Saudi Arabia opened an embassy in the Maldives for the first time on Sunday as agreed upon during President Abdulla Yameen’s state visit to the kingdom in March.
The embassy is located at the Hotel Jen in Malé and will issue visas for Maldivian students, pilgrims, and tourists.
In a meeting with a visiting Saudi Arabian delegation last week, President Abdulla Yameen had “noted the importance of establishing better transportation between the two countries,” the president’s office said.
President Yameen also told the delegation that the Maldives is “open for joint venture investments.”
Following the ratification of controversial amendments to the constitution last month that authorises foreigners to own freeholds with an investment of US$1 billion, Vice President Ahmed Adeeb told The Hindu newspaper that the government was seeing interest from Middle Eastern investors, “especially from royal families there.”
“Maldives can be like Bahrain is for them,” he suggested.
Adeeb said many companies that the government has sought to attract under its flagship special economic zones (SEZ) legislation had requested owning land in perpetuity.
“So far we have given leases for 99 years to them, for investments of around $200 million. But now we want to build big projects, like IT parks, like townships, so we need to give them more,” he said.
The government had maintained that the SEZ law was necessary to attract large-scale foreign investments and to launch ‘mega projects,’ which President Yameen has said would “transform” the economy through diversification and mitigate the reliance on the tourism industry.
The mega projects include the construction of a bridge connecting Malé to Hulhumalé and the development of a ‘Youth City’ in the reclaimed artificial island near the capital.
In June, a group of Saudi Arabian investors reportedly visited the northernmost atoll, Ihavandhippolhu, where the government is hoping to develop a transshipment port. The Saudi Arabian government has also provided US$1 million as grant aid to finance the feasibility project.
The Ihavandhippolhu Integrated Development Project (iHavan) also involves the development of an airport, offshore docking and bunkering facilities, an export processing zone, real estate businesses, and tourism facilities.
A joint communique issued during President Yameen’s state visit to Saudi Arabia in March stated that the two sides agreed to increase “their commercial exchange while expanding and enhancing investment between the two countries and extending invitations to their respective private sectors to explore the available investment opportunities in both countries.”
“The Saudi Fund for Development will continue to finance the development projects in the Republic of Maldives and will consider participating in the expansion of Malé airport and beach preservation in Hulhumalé,” it added.
The Saudi government subsequently provided a US$20 million grant for budget support in May.
The Maldives and Saudi Arabia also agreed to “continue fortifying their bilateral cooperation in all fields including foreign affairs, defence, Islamic affairs, judiciary, economy, commerce, investment, education, and health for the purpose of accomplishing their common interests and providing support to the issues of the Muslim nation, while rejecting any foreign interference in their internal affairs.”
Meanwhile, in his Republic Day address last year, President Yameen had criticised interference in domestic affairs by Western powers and declared that his administration was “looking east” to China as a development partner.
Chinese president Xi Jingping became the first Chinese president to visit the Maldives in September last year. During the visit, the Maldives agreed to become a partner in China’s maritime silk route, a trade route from China’s Fujian province to the Mediterranean Sea via South Asia and East Africa.
China’s growing presence in the Maldives has stoked concerns in New Delhi that the rival Asian power is creating a ‘string of pearls’ to encircle India. China established a full diplomatic mission to the Maldives and opened an embassy in Malé in November 2011.
Japan, historically the Maldives’ largest bilateral donor, reported plans to open an embassy in the Maldives this year.