DTIS, Volume I - Enhanced Integrated Framework (EIF)

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fish and other marine products account for about two thirds. Moreover, tourism earnings have shown a formidable growth pattern with an average annual increase over the past two decades of almost 14 percent since 1985, when tourism receipts were estimated at USD 41.4 million, increasing to USD 88.7 million in 1990, USD 210.7 million in 1995, USD 320 in 2000 and to almost USD 480 million in 2004. The average annual increase in tourism earnings is even higher than the corresponding average annual increase in tourist arrivals of 9.3 per cent due to an increase in the estimated daily expenditure per tourists from USD 39 in 1985 to almost USD 94 in 2004. With some 616,000 arrivals in 2004, this corresponds to an average total expenditure per tourist of USD 775. There are grounds for believing that the MMA estimates undervalue earnings from tourism in the Maldives. This has also been confirmed and appreciated by the MMA. For example, a 1997 visitor expenditure survey by the Asian Development Bank showed average daily expenditure, excluding international air transport, of USD 120 for package tourists and USD 152 for non-package tourists. Similarly, the ADB study estimated total average expenditure per tourist at USD 1,367 excluding international air transport. Even without considering the effect of inflation, the estimates made by the ADB study seem to confirm that the MMA estimates are low. Overall, the importance of foreign exchange earnings from international tourism for the balance of payments of the Maldives cannot be overstated. The Maldives had a net deficit of just under USD 260 million on merchandise trade in 2003. Without the foreign exchange earnings from tourism, this deficit would not have been covered. E. FOREIGN EXCHANGE LEAKAGES – IMPORTS The need to import goods and services to support the tourism industry is traditionally referred to as leakages from the foreign exchange earnings of the sector. In the case of the Maldives, the import content of the tourism sector is high for both capital investment and operations. The primary operational leakages include: 1 Imports of consumables such as food and beverage, cleaning materials and equipment for leisure activities, etc. 2 Remittances by expatriate staff. 3 Payments to service foreign equity and dept capital. A 2000 UNDP/World Tourism Organization study of social, economic and environmental impacts of tourism in the Maldives estimates that one third of the gross foreign exchange earnings from tourism are used for imports. Using the ADB Tourist Expenditure Survey findings, the net foreign exchange earning in 2004 would then be USD 562 million. In addition to the operational leakages, there are capital imports in connection with the establishment of new tourist resorts or upgrading of existing facilities, as well as the need 97
for imports of support infrastructure, notably airport and air services, and to some extent sea transport services. These capital imports obviously vary with different levels of investment, determined to a large extent by the government’s lease policies. The abovementioned UNDP/WTO study estimates that the incremental capital output ratio (ICOR) is around 2:1, meaning an import content of 60-75 per cent of the total capital costs. In connection with capital investments for new tourism establishments and extension or upgrading of existing facilities, the Foreign Investments Act (Law No. 25/79) provides operators with the opportunity to seek exemption for duties and excise on capital imports. During normal operation most imports for the tourism industry are subject to a 10-20 per cent import duty. Overall, the total value of all merchandise imports into the Maldives is stated by the Ministry of Planning and National Development to be about USD 471 million in 2003. This is almost three times as much than in 1990, at which time it was valued at USD 138.3 million. This corresponds to an average annual growth rate of almost 10 percent. By comparison, during the same period the value of merchandise exports has only increased by an average annual rate of 6 percent. The box below illustrates the widening gap in the trade balance, something that can only be sustained by the foreign exchange earnings generated by tourism, and more than offsetting the annual trade imbalance. Comparison of Merchandise Exports and Imports 1990 - 2003 500.000 400.000 300.000 200.000 100.000 0 1990 1995 1997 1999 2001 2003 Total exports (f.o.b value in '000 US$) Total Imports (c.i.f value in '000 US$) F. CONTRIBUTION TO GOVERNMENT REVENUE/GOVERNMENT EXPENDITURE ON TOURISM The Ministry of Planning and National Development (MPND) estimates total government revenue in 2004 to be about USD 256 million (Rf. 3,260 million). The tourism sector contributes to government revenue both directly by means of three main tourism levies or taxation, and indirectly through taxation of other economic sectors servicing the tourism sector. 98
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FINAL R E P O R T Volume 1 MALDIVES
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GSP HACCP HDFC HDI HIES HH HRD HS I
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TRIPS TRTA TSA TTMP UAE UK UNCTAD U
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CHAPTER 6: CUSTOMS SERVICES AND TRA
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major stakeholders as the basis of
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C. ECONOMIC TRENDS Buoyant GDP grow
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WTO members (through the Committee
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The recommendations cover these iss
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Requirements Action no. Action reco
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government, and lawmakers are elect
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. 4
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to Sri Lanka. However, by 2004 the
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This relatively high proportion of
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On an annual basis, total NFA of th
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elow provides data on the public in
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According to the estimates prepared
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Table 2.8: Damage to agricultural f
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II. Imports - Merchandise There has
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the relatively high rate of unemplo
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A. DESTINATION OF MERCHANDISE EXPOR
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Penetration of international market
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Overall, the importance of foreign
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on goods deemed luxury goods (e.g.
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the Japan and USA markets. 11 Fish
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The Modalities provide that the res
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emoved. However, in order to provid
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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
Page 69 and 70: commerce, information and communica
Page 71 and 72: Table 4.3: Fishery Sector employmen
Page 73 and 74: This also requires policies that ta
Page 75 and 76: with routine functions of administe
Page 77 and 78: Applying for a license to invest in
Page 79 and 80: E. MINISTRY OF FISHERIES, AGRICULTU
Page 81 and 82: K. PRIVATE SECTOR STAKEHOLDERS Priv
Page 83 and 84: Overall, it is estimated that the c
Page 85 and 86: The cash is held and disbursed by t
Page 87 and 88: difficult to reach given the except
Page 89 and 90: system of micro-credit intermediari
Page 91 and 92: F. LAND, RAW MATERIALS AND SUPPLIES
Page 93 and 94: B. LABOUR MARKET REFORM About 44 pe
Page 95 and 96: Appendix The mixed record of the Ma
Page 97 and 98: legislation incorporates the initia
Page 99 and 100: CHAPTER 6 CUSTOMS SERVICES AND TRAN
Page 101 and 102: Maldives Port Authority • Respons
Page 103 and 104: the correct amount of customs duty
Page 105 and 106: suspense procedures, thus eliminati
Page 107 and 108: A new domestic terminal at MIA will
Page 109 and 110: There is need to clarify MAC’s na
Page 111 and 112: Changes in the role and structure o
Page 113 and 114: Significant improvements have been
Page 115 and 116: CHAPTER 7 THE TOURISM SECTOR Chapte
Page 117 and 118: British market in 2001. In 2004, be
Page 119: Similarly, considerable demand was
Page 123 and 124: government revenues from the supply
Page 125 and 126: number of trainees that have been t
Page 127 and 128: established as a quality tourism de
Page 129 and 130: Maldives' unspoiled marine environm
Page 131 and 132: The Faculty works very closely with
Page 133 and 134: TOURISM ACT A key objective of the
Page 135 and 136: HRD studies and conduct of necessar
Page 137 and 138: D. ESTABLISH AN ENABLING BUSINESS E
Page 139 and 140: Main Recommendation No. 5: review a
Page 141 and 142: Main Recommendation No. 6: Scale-up
Page 143 and 144: CHAPTER 8 FISHERY SECTOR Chapter Pl
Page 145 and 146: processing under-performing more th
Page 147 and 148: per cent - see Table 8.4. The secto
Page 149 and 150: In the light of these market trends
Page 151 and 152: documentation, and administration.
Page 153 and 154: monitoring and evaluation dates fro
Page 155 and 156: and catering industry chefs demand
Page 157 and 158: It is expected that the trial fishe
Page 159 and 160: • Can seaming and retorting; •
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DTIS, Volume I - Enhanced Integrated Framework (EIF)

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