Maldives is the smallest country of South Asia. But its significance is no less because of its crucial geo-strategic location in the Indian Ocean. It is situated on the major sea lanes of communications (SLOCs). However, the geo-strategic location of the Maldives has also caused problems for the country, as it has aroused interests of major world powers. They have tried to meddle in the domestic politics of the Maldives so that a favourable dispensation can come to power, which in turn would promote their interests in the country and in the Indian Ocean Region (IOR). Maldives became a multi-party democracy in October 2008 when a new Constitution was implemented. This was a positive development in a Sunni Muslim dominated country, as a number of other Muslim countries were moving on the path of extremism. Ironically, the multi-party democracy also allowed the rise of extremism, as radicals used the available democratic space to their advantage. Unfortunately, the first democratic government in the Maldives could not complete its full term and the ensuing political instability led to greater meddling by external powers in its domestic Politics.