DTIS, Volume I - Enhanced Integrated Framework (EIF)

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Infrastructure is a major challenge in the Maldives with its highly dispersed population and insularity. The priority that was given by the government to the development of telecommunications infrastructure has paid off in terms of connectivity throughout the country. Mobile telephony has also grown substantially. But inter-island transport remains difficult with many of the smaller islands lacking adequate harbours and jetties. In addition, ferry services to connect the more distant atolls are inadequate. The main port at Male’ is congested and various options that have been considered for further port development need to be acted upon. While the international airport at Hulhumale’ has been expended in particular to service the tourism industry, there is scope for upgrading airfields in various parts of the country. A strategic approach to the management of intermodal transport services is required if the country is to overcome the various gaps in its transport infrastructure. Competitiveness is also reduced by high factor costs. In addition to transport costs there are also generally higher costs of labour, energy, electricity and water supply relative to the neighbouring countries. These additional factor costs impose further limitations in the competitiveness of investments in outlying atolls and generate time delays in deliveries. Moreover, this is aggravated by the limited port capacity and transport service delivery system, which augments costs for transport companies and their clients. In addition, uncertainty regarding delivery induces the need to keep additional stocks which places further strains on cash flow and credits needed for business operations. Efficiency and cost of communication services is another important consideration for investors, especially given the geographical characteristics of Maldives. The communications sector has experienced substantial foreign investment during recent years both as regards establishment of service providers, physical infrastructure (cables and masts), and consumer end products. Sales of mobile telephones tripled in the last two years. International fibre optic cables that will provide broadband access are coming to Maldives through India and Sri Lanka and should eventually link the main atoll groups. However, it is likely that the small size of the market composed of public institutions, the business community and private consumers could limit the number service providers and thereby competition in the longer term. E. LABOUR MARKET As the country has become richer, wage rates have also increased. Maldivian wages are on average 40 per cent higher than wages in neighbouring countries. As a result, private businesses in dynamic sectors such as tourism, construction and transport and communications have increasingly imported the skills they require from the South Asia region, although to some extent, this is also due to the shortage of relevant skills among Maldivians. There are other major labour market rigidities related to cultural and traditional norms, especially concerning women. In 2004, there were 38,000 expatriate workers in the Maldives, which is 44 per cent of the work force. 67
F. LAND, RAW MATERIALS AND SUPPLIES In the case of the Maldives, land is not available in abundance although tourism is reliant on the country’s string of islands, pristine beaches and lagoons. Land mass is limited to 300 km2 and is dispersed over an 850 km North-South fairly narrow stretch. This peculiarity of land mass and its distribution imposes severe physical limitations on the availability of land as a factor of production. The government owns all land and allocates it, including through leasing, for various purposes such as housing, agriculture, tourist resorts, industry, etc. However, leased contracts are not considered suitable as collateral – a critical issue for commercial bank lending for SME start-ups. Fish is the major natural resource. There are high costs associated with energy and water, which limit the scope for competitive business activities. III. Main Recommendations The foregoing review of the institutional architecture for private sector support and the environment for business development in the Maldives points to the following recommendations for policy and institutional reform. A. INVESTMENT AND BUSINESS SUPPORT • There is no clear strategy for both foreign and local investment promotion and business support. The 6 th National Development was almost silent on this issue. The preparation of the 7 th National Development Plan is an opportunity to focus on viable strategies for investment promotion and business support. • The arrangements for investment promotion and business support for the tourism sector appear to be working well although greater transparency is required. However, for non-tourism investments that fall within the responsibility of FISB, there should be a clear distinction on the one hand between investment promotion and business support services and, on the other, investment regulation to conform to various requirements. • To give effect to this distinction, consideration should also be given to the establishment of a cell within the FISB that will be specifically responsible for 68
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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
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
Page 61 and 62: Several provisions such as Article
Page 63 and 64: CHAPTER 4 POVERTY REDUCTION AND HUM
Page 65 and 66: Table 4.2: Poverty Gap Ratios per R
Page 67 and 68: 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: system of micro-credit intermediari
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 and 120: Similarly, considerable demand was
Page 121 and 122: for imports of support infrastructu
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
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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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