Maldives Economy during Covid19 Pandemic and Post Pandemic Times

Like other countries in the world, Maldives has to suffer from covid19 pandemic mainly due to over dependent on Tourism Industry (Directly contributes approx 22% of GDP) ) to nation's economy. The drastic fall in arrivals before lock down of the country clearly warns how industry will be in he lock down period. Million dollars of investment to raise tourism establishments and properties become now not worthy. The tourism growth during recovery and post pandemic is also doubtful since Covid19 recovery in countries will be different and it has created a global threat to the travel industry in general. 

More doubtful to me, the fact that major resort owners cannot take care of their employees, leaving them with unfair options like, no pay leave for three months, basic salary for three months, fixed small remuneration for three months and in worst case scenario voluntary resignation and legal redundancies. From past operations of these resorts it is evident that most of them break even at 30 – 40% occupancy provided that they are high end luxury resorts. This means when these resorts are in operations for decades they could have retained solid lucrative profits which will be enough to take care of their hardworking 400 plus employees with all financial benefits for three months period.

Leaving resort workers estimating the number up to 20000 plus, economically vulnerable, trigger the public expenditure making the state compulsory to introduce care packages, allowances and financial support program to meet basic necessities.

Parallel impacts are observed in fishing and agricultural sector due to full lock down of people and restriction of movement of people and transport net work of the country. It now started increasing the cost of production than the revenue earned. Fish can not be exported to Europe due to lock down of many nations. Domestically crop can not be grown and transported to crowded cities and islands in the atolls for consumption due to covid19 fear and actions taken.

Simultaneously the circular flow of income in the country is affecting adversely leaving MSMEs financially vulnerable. Yes, there is covid19 fund support mechanism developed by SDFC , government of Maldives but the funds allocated does not meet the demands of MSMEs in the long run. Amongst, the worst impact hits on self-employed people like DJs, Masons, Taxi Drivers, Bakers, Weavers etc…

It is worthy to praise President Ibrahim Mohamed Solih taking and introducing civic and business support programs at this difficult situation. A government is doing what a government can do with her own limitations. I urge to use our savings wisely , manage it. Manage savings with necessity consumption for months to come. Try to circulate the money in banks and hands in the economy to make it more active. Help each other to eradicate the physiological impacts of covid19. The post pandemic times will leave us new normal. New normal living rules and a new way of life. Hopefully a more descent and respectful life.  We shall use post pandemic times wisely to create a solid primary and secondary sectors of production in the Maldives Economy. Let us make Maldives more green and less vulnerable. Move towards a sustainable economy.