Mahrukh Farooq

A New Type of Wealth The chance for wealthy foreigners to own land on one of the world’s biggest tourist attraction, Maldives, is proving to be both an opportunity as well as a cause for concern for many By Mahrukh Farooq Bored of your mansions and endless fleets of luxury cars? Looking to give your asset portfolio a makeover? Well, you just might be in luck; Maldives, one of the world’s most popular tourist spots with its pristine beaches and crystal clear waters, is offering wealthy foreigners the chance to purchase their very own land from its range of beautiful islands. In a landmark move, the Maldives’ government, headed by controversial president, Abdulla Yameen, approved a new law that allowed for the foreign ownership of land in the country for the very first time. According to certain clauses stated in the new legislation, which was passed with 70 members of assembly in favour and 14 members opposed, foreigners who invest more than $1 billion will be allowed to own land in perpetuity, provided 70% of it is reclaimed from the sea. For a start, the amendment stipulates that only 10% of the existing 298 sq. km (115 sq. miles) of the Maldives will be given to investors for them to claim ownership over. Its objective is to attract offshore investors into special economic zones introduced by the President of Maldives to diversify the economy away from the dominant tourism sector. In addition, it is also being viewed as an attempt to spur rapid development of reclaimed land brought about as a result of the new practice. All these instituted changes take things a step further from the current practice of the leasing of islands by the government to foreign companies for a maximum of 99 years, thus enabling them to freely operate their own luxury resorts amid picturesque locations. This law is but yet another significant contribution to the rising trend of private islands’ purchases across the globe by some of the world’s top billionaires. For many of these people, buying an island is about more than just the cost. According to Chris Krolow, chief executive of Private Islands, which operates online island sales sites, it is all about having a stake in something big. “They want to be [the] steward of their own little piece of the world,” Mr. Krolow explained. “They become so emotionally attached to the idea of owning an island. It’s not simply a luxury purchase. It’s a very passionate one.” And while some buyers are seen picking up prestige properties for sentimental reasons, others choose to capitalize on the business side of the investment by renting them out when they are not in residence. Celebrities such as Hollywood actor Steve Martin and famed magician David Copperfield regularly rent out their villas and islands for rates ranging from $28,000 to $40,000 a night. Whatever the reason may be, it is however clear that this decision has caused shockwaves throughout the Indian Ocean region as many government insiders and analysts are viewing this move as an attempt to further sharpen regional competition for influence over one of the busiest oceans in the world. Some of them have gone to the extent of pointing out that there is, in fact, only one country in the region which may be interested in initiating such large investments in Maldives; China. In recent months, the potential superpower has been making significant inroads into the Indian Ocean via submarine visits to ports in the neighborhood, as well as strategic investments under the maritime Silk Road project, an agreement Maldives had signed on last December. This is raising quite a bit of concern in Delhi, which considers China’s rising interests as a threat against its drive for influence in the area. China has been one of the leaders in land reclamation technology, as witnessed by its fast and aggressive island-making in South China Sea. It has built the largest dredger in Asia, which has, as per Chinese estimates, blasted 10 million cubic metre of sand and seawater onto reefs in the disputed region, which is equivalent to three times the volume of concrete used to build Hoover dam. Therefore, any Chinese presence that will allow for logistical and even military facilities in Maldives is currently being viewed as a serious security concern by the Indian establishment. "Recent bilateral visits and diplomatic interactions clearly suggests this is sweetener for China," says Eva Abdulla, a legislator for the Maldivian Democratic Party who voted against the legislation. "Maldives is not in the South China Sea. This situation paves the way for greater Chinese involvement in Indian Ocean affairs. We are now witnessing robust Chinese presence in the Indian Ocean and that is what this government is facilitating." After being forced to cancel a major contract to extend the existing airport in Maldives only to see the Chinese pitching in to help build a crucial $300 million road link between the airport and the capital, Malé, the Indian government has made its apprehensions obvious, thus causing Abdulla Yameen to go out of his way to reassure India’s leaders of his efforts to ensure the Indian Ocean remained a ‘demilitarised zone’. Even members of the opposition party have expressed fears regarding what they term as a dangerous new development as they believe that their small nation, comprising of up to 1,200 tiny islands, will be caught up in a cold war brewing between India and China. However, these claims have been rejected by the newly appointed vice-president, Ahmed Adeeb, who says the move is merely aimed at attracting foreign investment in the same way as Dubai, Singapore and Saudi Arabia had done with special zones. “Our sovereignty is not on offer,” Deeb told The Hindu, an Indian newspaper, adding, “We don’t want to give any of our neighbours, including India … any cause for concern. We don’t want to be in a position when we become a threat to our neighbours.” In spite of all assurances made by the Maldivian government on the new move not posing “any danger to either the Maldivian people or our neighboring countries”, officials in Delhi have stated that they are viewing Abdulla Yameen’s comments ‘closely’. What remains to be seen, once the dust settles, is whether the environment will be conducive enough for negotiations or whether it will pave the way for a standoff between two of the most powerful nations of the 21st century. Only time will tell.