By Dr. James M. Minnich

HONOLULU — August 12, 2025

In the contested waters of the Indian Ocean, the Maldives is proving that size does not dictate influence. With just over half a million people and limited hard power, the island nation is not merely weathering great-power competition—it is actively shaping it. In Dialogue Episode 49, Dr. Andrea Malji, an expert on South Asia and Indian Ocean geopolitics, explains how geography, governance, and diplomatic agility form the core of Malé’s strategic playbook.

Strategic Geography and Leverage

The Maldives’ most valuable asset is its location. Sitting astride vital sea lanes connecting the Middle East, Africa, and Asia, Malé commands a front-row seat on one of the world’s busiest maritime highways. “We often overlook [small states] as… passive bystanders,” Malji observes, “but these states have preferences as well, and… geostrategic locations that they can leverage.” This geography is more than a point on a map—it is bargaining power.

Selective Alignment over Neutrality

The Maldives has chosen neither rigid alliances nor hands-off neutrality. Instead, it practices selective alignment—engaging different powers based on specific national priorities. “There’s an important area between…non-alignment and passive hedging…which is this multialignment,” Malji explains. This pragmatic stance allows Malé to sequence projects and partnerships to maximize strategic and economic returns.

China’s Footprint, Managed Risk

Chinese investments have reshaped Maldivian infrastructure, from the Sinamalé Bridge to expansive land reclamation projects. Dual-use concerns are real, Malji notes: “Any kind of large infrastructure project is going to come with…potential risks of…dual [use].” But Malé has learned from regional cautionary tales, adopting parliamentary oversight, ensuring civilian rather than military involvement, and maintaining diversified borrowing. “One of the biggest advantages the Maldives has compared to Sri Lanka is that it has hindsight,” she says.

India Reset after Friction

Longstanding ties with India bring both cooperation and political sensitivities. The “India Out” campaign underscored domestic anxieties over sovereignty, especially concerning Indian military personnel linked to donated aircraft. Yet relations have rebounded. “The relationship… is almost the best that it’s been,” Malji notes, citing India’s decision to replace military staff with civilians. “It went from ‘India Out’ to India is definitely back in.”

The U.S. as a Quiet Partner

U.S. engagement is more understated but strategically focused. The opening of the U.S. embassy in 2023 signaled a deeper relationship, complemented by professional military education, training programs, and maritime domain awareness support. This lower-profile approach strengthens capacity while avoiding the domestic backlash that can accompany more visible partnerships.

Diversifying Beyond the “Big Three”

Malé is also looking beyond China, India, and the United States, courting Gulf partners and launching ambitious initiatives such as the proposed $8.8 billion Maldives International Financial Centre. Intended as an offshore financial hub, the project signals an economic diversification drive—but its price tag, exceeding the nation’s GDP, carries significant risk. “The budget is very large… larger than the entire GDP of the Maldives,” Malji cautions.

Institutional Speed: Strength and Risk

A centralized government enables rapid policy pivots. Decisions, Malji explains, “can be made and executed and move really fast.” Combined with high per-capita income and strong social cohesion, this speed gives Malé flexibility—but it can also bypass important safeguards, leaving policy vulnerable to leadership shifts.

Outlook

The sustainability of Malé’s approach will depend on near-term financial indicators. “Look at the debt…as these loans mature…are there going to be any downgrades? Malji asks. She also notes a subtle drift toward tradition: “We do seem to be moving closer to India…back home…to our historical partner.”

The Maldives remind us that strategic agency is not reserved for great powers. As Malji explains, small states are engaging in the geopolitical landscape, finding a way to navigate “where they can assert their preferences while still protecting their sovereignty.”

Further Reading

Small States in a Shifting International Order, edited by Kristen P. Williams, Steven E. Lobell, and Neal G. Jesse (Georgetown University Press, 2025), explores how small states navigate asymmetrical power relationships and an evolving global system.