Strategic stories from the Indian Ocean — this week’s hidden currents
Mauritius: deputy governor exit under political pressure
The resignation of a Deputy Governor highlights tensions between political demands and central bank independence. The move unsettles investor confidence and raises questions on monetary policy credibility.
Reserves, rupee management, and offshore financial flows remain exposed to governance signals.
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Sri Lanka: port rivalry sharpens
Colombo retains volume dominance, but Hambantota’s China-backed expansion challenges balance. Debt restructuring adds geopolitical weight to commercial port competition.
Insurers and shippers track throughput shifts as proxy for creditor influence.
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Seychelles: fisheries and finance converge
Seychelles promotes tuna and marine conservation bonds while using revenues to anchor sovereign balance sheets. Fisheries exports are geopolitical as much as economic.
Climate-linked financing channels are key to sustaining debt relief gains.
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Maldives: tourism vs debt trap
Tourism receipts rebound strongly, but debt owed to China keeps fiscal pressure high. Political alignment with Beijing or Delhi remains an unspoken condition of debt relief.
Seasonal flows cover obligations, leaving little room for buffers.
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Madagascar: vanilla volatility
Global vanilla prices spike with cyclones and speculation. Farmers benefit short-term, but volatility erodes fiscal planning. Export receipts anchor foreign reserves.
Reform of export auctions is on the policy docket.
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Comoros: remittance lifeline
Remittances remain the primary source of foreign exchange, often exceeding 20% of GDP. They cover consumption but little investment, leaving structural dependence unaddressed.
Policy reforms focus on reducing transfer costs and mobilizing savings channels.
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Undersea cables: fragile chokepoints
Indian Ocean islands depend on a handful of submarine cable landings. Any cut or outage ripples through banking, tourism, and security services.
Regional redundancy plans lag behind Asia and Africa.
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Piracy insurance: Gulf of Aden spillover
Recent vessel attacks near Somalia and Yemen revive concerns that piracy risk is creeping back. Insurers raise premiums, quietly taxing trade routes through the Indian Ocean.
Shippers weigh rerouting vs cost of cover.
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Réunion (France): energy link plans
Interconnection proposals aim to integrate wind/solar between Réunion and Mauritius, but financing and grid compatibility remain hurdles.
Paris frames it as EU green diplomacy in the Indian Ocean.
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