinery and storage facilities. That is why Saudi Arabia is interested’
(Rasheed 2015). Opportunities listed on the website of the project include investments in
agribusiness, construction and infrastructure, energy, financial services and tourism (Invest
Maldives). Despite huge financial incentives
, to date, no investments have been made
publically available.
Incentives for investors include: a) The opportunity to acquire long leases on state-owned islands and land ear-
marked for tourism development; b) No limits on repatriation of profits; c) Opportunity to get duty exemption on
capital goods brought in to develop facilities (see Invest Maldives)
2.4.2 Foreign Land Ownership Reform
In the Maldives, all land has traditionally been public land and all Maldivian citizens have the
birth right to receive a plot of land. The 2000 islands can be classified in three types: inhabited,
uninhabited and resort islands. Those inhabited by local populations represent 188, while close
to 100 islands have been developed as tourist resorts (UNDP 2014). The great remaining
number of uninhabited islands has allowed the government to generate capital accumulation
without having to necessarily resort to physical dispossession. However, the 2008 Constitution
in its article 251 (a) notes that: ‘No foreign party shall own or be given ownership of any part
of the territory of the Maldives’, while allowing lease to foreigners for up to 99 years. In terms
of decision-making, the Decentralization Act of 2010 identified land management as a core
responsibility of local councils. This collides with the Land Act of 2002, however, that indicates
that it is the Ministry of Housing and Infrastructure who should manage land distribution
(UNDP 2014). In 2015, signalling a breaking point with previous regulations, President
Yameen introduced the Foreign Land Ownership Reform. This allows for absolute foreign
ownership of land in the Maldives. The conditions to buy land in the Maldives require interested
parties to make an investment of at least 1 billion USD and to reclaim 70% of the land from the
sea. One of the concrete drivers behind the rushed reform was to serve the desires of Saudi
Arabia who wished to buy, not lease, the Faafu Atoll for the development of a Special Economic
Zone (Shaany 2017; Mukharji 2017). In the midst of enormous opposition backlash, the projects
future still remains undecided. However, the legal apparatus to sell atolls to foreigners remains
in place and the conditions set out in the reform suit both China and Saudi Arabia perfectly.
The Maldivian Democratic Party expressed serious concerns about the reform claiming that the
amendment would allow ‘unprecedented access to foreign parties to operate in the Maldives’
(Reuters 2015) and India is worried that the reform will ultimately turn the Maldives into a
Chinese colony (Kumar 2015).
2.4.3 No Bid Contracts and Defamation Laws
Another instrument which was introduced in 2015, and that will serve enormously to facilitate
land grabbing, are changes made to the public finance regulations which now authorise the
cabinet to award projects carried out with concessional loans or assistance from a foreign
country without a bidding process or approval by the tender evaluation board. The new
regulation also allows the cabinet to award projects to private and state-owned companies,
bypassing the previously mandatory bidding and evaluation processes (Naish 2015). This has
already facilitated, for example, the granting of the airport terminal contract to the Saudi Bin
Laden group without any type of oversight. In 2016, the Anti-Corruption Commission (ACC)
Graft Watchdog stated that this regulation leads to ‘extreme increases in the price of goods and
services sought by the state, loss of transparency, loss of competitiveness, and paves the way
for corruption.’ In addition, ‘the regulation does not oblige (the cabinet) to set up a mechanism
to evaluate proposals professionally and financially’ (Naish 2016). Moreover, in 2016, the
government passed the Defamation and Freedom of Speech Act defamation bill which legalises
the incarceration of journalists and allows the imposition of severe penalties on those seeking
to exercise freedom of speech. The law criminalises defamatory speech, remarks, writings and
actions that include gestures deemed to be against ‘any tenet of Islam’ (Rasheed 2016). By the
stroke of a pen, corruption has become legalised and so has the imprisonment of anyone that
stands against it.
2.4.4 Free Trade Agreement with China
The Maritime Silk Road Initiative (MSRI) not only consists on ‘hard’ infrastructure projects
such as the friendship bridge and the airport, but crucially on ‘soft’ infrastructure too. For the
MSRI to achieve its full potential, MSRI partner countries will need to conclude and build upon
existing free trade agreements in order to remove barriers to the exchange of goods, negotiate
aid accords for projects, and conclude bilateral investment treaties (Blanchard and Flint 2017:
227). The importance of dismantling trade barriers in the OBOR region has been well ceased
by China who has developed numerous trade agreements already (Cyrill 2017). The recent
announcement of the free trade agreement (FTA) between China and the Maldives in December
of 2017 is another sign of China’s success in its expansion in the region. Despite the reported
numerous grounds of negotiation, the agreement was ultimately passed against Parliamentary
procedures and norms: the agreement of over 1000 pages was signed in less than 10 minutes,
passing with only 30 votes (Chaudhury 2017). The Maldivian Democratic Party (MDP) stated
that they were ‘deeply concerned over the sudden and rushed Free Trade Agreement (FTA)
with China, without any disclosure of details to the public or to the MPs’ (The Wire Staff 2017).
While the Government insists that ‘the agreement (…) meets the all-round, high-level, mutually
beneficial and win-win negotiation goal’, the Maldives-China trade statistics show that benefits
have largely been accruing to China because the balance of trade is hugely in its favour
(Shaahunaaz 2017). The general impact of trade agreements depends on whether the economy
is a commodity exporter or a commodity importer. The Maldives currently has a negative trade
balance of $1.99B and 90% of exports are fish (OEC 2017). The trade imbalances that Maldives
has with regards to China are particularly worrying because the country exports basic
commodities to China, but imports value-added products (Wang and Zadek 2016). In its article
20 on accumulation, the FTA states that ‘where originating goods or materials of a Party are
incorporated in to a good of the other Party, the goods or materials so incorporated shall be
regarded to be originating in the latter Party’. Given that the Maldives exports basic, and not
processed commodities, this will certainly be at the benefit of China. Moreover, given that
processing industries may develop in SEZ zones with the tax and foreign ownership incentives
stated above, the real growth that processing will bring to the Maldives, will still accrue to
Moreover, and as is the case, when the investments are land based, China can con control major
aspects of the host countries economy leading to monopoly power (Wang and Zadek 2016).
The schedule on specific commitments of the FTA China states that ‘the land in China is state-
owned and that the use of land has limitations (50 years for industrial purposes), 40 years for
commercial, tourist and recreational purposes’. On the contrary, the Maldives states that the
Foreign Ownership of Land is possible with the specifications of the reform. Annex 7 on
expropriation, makes outright seizure of land possible, if the land rights in the country were to
be modified. Additionally, in its annex 4 (article 7) which deals with market access for natural
persons, the FTA stipulates that ‘…no Party shall a) require labour certification tests; impose
quantitative restrictions; or c) require economic needs tests.’ (FTA China-Maldives 2017).
Given the high mobility of low-skilled Chinese workers, and that no labour quotas are set, this
will entail further competition in the labour market.
3 Current and Potential Impacts and Risks
Contemporary investment involves narratives that combine the economic opportunity’ of a
particular land-based project with the ‘social benefits’ that such projects will supposedly deliver
(Le Billon and Sommerville 2016). Whichever the context in which these unfold, there are
always inevitably winners and losers in these investments and agreements. Given the
interconnectedness between multiple actors operating at different geographical scales, it is
important not only to understand the diverging international and national drivers, but also the
impacts that these have and can potentially have at multiple scales and the ways in which
these impacts can reinforce each other. This section analyses some of the present impacts and
potential future implications that the current political and investment climate has enforced on
the Maldives.
3.1 Debt as a Disciplining Regime: The Denationalization of National Territory
The proclaimed double objective of ‘maintaining sovereignty and increasing growth’ are
extremely contradictory under current conditions. The land grabs that President Yameen’s
economic and foreign policy have been paving the road for are a particularly strong illustration
of the global inserting itself into the local which reveals significant contradictions. Through the
regulations enacted through the SEZ act, the foreign ownership of land reform, and the
signature of unbalanced trade agreements together with the suppression of transparency and
civil liberties the Government is acting as a facilitator of land grabs. On one hand, this can be
seen as an assertion of national sovereignty, while at the very same time it represents a ceding
of territorial sovereignty to its debtors. This ‘denationalization of national territory’ (cf. Sassen
2013) through the use of both economic and extra-economic means of coercion, materialise
under processes of both ‘soft’ and ‘hard’ that retro aliment one another.
President Yameen has accumulated an unprecedented level of debt, taking high risk loans to
accomplish infrastructure projects that are both unlikely to serve the needs of the local
populations whilst putting the country in a situation of deep disciplining by its creditors. While
the proclaimed aims of diversifying the economy away from tourism might sound attractive,
the huge and mostly unnecessary infrastructure investments targeted at this aim can have deep
economic and political impacts both domestically and beyond. Otherwise known as
infrastructoromics (Grandia 2013), the assumption that investment in infrastructure will
ineluctably produce economic growth, is a simplistic and biased account of growth that fails to
introduce questions of redistribution of both political and economic power between the actors
engaged. Although infrastructure development has indeed the potential to foster growth, studies
have shown the poor results that such investments can have over both the short and long term
mostly due to overrun and corruption. In other words, experience from low income countries
with weak governance mechanisms shows that many infrastructure projects have turned out to
be white elephants (Arezki et al 2017). The intrinsic governance and corruption problems in
the Maldives together with an astounding lack of transparency in the process of project
allocation, makes infrastructure investment with grants and loans particularly sensitive to
corruption. In a 2016 report the International Monetary Fund (IMF) highlighted that public debt
as a share of Gross Domestic Product (GDP) had risen almost by 11.5 percent from 2014 to
2016 (IMF). As a consequence of this unsustainable trend, the Maldives has been downgraded
to a fragile state in 2017.
Sources: Maldivian Authorities and IMF estimates (IMF 2015: 2)
3.2 From Soft to Hard Power
Although FDI and trade are, and will remain, vital for the socio-economic development of the
Maldives, the type of regime in place and the interests of the main investors matter deeply to
determine their outcomes. Interdependence does not mean harmony. As Nye (1990) puts it:
‘just as the less enamoured of two lovers may manipulate the other, the less vulnerable of two
states may use subtle threats to their relationship as a source of power.’ Given that more than
70% of Maldivian current debt is now owed exclusively to China, there is a justified reason to
believe that this will give the economic giant and unprecedented amount of economic and
political power over the archipelago, that will benefit the latter. Moreover, studies on
asymmetrical and excessive dependence, that the current FTA increases, show that rather than
fostering peace between parties, these arrangements can lead to tensions that may develop
conflictual interactions (Barbieri 1996). In fact, the power gained through excessive
dependence and unbalanced relationships can be used to gain concessions in both the political
and economic domains.
From a peace and security perspective, there is a considerable amount of scepticism about the
intentions of China and Saudi Arabia in the Indian Ocean. According to observers, China sees
the islands as a node in its ‘string of pearls’ (Booz Hamilton 2004) a line of ports situated on
key trade and oil routes that could be turned into military bases. The idea that the ultimate
motive of these investments may be military is reinforced by the fact that this would
complement both Saudi and Chinese development of military outposts in Djibouti an East
African nation on a key energy export route (Dorsey 2017). Although, China has repeatedly
insisted that its investments in infrastructure are only economically motivated and President
Yameen has claimed that he will keep the Maldives a demilitarized zone, the economic
dependency that the Maldives has with regards to China will give the political decision power
to them. For now, China’s use of aid and investment funds for infrastructure in South Asian
countries has served the purpose of expanding China’s oil and natural resource lifelines to the
Middle East and Africa (Copper 2016: 90). While it remains to be confirmed, in the future it
can certainly open up the possibility for the development of military bases as it already has
done in the South Asia Sea. However, excessive economic dependence means that countries
have little leverage to contend this trend.
3.3 Increased Radicalisation
In the realm of extremist Islam, the Saudis have been described as both ‘the arsonists and the
firefighters’. On one hand, they promote a very toxic form of Islam that provides ideological
fodder for extremism. On the other, they are partners in counterterrorism efforts (Shane 2016).
Although religion is an important part of the lives of many Maldivians, the Islam they
traditionally practice has not traditionally been conservative Salafism. In the last two decades,
however, Maldivian clerics and students have returned after studying in universities in Saudi
Arabia, Egypt, and Pakistan, with hard-line Wahhabi and Salafi beliefs. These ties have
progressively injected religious conservatism into a society that was once religiously moderate
(Ramachandram 2016). In recent years, the radical spin has materialised: the Maldives has now
acquired the highest per capita rate of ISIS fighters in the world (approximately 200). Not only
does the Maldives have the world’s largest number of jihadists per capita active in Iraq and
Syria, but it also accounts for the biggest number of jihadists from any South Asian country
fighting in these countries (Ramachandram 2016).
Backed by Islamic radicals and with the current imprint of Saudi investment in the archipelago,
President Yameen has justified his authoritarian actions through a wilful misinterpretation of
Islam. Basic freedoms of the Maldivian populations have been systematically cut in the name
of radical Islam. In a worrying turn of events, the Maldives announced in 2014 that executions
would resume after more than 60 years without the death penalty having been implemented,
including for minors (Amnesty International 2017). The links between extremism and land
grabs can be bidirectional. On one hand, increased Saudi investment in the archipelago can
facilitate the spread of radical Islam. On the other, as land grabbing excludes local populations
from the development opportunities that the elites reap, the sense of injustice could make them
increasingly easy targets of extremist ideology. If a terrorist attack were to occur on any of the
luxury resort islands visited by millions of international tourists annually, this would not only
be devastating for the victims, but could equally very well mean the end of tourism all together,
with the daunting economic perspectives that could follow. The US has recently issued a travel
advisory over potential terrorist attacks in the Maldives stating that: Terrorist groups may
conduct attacks with little or no warning, targeting tourist locations, transportation hubs,
markets/shopping malls, and local government facilities. Attacks may occur on remote islands
which could lengthen the response time of authorities’ (US Travel State Gov. 2018).
3.4 Authoritarianism, Corruption, and Isolation
The flows of huge shares of investment coming from partners that either ignore or undermine
the human rights situation of a country suffering from daunting social injustice serves to solidify
the position of the perpetrators. President Yameen seems to have understood this dynamic well
and has been selling territory as a means to consolidate his own power. In 2016, it was revealed
that at least US$80 million were stolen by the government-owned tourism promotion company
MMPRC (Naish 2016). The Aljazeera investigation on ‘stealing paradise’ powerfully
documented the mechanisms by which such huge corruption is unfolding (see Jordan 2016).
Given that the biggest threat to authoritarian leadership tends to come not from popular uprising
or democratic transition, but rather from regime insiders or elites (Svolik 2009), FDI offers
more patronage resources to buy the political support of potential elite dissidents. Moreover,
authoritarian leaders can alleviate the long-term commitment problem of elites by using the
much longer time frames that FDI and joint partnerships provide over other economic
incentives. In this way, FDI can strengthen the mutually self-enforcing relationship between
the dictator and the elites (Daehee and Chungshik 2016: 1999). Although foreign investors
certainly have a role to play, the real land grabbers in this situation are profit-seeking local elites
rather than foreigners.
Daunting evidence of money laundering, persecution of dissidents, gross human rights abuses,
and of the crippling of independent institutions by the Commonwealth Human Rights Initiative
(CHRI 2016), led to the withdrawal of the Maldives from the Commonwealth in 2016. The
government, using anti-western discourse, stated that it was being targeted in the name of
democracy promotion, to increase its own relevance and leverage in international politics’ and
that it had been treated ‘unjustly and unfairly’ amid human rights scrutiny and money
laundering rumours (Safi 2016; Najar 2016). Now that aid and investment are provided through
partners that do not interfere in domestic political affairs, the withdrawal from the
Commonwealth ultimately allows the current regime to pursue with impunity the suppression
of basic civil liberties that has characterised the mandate.
3.5 Expulsion, Exclusion, or Adverse Incorporation?
The most iconic scenario of expulsion (Sassen 2014) tends to happen when ‘the land is needed
but the labour is not’ (Li 2011). The great number of uninhabited islands has allowed the
government to generate capital accumulation without necessarily having to recur to physical
dispossession. However, a different tactic has been used to spare land that does not necessarily
require Maldivian labour. Under the argument that providing services and opportunities to
every inhabited island is impossible, the government of the Maldives has long argued that
people should relocate to Malé, and later to Vilingili and to the artificial island of Hulhumalé.
Although for a country such as the Maldives which is hugely dispersed, this might seem like a
logical political strategy, the Maldivians have been paying a high price for policies that have
forced populations to a capital which has the highest population density in the world and is
amongst the most congested places on earth (Fikry 2016). Forced relocation was suspended by
President Nasheed (The President’s Office 2011), but it has been coming back in full force at
an even more alarming pace than before. Despite the extremely poor social and environmental
conditions in the capital, the government is still legitimising the pursuit of relocation into
congested areas. In a context of growing investment with the potential sale of whole atolls, it is
not just the availability of infrastructure that explains these forced relocations, but rather the
need to spare land for profitable ventures.
Employment creation is often presented as the main benefit by governments, investors, and
local populations themselves. However, de facto employment creation tends to be scarce,
seasonal, or unreliable (Cotula 2014). Evidence shows that, on average, the Maldivian labour
market creates one national job for every three created for foreigners (Salvini et al. 2016: 46).
Today, nearly half of those employed are foreigners and they play a dominant role in both low
skilled and high skilled occupations. As a result, the labour market for local populations has
been increasingly characterized by unemployment and discouragement (see ILO 2013). The
lack of skills of local populations due to poor education services is not enough to explain the
lack of local employment opportunities. In low-level occupations, Maldivians have to compete
against an extensive supply of foreign labour force (mainly from Bangladesh, India, Sri Lanka
and the Philippines) that is willing to accept very low salaries and exploitative labour
conditions. Having themselves suffered the expulsion from their countries by a combination of
low level of employment opportunities, land grabs, and natural disasters, this ‘army of surplus
migrant labour’ that these sending countries have created, constitutes a malleable and flexible
workforce that investors prefer to engage (Salvini et al. 2016). In fact, the social isolation and
dependence of migrants makes them easier to discipline (Li 2009: 631). The construction of the
‘China-Maldives friendship Brige’ is already exemplifying the trends of Chinese FDI and
labour export of China’s silent army (Cardenal and Araújo 2013). A large part of the seafront
in Malé has now been cordoned off for construction, with mostly Chinese workers within its
The Employment Act introduced in 2008 and the incorporation of the Maldives to the
International Labour Organisation in 2009 constituted vital steps forward towards the protection
of Maldivian workers. However, the current regime has dismantled earlier social victories. For
example, despite recurrent claims throughout the SEZ bill of employment creation, the
specificities of the nationals who may profit from this employment remain extremely vague.
The Act only put a limit of 10% in the amount of foreign employment that can be given in
technical and advisory roles, but the board withholds complete discretion to increase this
threshold if needed. Moreover, and importantly, no type of quota on low-skilled foreign labour
is included in the bill. Given this huge discretion for foreign investors to import labour, most
of the SEZ jobs are likely to land in the hands of foreign malleable workforce. Moreover, and
given that the outcomes of inclusion for local populations are highly dependent on their terms
of incorporation (McCarthy 2010), the best employment opportunities are likely to acrue, once
again, to those that are politically well-connected. Additionally, although trade unions and
strikes were formalised under the Employment Act of 2008, the continued incarceration of
citizens, the violation of free speech as well as the regulation on defamation passed in 2016,
compromise these basic rights at the most fundamental level. Together, these developments
deeply compromise the ability of local populations to negotiate their terms of inclusion into the
economic opportunities that investment may bring.
Even if migration transition models (Zelinsky 1971), largely based on modernization theory
(Rostow 1960), hypothesized that ‘early transitional societies’ – such as the Maldives as they
modernize will see mass movements of rural exodus as people move out of agriculture into
industries and service sectors, they are too simplistic in assuming that all societies will follow
the same path towards development than western societies have seen. In the Maldives, the large
internal movements have coincided with both a lack of growth in the main employment sector
for the locals (fisheries) and a lack of dignified employment opportunities in the service and
industrial sectors. As in many other countries where land grabbing is taking placed, the local
populations become ‘surplus’ to the requirement of capital accumulation (Li 2010) ultimately
becoming inhabitants of the Planet of Slums that Mike Davis (2010) vividly described. Ma
perfectly fits the dire analysis.
3.6 Environmental and Climate Impacts
Huge infrastructure projects conducted without transparent oversight and checks are likely to
add to the environmental pressures that the Maldives is already experiencing. With the potential
to cause damage to reefs and ecological systems, an unchecked development of the
infrastructure sector will be complicit to the effects of climate change and other natural disasters
to which the small island states is one of its most important victims. The land reclamation that
the Foreign Land Ownership Reform incentivises has devastating environmental impacts on
both marine ecosystems and the land that lies near them. Moreover, with the power of
Environmental Impact Assessments now in the hands of the Ministries instead of in the hands
of environmental experts, the government can accept to proceed with projects that could make
the Maldives inhabitable in the years to come (Darby 2017). In the immediate term, the effects
of these projects on the fishing sector will further impoverish the main employment sector of
the Maldivians, leaving them with increasingly less possibilities to either feed themselves or
export their produce. Moreover, with an ‘economic capture’ first policy, President Yameen has
abandoned the carbon neutral pledge and also plans to drill for oil (Maldives Independent 2018).
What was once a nation that provided climate leadership, is quickly turning into one of
environmental criminality (Lynas 2015). In a context of shrinking possibilities compounded by
the impacts of climate change and sea level rise, land grabbing refugees are likely to join the
ranks of climate, economic and political refugees in the years to come.
4 Conclusions and Policy Recommendations
Though contemporary land grabbing, is often implemented under the banner of ‘sustainable
development’, what we are in reality experiencing an ongoing process of ‘accumulation by
dispossession’ (Harvey 2004), and ‘accumulation by displacement’ (Araghi 2009) where the
benefits of investment projects tend to accrue to local elites and stakeholders that are best able
to manage their terms of incorporation (Vigil 2018). The combination of transnational
investment driven by geopolitical, economic, and ideological imperatives together with the re-
imposition of authoritarianism in the Maldives, has made the archipelago extremely vulnerable
to the global phenomenon of land grabbing. In the absence of functioning democratic
institutions, the government has had free leeway to change the legislation and to impose
hierarchical authority over political and economic activities in order to reinforce its own power.
Having now fully legalised corruption on the one hand, and the imprisonment of anyone that
stands against it on the other, the autocratic government has acquired more discretion than ever
to dispose of the territory of the Maldivian people for its own self-interested goals. Through the
deployment of anti-western discourses that conflate the historical responsibility of colonialism,
with the ideals of freedom, democracy and human rights, the regime has been aggressively
seeking investment from countries that do not impose political conditionality. This has suited
the geostrategic interests of both China and Saudi Arabia in the Indian Ocean perfectly, while
side-lining India from its influence over the strategic region.
Although FDI and trade will remain essential mechanisms for the socio-economic development
of the Maldives, the interests of the investors as well as those of the regime need to be carefully
balanced. On one hand, China’s economic intrusion in the Maldives stems both from its wishes
to isolate its rival in the region while securing its security interests in the region. If the string of
pearls theory were to materialise, these huge infrastructure investments could have enormous
impacts for the geopolitical balance of the region, and beyond. This is not only worrying for
India, but equally to the US that wishes to contain the influence of China in this strategic region.
Moreover, the redistributive difference between these two countries will be present in trade
agreements as long as the country differs from its trading partners in factor endowments
(Thrasher et al. 2015). In countries with authoritarian regimes such as the Maldives, the
distribution of capital stock is distorted because a small group of rich people own a
disproportionately large share of capital. On the other hand, the alarming spread of radical Islam
under the support of Saudi Arabia should be of on both on the domestic, regional and
international security agendas. With terrorist attacks becoming increasingly plausible, and with
the death penalty institutionalized, the Maldives will likely be seeing increased loss of human
life to terror.
Domestically, the flows from these countries into the hands of a corrupted and patrimonial
regime, could be helping to strengthen the power of the regime and further hampering the
possibility of civic rights and social justice to finally drive the destiny of the nation with
potential contradictory outcomes in terms of future investment. On the one hand, the gross
human and environmental rights violations committed under the current regime have led to
international isolation, closing the doors to more socially just and responsible investments that
the archipelago urgently needs. On the other hand, and given that the entrance of foreign
investors is hugely facilitated by the burden of the debt, the astounding amounts of debt that
the current regime has signed on will further carve out the path for its creditors to take hold of
the territory. Despite the thirst of developing countries to attract FDI, the evidence worldwide
of the positive impacts of FDI on growth is, however, mixed at best. This is specially the case
when ownership is not shared, and when the country does not have human capital capable of
absorbing new technology or of being fully included in the investments (Thrasher et al. 2015).
As a small island state, the Maldives is at the merci of international trade and investment. This
does not have to be negative per se, but agreements that benefit the Maldivian people (and not
the political and corporate elites) need to be prioritised. This is very difficult given the current
political situation which turns FDI into land grabs in a quasi-automatic manner. In the case of
the Maldives, the local populations have been either excluded or adversely incorporated into
investments that favour a malleable migrant workforce. The spill-over effects materialise in
terms of inequality and potentially xenophobic feelings towards a vulnerable workforce that
has itself been expelled by similar mechanisms in their own countries.
Policy Recommendations
In light of the evidence presented in this report, and in order to avoid further land grabbing and
its human rights impacts, the government should take immediate action to: 1) Cancel the foreign
land ownership reform and revise the sustainability of long term leases; 2) Ensure the
decentralization of decisions over national territory and the participation of affected users; 3)
Cancel contracts to companies with records of corruption and human right abuses; 4) Reinstitute
transparent bidding contracts; 5) Cancel the defamation and freedom of speech act ; 6) Insure
that Social and Environmental Impact Assessments are independently conducted and
implemented; 7) Diversify the sources of investments and revise the SEZ Act and the FTA with
China; 8) Instore employment quotas in order to benefit nationals and invest in sectors that
enhance the skills of the Maldivian people.
In 2016, the International Criminal Court (ICC) widened its remit to include cases of land
grabbing by stating that: ‘The Office (of the Prosecutor) will seek to cooperate and provide
assistance to States, upon request, with respect to conduct which constitutes a serious crime
under national law, such as the illegal exploitation of natural resources, arms trafficking,
human trafficking, terrorism, financial crimes, land grabbing or the destruction of the
environment’ (Article 7). The impacts of crimes will ‘be assessed in light of, inter alia, the
increased vulnerability of victims, the terror subsequently instilled, or the social, economic,
or environmental damage inflicted on the affected communities. In this context, the office
will give particular consideration to prosecuting Rome statute crimes that are committed by
means of, or that result in, inter alia, the destruction of the environment, the illegal
exploitation of natural resources or the illegal dispossession of land.’ (Article 15). The
Maldives is a signatory of the Rome statute and the ICC could consider evidence to
prosecute officials and corporations that are incurring in these crimes.
Source ICC 2015
At the international level, there have been attempts to control the negative impacts and
processes of land grabbing through the development of codes of conduct and principles for
responsible investment that respect rights, livelihoods and resources.
Transparency in
negotiations, respect for existing land rights, sharing of benefits, environmental sustainability,
and adherence to national trade policies are the most frequently addressed challenges in order
to attain ‘win-win’ outcomes. However, these principles of good governance together with
those of Corporate Social Responsibility (CSR) are still too vague in a context where
governments and elites of developing nations often take the side of investors for purposes of
personal enrichment. Moreover, the key question is not solely to regulate investment for
equitable sharing, but rather how to best to use the land that is really idle or underutilized. A
fine assessment of impacts should not only involve the number of jobs created or benefit
sharing, but also an assessment of poverty reduction through alternative land uses (De Schutter
2009). The most adequate instrument of protection to have emerged to date are the Voluntary
Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests (CFS and
FAO 2012). While the principles that the document contain are useful in a context of
functioning institutions and human rights protections, all of these voluntary and non-binding
instruments remain of scarce practical use in authoritarian contexts. The urgent necessity for
the international community is to ensure that the decisive Presidential elections which will take
place in the Maldives in 2018, are free and fair. Only with the functioning of strong democratic
institutions will the huge threats of land grabbing diminish.
FAO, IFAD, UNCTAD and the World Bank developed a set of principles for responsible agricultural investment
(PRAI). The United Nations Economic Commission for Africa, the African Union, the African Development Bank
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Technical Report
Full-text available
The past decade has witnessed remarkable growth in Chinese outward investments, and there is a growing number of academic studies, policy papers and media reports discussing the operations and impacts of Chinese companies overseas. This literature review aims to develop a comprehensive understanding of the sustainable impact of Chinese outward investments. The specific objectives of this literature review are: 1.-Providing a balanced view of the current state of knowledge of the sustainable development impact of Chinese ODI. 2.-Providing an overview of the diverse perspectives and concerns relevant to Chinese policy-makers and companies “going out.” 3.-Providing insights into the Chinese policy and business strategy measures that would improve outcomes and address concerns. 4.-Providing direction on further avenues for research and possible future collaboration. In this review exercise, 384 papers were collected, including 262 in English, 83 in Chinese and 39 in Spanish, based on an inventory of the available research drawing on academic databases, think tanks and international organizations, and a search of non-governmental organizations’ reports, private sector reports and newspaper articles.
China's Soft Power Diplomacy: Myth or Reality? examines the Chinese version of soft power both in conceptual and operational terms, and explores its myriad implications for India, in particular, and South Asia in general. The book investigates how the institutionalization of cultural soft power would help China project its image as a benign and responsible stakeholder in order to reshape the current international system with its notion of “harmonious world order,” based on Chinese characteristics. This book traces the origin of China’s engagement with South Asian states from historical, political, economic, and security perspectives in order to better understand the dynamics of its South Asia policy. It illuminates the core reasons to explain why China’s soft power initiatives in South Asia are least appealing and convincing to India while they are welcomed by smaller nations of the region. More pertinently, the book addresses complexities and nuances of China’s soft power instruments given the psycho-cultural and geopsychological peculiarities of the South Asian region. For this, it focuses on how the Sino-Pakistan axis constitutes a potential challenge to India’s leadership role and influence in South Asia.
This paper aims to broaden the scope of analysis of the contemporary global land rush by examining crop booms not only outside, but inside China; and investment flows not only from China, but also within and into China. It does so by examining the eucalyptus and sugarcane sectors in southern China, which have witnessed investment booms during the past decade, with capital being infused by both domestic capital and foreign capital, including Finnish, Indonesian, and Thai companies. Our argument addresses three key issues: (a) explaining why foreign and domestic companies enter into a multitude of lease and grower contracts involving holders of micro-plots, (b) revisiting the notion of extra-economic coercion, and (c) a critique of thinking about flows of large-scale investments centred primarily on nationality. These issues are central in current debates in the land grabs literature, and our study offers a different perspective from dominant narratives.
This paper proposes an institutional solution that can help unlock the flow of low yielding long-term savings towards high-return infrastructure investments. The solution is to transform public-private partnerships (PPPs) in infrastructure as well as the classic model of multilateral development banks. Instead of thinking of PPPs as bilateral contracts between a private concession operator and a government agency, we argue that they should be conceived as partnerships that also involve a development bank and long-term institutional investors as partners. We propose a new model for development banks, which is to transform them into originate-anddistribute banks for PPP infrastructure projects. The new model allows them to conserve their valuable capital and leverage their expertise and capabilities by making them available to long-term institutional investors.
The conversation first takes up the theme of David Harvey’s public lecture in Seoul, “Realization Crises and the Transformation of Everyday Life.” Harvey stresses that the relative neglect of Volume 2 of Marx’s Capital has prevented scholars and activists from paying due attention to the crucial importance of value realization for the reproduction of capital. The discussion then moves on to the city as both a site of production and of liberation struggles, a topic so far largely neglected in the Marxist tradition. Regarding the neoliberal phase of capitalism, Harvey calls it a “new imperialism” characterized by “accumulation by dispossession” as its guiding principle. Paik agrees to that distinguishing feature as compared with the immediately preceding phase where creation and appropriation of surplus value were more prominent, but suggests that “accumulation by dispossession” may have been an essential attribute of capitalism from the sixteenth century on. After ranging over a variety of topics, the conversation looks at the latest developments in the Chinese economy, how they may illustrate Harvey’s notion of capital’s “spatial fix,” and what other potentialities may yet be found in China’s diverse and complex reality.
China’s “One Belt, One Road” project is comprised of two components: the Maritime Silk Road Initiative (MSRI) and the Silk Road Economic Belt (SREB)—that were announced separately in 2013. Each component has the potential to transform the global geopolitical landscape through the construction of interrelated infrastructure projects including ports, highways, railways and pipelines. Such hard infrastructure requires the complementary construction of soft infrastructure, such as free trade and investment agreements, and other accords. We introduce a special section focusing specifically on the geopolitics of the MSRI that stems from a workshop hosted in November 2015 in Shanghai. The origins, scope and content of the MSRI are described, along with a summary of the current literature discussing the project, and dominant geopolitical representations. The MSRI is a geopolitical project that involves a number of actors (governments, private companies and Chinese state-owned enterprises) at a number of geographic scales (cities, provinces, states and continents). Arrghi’s twin logics of territorial and economic power help frame and connect the papers of the special section to illustrate the complexity and dynamism of the geopolitics of the MSRI. The articles provide insights into the geopolitics of a large connectivity project.