Tourism is the largest industry in the Maldives, accounting for 20% of GDP and more than 60% of the Maldives' foreign exchange receipts. It powered the current GDP per capita to expand 265% in the 1980s and a further 115% in the 1990s. Over 90% of government tax revenue flows in from import duties and tourism-related taxes.
Fishing is the second leading sector in the Maldives. The economic reform program by the government in 1989 lifted import quotas and opened some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment.
Agriculture and manufacturing play a minor role in the economy, constrained by the limited availability of cultivable land and shortage of domestic labour. Most staple foods are imported.
Industry in the Maldives consists mainly of garment production, boat building, and handicrafts. It accounts for about 18% of GDP. Maldivian authorities are concerned about the impact of erosion and possible global warming in the low-lying country.
Among the 1,900 islands in the Maldives, only 198 are uninhabited. The population is scattered throughout the country, and the greatest concentration is on the capital island, Malé. Limitations on potable water and arable land, plus the added difficulty of congestion are some of the problems faced by households in Malé.
Development of the infrastructure is mainly dependent on the tourism industry and its complementary tertiary sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and it is used to improve technology in the agricultural sector.
|Year||Gross Domestic Product||US Dollar Exchange|
For purchasing power parity comparisons, the US Dollar is exchanged at 8.36 Rufiyaa only. Average wages in 2007 hover around $14-17 per day.
The Maldives has experienced relatively low inflation throughout the recent years. Real GDP growth averaged about 10% in the 1980s. It expanded by an exceptional 16.2% in 1990, declined to 4% in 1993, and, over the 1995-2004 decade, real GDP growth averaged just over 7.5% per year. In 2005, as a result of the tsunami, the GDP contracted by about 5.5%; however, the economy rebounded in 2006 with a 13% increase.
The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million since 1997. The trade deficit declined to $233 million in 2000 from $262 million in 1999. In 2004 it was $444 million.
International shipping to and from the Maldives is mainly operated by the private sector with only a small fraction of the tonnage carried on vessels operated by the national carrier, Maldives Shipping Management Ltd.
Over the years, Maldives has received economic assistance from multilateral development organizations, including the United Nations Development Programme, Asian Development Bank, and the World Bank. Individual donors, including Japan, India, Australia, and European and Arab countries (such as Islamic Development Bank and the Kuwaiti Fund) also have contributed. See: Economic Aid to Maldives
In 1956, a bilateral agreement gave United Kingdom access to Gan in Addu Atoll in the far south, to establish an air facility in Gan in return for British aid. However, the agreement ended in 1976, shortly after the closing of the Gan air station.
Since the establishment of the first resort in 1972, over 84 islands have been developed as tourist resorts, with a total capacity of some 16,000 beds. The number of tourists (mainly from Europe) visiting the Maldives increased from 1,100 in 1972 to 280,000 in 1994. In 2000, tourist arrivals exceeded 466,000. The average occupancy rate is 68%, with the average number of tourists staying for 8 days and spending about $755.
In April 1987, high tides swept over the Maldives, inundating much of Malé and nearby islands which prompted Maldivian authorities to take global climatic changes seriously. An INQUA research in 2003 found that actual sea levels in the Maldives had dropped in the 1970s and forecasts little change in the next century. There is also concern over the questionable shark fishing practices in place in the island. Shark fishing is forbidden by law, but these laws are not enforced. The population of sharks has sharply decreased in recent years.
The Asian brown cloud hovering in the atmosphere over the northern Indian Ocean is also another concern. Studies show that decreased sunshine and increased acid rain from the cloud.
The modern schools are run by both the government and private sector, providing primary and secondary education simultaneously. As the modern English-medium school system expands, the traditional system is gradually being upgraded. By early 1998, more than 30 islands were equipped to provide education for grades, 8, 9, and 10. Some 164 islands provided education up to grade 5, 6, or 7. In Malé is the only school for grades 11 and 12, with a school in the southern most island of Gan scheduled to offer the final 2 years starting in 2002.
Seven post-secondary technical training institutes provide opportunities for youth to gain skills that are in demand. The World Bank has already committed $17 million for education development in 2000-04, and plans to commit further $15 million for human development and distance learning during this period. Over 2001-03, the ADB planned to support post-secondary education development in Maldives.
GDP - real growth rate: -3.60% (2006)
GDP - per capita: - $2,483 (2005)
GDP - composition by sector: (2004 est.)
Inflation rate (consumer prices): - 3% (1995-2004 average); 5.6% (2005 est.)
Labor force: estimated
Labor force - by occupation: (1995)
Unemployment rate: - NEGL%
Budget: (2004 est.)
Industries: fish processing, tourism, shipping, boat building, coconut processing, garments, woven mats, rope, handicrafts, coral and sand mining
Industrial production growth rate: estimated
Electricity - production: - 85 GWh (1998) and 135 million kWh (2003)
Electricity - production by source: - fossil fuel: - 100% (2005)
Electricity - consumption: - 79 GWh (1998) and 125.6 million kWh (2003)
Agriculture - products: - coconuts, corn, sweet potatoes; fish
Exports - commodities: - fish, clothing
Exports: - $123 million f.o.b. (2004 est.)
Exports - partners:
Imports - commodities: - petroleum products, ships, foodstuffs, textiles, clothing, intermediate and capital goods
Imports - major partners: - Singapore, India, Sri Lanka, Japan, Canada
Debt - external: estimated
Economic aid - recipient: - $NA
Currency: - 1 rufiyaa (Rf) = 100 laari
Exchange rates: - rufiyaa 12.80(Rf) per US$1 (2006)
Fiscal year: - calendar year