In Maldives a multi-party democracy was ushered in towards the end of the year 2008. The newly elected government of president Nasheed tried to deepen this democracy during 2009 by holding elections for the Majlis. His government is faced with several challenges. The profligate economic policies of President Gayoom had left the country nearly bankrupt. The economic woes were worsened by the global recession. President Nasheed managed the situation well by seeking financial assistance from international institutions and friendly countries. He also implemented certain austerity measures which helped improve the situation though they also made him somewhat unpopular. Maldives is also facing the problem of rising Islamic fundamentalism. This problem has now been acknowledged by President Nasheed who proposes to take action in consultation with the security and defence agencies of the country. For the low-lying islands of Maldives climate change has been a serious issue. In the past year, Nasheed managed to highlight the issue at several international fora. His government also took several steps on the foreign policy front.His government took a bold step of reviving ties with Israel. The country’s relationship with India has also seen marked improvement. Its relationship with the US and China has also been growing. The new constitution is working well and the country at present seems to be well on the road towards a genuine democracy.