Muizzu Claims Coup Attempt by Bank
On Monday, President Muizzu claimed in a PNC speech that the Bank of Maldives (BML) attempted a coup. This accusation followed the central bank’s decision to suspend US dollar payments from Maldivian Rufiyaa (MVR) accounts, which was later reversed. Muizzu said that if one connects the dots, as Minister Shiyam pointed out, it is clear there was an attempted coup.
Early Fears of a Coup
Only 11 months into his presidency, Muizzu already fears a coup. Following the bank’s decision, he announced an investigation into the matter. According to reports, BML halted debit card transactions over the weekend and set a $100 monthly limit for credit card online spending.
Planned Protests and Online Criticism
Muizzu stated that protests were planned alongside the bank’s decision. However, the police reported no demonstrations, noting only harsh online criticism of the government. “Hundreds of ‘bot’ accounts have been used to encourage people to take to the streets to overthrow the government and incite public unrest,” they stated.
Bank’s Justification
The bank explained that the changes, now rescinded, were due to increased foreign currency usage on cards and limited foreign currency sales. The Maldives is facing a severe financial crisis, with usable dollar reserves depleted, marking the first time in the nation’s history that reserves have turned negative. This critical situation, forewarned by the Maldives Monetary Authority (MMA), has sparked nationwide concern.
Financial Decline and Its Causes
As of August 21, usable reserves had indeed gone negative, confirmed by multiple reliable sources. This depletion puts the nation at risk, affecting loan repayments, essential imports, and overseas expenses for Maldivian students. The decline in reserves results from several factors: the need to repay loans, increased oil expenditure, and other essential imports. The MMA had warned that without early additional revenue, managing the budget deficit would become difficult. Gross international reserves fell from USD 509 million in June to USD 395 million in July. Usable reserves dropped to just USD 43 million, insufficient for a month’s essential imports.
Muizzu’s Position and Action
President Muizzu stressed that the investigation into the bank’s decision would remain independent, with no government interference. He asserted, “I will not hesitate to carry out the verdict after an independent investigation. That is justice.”
Opposition’s Stance
The Maldivian Democratic Party (MDP) denied any involvement in the alleged coup. MDP Chairperson Fayyaz Ismail criticized the allegations, stating, “It is very lowly to claim that a coup is being attempted every time our Admiral Ameer gives a press conference.” He stressed that the MDP focuses on holding the government accountable, not on orchestrating coups.
Government’s Role in the Bank
Muizzu raised concerns about the composition of BML’s Board of Directors. While four board members represent the government, five have no government ties. Muizzu argued that this disproves claims that the bank’s decision was government-driven. He suggested some directors might still have loyalties to the previous administration.
Timing and Political Reactions
The timing of a press conference by former Finance Minister Ibrahim Ameer, coinciding with BML’s transaction limit announcement, fueled the controversy. Critics questioned whether this timing aimed to provoke political reactions. Fayyaz Ismail dismissed these claims, asserting that the MDP’s actions are lawful and within their rights as an opposition party.
The Road Ahead
Muizzu accused the opposition of attempting a coup, drawing parallels to recent events in neighboring countries. He pledged to use all constitutional powers to prevent any illegal government changes.
Meanwhile, Ismail suggested the situation might reflect internal government issues, with Muizzu possibly facing challenges to his leadership. “We’re witnessing President Muizzu lose his footing,” Ismail commented, hinting at internal political conflicts.
Geopolitical Tensions and Economic Fallout
Maldives’ economic troubles partly stem from its foreign policy choices. Traditionally, India has been a supportive neighbor, offering financial aid and security cooperation. However, recent moves to distance from India and lean towards China have strained relations. This shift has left Maldives vulnerable, especially given its reliance on high-interest Chinese loans, which have contributed to its financial crisis.
Also Read: Maldives Takes a U-Turn From “India Out” to “Welcome India”
The decision to antagonize India, despite geographic and historical ties, has not favored the Maldives. It highlights the importance of maintaining strong relationships with neighboring countries. This situation also serves as a warning to other nations like Bangladesh, which could face similar issues if they neglect long-standing partnerships for short-term gains. And as they say
Geography is destiny