DTIS, Volume I - Enhanced Integrated Framework (EIF)

Penetration of international markets that are highly competitive will require some
investment in marketing effort. One highly successful campaign is the Norwegian
Seafood Campaign, which almost doubled exports of Norwegian seafood products over
five years. Although MIFCO has participated in international trade fairs, including the
European Seafood Exposition (ESE) in Brussels in 2004, assisted by the Ministry of
Fisheries, Agriculture and Marine Environment (MFAMR), a strategic campaign effort
embracing government and the private sector will be required for the Maldives.
Participation at ESE 2004 was initiated through the Maldivian membership of
INFOFISH, an industry body, and was part of a joint effort with other island countries of
the Asia-Pacific area. However, the promotion of Maldivian fish products at the ESE had
positive results in terms of raising awareness about the high quality of the Maldivian
products.
V. Services Exports
Tourism is the Maldives’ dominant service export. The Maldivian tourism industry is
characterised by pre-travel payments whereby package tours are purchased in the
tourists’ home countries. Aside from air transport, such pre-paid services by definition
include one or more services provided in the Maldives, normally accommodation, food,
transfers, tours and specific services as e.g. diving instruction and day trips. However, the
payments made by the tourists accrue to a large extent, and at least in the first instance, to
the tour operators located in the country of payment and thus only partially enter the
Maldivian local economy when the tour operator pays local service providers for their
share of the package arrangement. In general, the tour operators include a commission in
the order of 10-15 per cent of the package price. This amount remains with the operators
in the source markets. Similarly, the cost of international air transport does not accrue to
the Maldives since the country does not operate an airline.
Thus the earnings from tourism receipts accruing to the Maldives is the proportion of the
package price that is transferred to Maldives operators, together with what the tourists
spend while in the Maldives. There is no accounting system in the Maldives to capture all
these incomes. The Maldives Monetary Authority (MMA) estimated total tourism
receipts to be Rf 6,144 million (US$ 480 million) in 2004 based on a survey of tour and
the Maldivian resort operators. This is believed to be an under-estimate, but is still
substantial foreign exchange earning that is more than three times as high as the country’s
total visible export earnings from all other economic sectors. The estimate also reflects a
continuous annual growth rate in the tourism industry averaging almost 14 per cent over
the two decades since 1985. There were approximately 616,000 tourist arrivals in 2004
(see Table 3.9), which corresponds to an average total expenditure per tourist of Rf 9,920
(US$ 775).
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