DTIS, Volume I - Enhanced Integrated Framework (EIF)

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EXECUTIVE SUMMARY A. GEOGRAPHICAL FEATURES The Maldives is a low-lying archipelago consisting of approximately 1,190 islands, located in the Indian Ocean southwest of Sri Lanka. It has exclusive economic rights over some 859,000 km of sea surrounding the islands but its land mass is limited to only 300 km and is widely scattered over an 850 km north-south fairly narrow stretch. Its population of around 300,000 people inhabits about 200 islands, dispersed in 26 geographical atolls 1 , and organized in 20 regional administrative units. One third of the inhabited islands have a population of less than 500, the rest have a population of less than 1,000. This exceptionally wide dispersion of its people makes the Maldives unique, even among other countries that are archipelagos. Of the remaining islands, 87 are tourist resorts and 57 are leased for commercial agriculture or used for industrial activity and garbage storage. Accordingly, the vast majority of the islands are uninhabited although a few of these are used for subsistence agriculture. The surrounding sea contains enormous fishery resources. The islands are also an attractive tourist destination given their sandy white beaches and clear lagoons, bringing more than 600,000 tourist arrivals in 2004. The main natural endowments are thus associated with the marine environment. However, the meagre landmass is a causal factor limiting economic opportunities and market development and the country’s geographical features incur high transport costs, thus putting pressure on the competitiveness of the economy. B. GOVERNMENT The Maldives is an independent sovereign nation governed under a democratic executivestyle system. The capital Male’ is situated roughly almost at the middle of the north-south string of islands that make up the country. The president, also head of state and government, and lawmakers are elected according to universally accepted democratic principles for a term of five years. Each atoll is represented in the country’s legislature. Over the years, the country has been politically stable, and in May 2005, the first steps for introducing a multiparty system were taken. 1 Atoll is derived from the Maldivian word atholhu, the only Maldivian word that has become international. It identifies an atoll as a number of islands sharing a common outer reef; there can be one to several hundreds of islands forming an atoll. x
C. ECONOMIC TRENDS Buoyant GDP growth of up to 6 – 9 per cent year driven by investment in the tourism sector with negative or very low levels of inflation is a distinctive feature of the economy in recent years. Significant progress has also been achieved in human and social development over the past two decades. Prudent macroeconomic and public investment policies as well as a largely favourable external environment has facilitated this progress, lifting the Maldives from being one of the 20 poorest countries in the 1970s to one that shares many characteristics of a lower middle-income country today. The GDP per capita was Rf 30,733 (US$ 2,401 equivalent) in 2004. As a result, the Maldives’ graduation from LDC status is a real possibility. However, the government would prefer to delay graduation so as not to lose foreign assistance – including participation in the Integrated Framework – that is critical to the country’s recovery from the divesting tsunami that hit the Maldives and other countries in the region on 26 th December 2004. Although loss of human life was minimal, it is estimated that the loss to the economy caused by the tsunami is around 62 per cent of GDP, with full recovery not expected before 2008. It is understood that the United Nations Economic and Social Council (ECOSOC) is sensitive to the government’s need for a carefully managed graduation programme with appropriate transition arrangements. Though liberalization of the economy is advanced and economic growth rates are nominally high, a significant proportion of the jobs created have gone to foreign workers due to rigidities in the local labour market. For a variety of reasons that is elaborated upon in the DTIS, relatively high levels of unemployment and underemployment are a distinctive characteristic of the economy. Flexibility in macro-economic policy is somewhat limited as the country’s currency, the Rufiyaa, is pegged to the US dollar. Recent developments have had a negative impact on trade and economic performance. In particular, there has been a dramatic change in 2005 following the tsunami. This resulted in a downturn in the tourism sector which contributes substantially both to GDP and to foreign exchange earnings. In addition, the garment and apparel industry literally collapsed during 2004 as the end of the Multi-Fibre Agreement (MFA) quota system approached. Rising oil prices throughout 2005 and during the first half of 2006 has brought about a downward spiral in the terms of trade. The boom years that Maldives has experienced in recent years up to 2004 may now be at an end. There is therefore an urgent need to address this situation so that measures can be taken to mitigate the problems that are now being experienced. To this extent, the DTIS exercise for the Maldives has been more than timely. xi
Page 1 and 2: FINAL R E P O R T Volume 1 MALDIVES
Page 3 and 4: GSP HACCP HDFC HDI HIES HH HRD HS I
Page 5 and 6: TRIPS TRTA TSA TTMP UAE UK UNCTAD U
Page 7 and 8: CHAPTER 6: CUSTOMS SERVICES AND TRA
Page 9: major stakeholders as the basis of
Page 13 and 14: WTO members (through the Committee
Page 15 and 16: The recommendations cover these iss
Page 17 and 18: Requirements Action no. Action reco
Page 25 and 26: government, and lawmakers are elect
Page 27 and 28: . 4
Page 29 and 30: to Sri Lanka. However, by 2004 the
Page 31 and 32: This relatively high proportion of
Page 33 and 34: On an annual basis, total NFA of th
Page 35 and 36: elow provides data on the public in
Page 37 and 38: According to the estimates prepared
Page 39 and 40: Table 2.8: Damage to agricultural f
Page 41 and 42: II. Imports - Merchandise There has
Page 43 and 44: the relatively high rate of unemplo
Page 45 and 46: A. DESTINATION OF MERCHANDISE EXPOR
Page 47 and 48: Penetration of international market
Page 49 and 50: Overall, the importance of foreign
Page 51 and 52: on goods deemed luxury goods (e.g.
Page 53 and 54: the Japan and USA markets. 11 Fish
Page 55 and 56: The Modalities provide that the res
Page 57 and 58: emoved. However, in order to provid
Page 59 and 60: EBA. Appropriate transition arrange
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Several provisions such as Article
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CHAPTER 4 POVERTY REDUCTION AND HUM
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Table 4.2: Poverty Gap Ratios per R
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produced locally and are readily av
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commerce, information and communica
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Table 4.3: Fishery Sector employmen
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This also requires policies that ta
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with routine functions of administe
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Applying for a license to invest in
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E. MINISTRY OF FISHERIES, AGRICULTU
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K. PRIVATE SECTOR STAKEHOLDERS Priv
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Overall, it is estimated that the c
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The cash is held and disbursed by t
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difficult to reach given the except
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system of micro-credit intermediari
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F. LAND, RAW MATERIALS AND SUPPLIES
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B. LABOUR MARKET REFORM About 44 pe
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Appendix The mixed record of the Ma
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legislation incorporates the initia
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CHAPTER 6 CUSTOMS SERVICES AND TRAN
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Maldives Port Authority • Respons
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the correct amount of customs duty
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suspense procedures, thus eliminati
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A new domestic terminal at MIA will
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There is need to clarify MAC’s na
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Changes in the role and structure o
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Significant improvements have been
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CHAPTER 7 THE TOURISM SECTOR Chapte
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British market in 2001. In 2004, be
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Similarly, considerable demand was
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for imports of support infrastructu
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government revenues from the supply
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number of trainees that have been t
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established as a quality tourism de
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Maldives' unspoiled marine environm
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The Faculty works very closely with
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TOURISM ACT A key objective of the
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HRD studies and conduct of necessar
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D. ESTABLISH AN ENABLING BUSINESS E
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Main Recommendation No. 5: review a
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Main Recommendation No. 6: Scale-up
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CHAPTER 8 FISHERY SECTOR Chapter Pl
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processing under-performing more th
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per cent - see Table 8.4. The secto
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In the light of these market trends
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documentation, and administration.
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monitoring and evaluation dates fro
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and catering industry chefs demand
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It is expected that the trial fishe
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• Can seaming and retorting; •
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DTIS, Volume I - Enhanced Integrated Framework (EIF)

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