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MALDIVES
Economy

Economy

General

The Maldives' economy is doing reasonably well. Growth was close to 10% per year in the first half of the 1980s. After that, the growth rate slowed down slightly but is still around 4.8% per year at the moment (2017). Despite these reasonably nice figures, the economy of the Maldives is vulnerable because it is basically based only on income from tourism and fishing. Moreover, due to the country's geographical structure, infrastructure and transport costs are very high. Furthermore, a lot of money flows abroad because that is where mostly the owners of the tourist resorts live. The gross national product in 2017 is about $19,200 per capita per year. Compared to other countries in South Asia, this is quite a lot, but still does not mean that the average Maldivian earns much. It is mainly because a few wealthy families who largely control the economy make very large amounts of money.

The government also has a lot of influence on economic life. There is a state monopoly on all foreign trade. There is no real poverty in the Maldives, but that is also because everyone helps each other in difficult times and thus forms a social safety net outside the government. Unemployment is 2.9% (2017), there are even labor shortages in various sectors. Hence, in the last 20 years, more and more foreign workers are being hired from Sri Lanka, India and Bangladesh in particular.

The government is a (too) large employer, employing more than 20,000 civil servants. Many people have an income from their regular jobs, as well as side jobs in trade or tourism.

The Maldives exported $256 million in 2017, mainly to France, Thailand, the United States, Sri Lanka and Japan. Imports totaled $2.1 billion in 2017 from mainly United Arab Emirates, Singapore, India, Malaysia, Sri Lanka, Japan and Germany.

Fishing and shipbuilding

Fishing used to be the most important economic sector. Today, fishing is second only to tourism.

Fish and other marine products make up more than half of all exports and also provide half of all export income. Tuna is fished mainly, about 100,000 tons per year. Other fish species caught are wahoo, mackerel, frigate fish and grouper. Sea cucumbers are exported to Chinese restaurants of Hong Kong and Singapore. Fish are still caught in the traditional way, i.e. with lines and rods instead of the banned dragnets. Unfortunately, countries like Japan, Sri Lanka and South Korea do not take much notice of that ban.

Boats are of course vital to the Maldivian people. Hence, boat building is a specialty of the Maldivians. Boats, called dhonis, are of course used for fishing, but also for transporting people and goods. Although now motorized, they hardly differ in structure and shape from their unmotorized predecessors. Moreover, until air travel took off, ships were the only connection to other countries. Unfortunately, shipping has declined due to the global recession.

Agriculture and animal husbandry

The agricultural sector in the Maldives is very small and mainly focused on domestic consumption. Only 5% of the total land area is suitable for growing crops. 7% of the labor force is employed in agriculture.

Fruit crops include bananas, pineapples, limes, mangoes, and watermelons and are grown on the only truly fertile island, Fua Mulaku.

The coconut palm occupies an important place, also for the economy, and is therefore also the national tree of the Maldives. The coconuts are of course used as food and further coconut oil is extracted from the bark of the nut. The fibers of the coconut are processed into sisal for rope and mats. The sap from the trunk is used for syrup and the trunks are used in ship and house building.

Vegetables grown include chilies, onions, cassava, bread roots, millet, pumpkins and tomatoes.

Animal husbandry is also not very important. Here and there some chickens, goats and cattle are kept. Again, this is only for their own consumption because the keeping of cattle is even officially prohibited due to environmental considerations. A lot of money is currently being invested in the agricultural sector because a lot of food has to be imported, which costs a lot of money.

Industry

The Maldives has some somewhat larger industries. For example, there are factories that make PVC pipes, soap powder, and fiberglass boats. There is even a Coca Cola factory on the island of Thulusdhoo. Because of tourism and increasing high-rise buildings due to overpopulation, the construction industry is doing good business.

There are also some garment factories and a strongly growing fish canning industry. The main exports are fishery products and textiles to Thailand, EU countries and Sri Lanka. Food products, petroleum products and investment goods are imported from Singapore, Sri Lanka and European Union countries.

Traditional handicrafts include boat building, mat weaving, lacquerware making (boxes, trays, vases) and coconut rope industry. In fact, coconut rope used to be an important export product. With the very strong coconut rope planks of ships were tied together.

There are also many small bakeries, tailor shops and furniture workshops, obviously only working for the local population.


Sources

Derksen, G. / Maldiven
Gottmer

Ellis, R. / Maldives
Bradt

Lyon, J. / Maldives
Lonely Planet

Vliet, E. van / Reishandboek Malediven
Elmar

Voigtmann, H. / Malediven
ECI

CIA - World Factbook

BBC - Country Profiles

Last updated May 2024
Copyright: Team The World of Info