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After a coup attempt in 1988, mercenaries quickly gained the nearby airport on Hulele, but failed to capture President Gayoom, who fled from house to house and asked for military intervention from India, the United States, and Britain. Indian prime minister Rajiv Gandhi immediately dispatched 1,600 troops by air to restore order in Malé. Less than twelve hours later, Indian paratroopers arrived on Hulele, causing some of the mercenaries to flee toward Sri Lanka in their freighter.

In 1957 the new prime minister, Ibrahim Nasir, called for a review of the agreement in the interest of shortening the lease and increasing the annual payment. But Nasir, who was theoretically responsible to then sultan Muhammad Farid Didi, was challenged in 1959 by a local secessionist movement in the southern atolls that benefited economically from the British presence on Gan. This group cut ties with the Maldives government and formed an independent state with Abdulla Afif Didi as president.

During the 1970s, the economic situation in Maldives suffered a setback when the Sri Lankan market for Maldives' main export of dried fish collapsed. Adding to the problems was the British decision in 1975 to close its airfield on Gan in line with its new policy of abandoning defense commitments east of the Suez Canal. A steep commercial decline followed the evacuation of Gan in March 1976. As a result, the popularity of Nasir's government suffered.

In 1978 Maldives joined the International Monetary Fund and the World Bank. Tourism also gained in importance to the local economy, reaching more than 120,000 visitors in 1985. The local populace appeared to benefit from increased tourism and the corresponding increase in foreign contacts involving various development projects.

Maldives' nearest neighbors are Sri Lanka and India, both of which have had cultural and economic ties with Maldives for centuries. Although under nominal Portuguese, Dutch, and British influences after the sixteenth century, Maldivians were left to govern themselves under a long line of sultans and occasionally sultanas.

The importance of the Arabs as traders in the Indian Ocean by the twelfth century A.D. may partly explain why the last Buddhist king of Maldives converted to Islam in the year 1153. The king thereupon adopted the Muslim title and name of Sultan Muhammad al Adil, initiating a series of six dynasties consisting of eighty-four sultans and sultanas that lasted until 1932 when the sultanate became elective.

Maumoon Abdul Gayoom, first elected president in 1978 and has retained power since. He has ruled in an authoritarian manner. He survived a coup attempt that was foiled with help of Indian troops in 1988.

Caused by the 2004 Indian Ocean earthquake, a tsunami in the Indian Ocean saw parts of Maldives be covered by sea water and many people homeless. After the disaster, cartographers are planning to redraw the maps of the islands due to alterations by the tsunami. The people and government are worried that Maldives would be wiped out from the map eventually.