Spotlight –
Sandun Hapugoda has shaped Mastercard into a key player in the Maldivian payments landscape.
IMF Warns of Rising Fiscal Risks in Maldives, Calls for Urgent Economic Reforms
From Volume to Value, Rethinking Success in Maldives Tourism
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Greetings and welcome to the March 2025 edition of Corporate Maldives Magazine. As a quarterly print publication, we remain dedicated to providing comprehensive coverage of the Maldives business community.
In this edition, our Corporate Maldives Spotlight shines on Mastercard, a global leader in payments and technology, renowned for its innovative solutions and commitment to driving economic growth. Our team had the privilege of sitting down with Sandun Hapugoda, Mastercard’s Country Manager for Sri Lanka and Maldives, to delve into the company’s operations, its strategic initiatives, and its impactful contributions to the Maldivian market over the years.
Our news segments cover a broad range of industries and business sectors in the Maldives, including tourism, construction, banking, technology, trade, fisheries, and agriculture, among others.
We hope you find this edition informative and engaging. Happy reading!
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CORPORATE MALDIVES SPOTLIGHT: MASTERCARD
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GOVERNMENT & ECONOMY
TOURISM & AVIATION
TRANSPORT & CONSTRUCTION
HUMAN RESOURCES
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FOREIGN POLICY
BANKING & FINANCE
30 20 65 84 92
TRADE, FUEL & SHIPPING
74
ENVIRONMENT & CLIMATE CHANGE
CORPORATE MALDIVES SPOTLIGHT
Sandun Hapugoda has shaped Mastercard into a key player in the Maldivian payments landscape. With over seven years at the company, including his role as Country Manager for Sri Lanka and Maldives since November 2021, Sandun’s journey spans Head of Digital Payments (2017–2020) and Director (2020–2021) positions. Under his leadership, Mastercard drives innovation and financial inclusion across the archipelago.
His vision prioritises a digital-first Maldives, harnessing Mastercard’s global network to enhance payment experiences through mobile solutions and robust security. Sandun’s strategic collaborations with local banks and fintechs have bolstered the country’s digital shift, cementing Mastercard’s role in its economic growth. We spoke with him about his journey and Mastercard’s future plans.
COUNTRY MANAGER - SRI LANKA & MALDIVES, MASTERCARD
Could you tell us about Mastercard’s current role in the Maldives’ payment landscape?
Cash remains king in many parts of the Maldives. How is Mastercard driving the shift towards a cashless economy while aligning with the country’s growing digital transformation?
With growing competition from fintechs and local digital payment platforms, is Mastercard doing enough to stay ahead in the Maldivian market?
Mastercard plays a crucial role in the Maldives’ payment landscape by providing secure, efficient, and innovative payment solutions that cater to the needs of both businesses and consumers for over two and half decades. Our extensive network and cutting-edge technology facilitate seamless transactions across the archipelago, enhancing the overall payment experience. We are committed to supporting the country’s economic growth by driving financial inclusion and promoting digital payment adoption.
Mastercard is at the forefront of promoting a cashless economy in the Maldives by introducing convenient, secure, and accessible digital payment solutions. We actively collaborate with local banks, businesses, and government entities to raise awareness about the benefits of digital payments. Our initiatives include educational campaigns, merchant onboarding programs, and technology investments that align with the country’s digital transformation strategy. By offering tailored solutions that meet the specific needs of Maldivian consumers and businesses, we are gradually reducing the reliance on cash and fostering a thriving digital economy.
Additionally, Mastercard is focusing on growing a cashless economy in emerging areas such as transit, tax payments, B2B payments, and business-to-government (B2G) payments. By introducing innovative solutions that streamline the payment experience, we aim to make digital transactions more convenient and efficient. Furthermore, we are working on several promotions to incentivize customers, encouraging them to adopt digital payments instead of using cash.
Our approach is to collaborate with fintechs, telcos and other local digital payment platforms and provide Mastercard’s technology, services and advisory capabilities. That way, while we help them to go-to-market faster, we will also stay relevant by extending the ever evolving Mastercard technologies to these players.
Mastercard is continually innovating to stay ahead in the competitive Maldivian market. We leverage our global expertise and local insights to develop bespoke solutions that cater to the unique needs of the Maldives. Our partnerships with local fintechs and digital payment platforms enable us to offer a comprehensive suite of services that enhance customer experiences. By investing in advanced technologies, expanding our product offerings, and maintaining a customer-centric approach, we ensure that Mastercard remains the preferred choice for digital payments in the Maldives.
Mastercard plays a crucial role in the Maldives’ payment landscape by providing secure, efficient, and innovative payment solutions that cater to the needs of both businesses and consumers for over two and half decades.
Digital payment systems often face challenges related to infrastructure, connectivity, and accessibility, especially in remote islands. How is Mastercard addressing these barriers while ensuring financial inclusion reaches underserved populations?
Cybersecurity threats are evolving faster than solutions. How confident are you that Mastercard’s systems can withstand targeted attacks in a market like the Maldives?
The Maldives, with its relatively well-connected digital infrastructure, is poised to accelerate the growth of digital payments and the broader digital economy. The widespread availability of high-speed internet and the increasing penetration of mobile connectivity across even the most remote islands provide a strong foundation for the adoption of digital payment solutions. This connectivity enables seamless and secure transactions, fostering a cashless ecosystem that benefits consumers and businesses alike. Moreover, the integration of advanced technologies such as mobile wallets and contactless payments into the existing infrastructure further enhances the efficiency and convenience of digital transactions. By leveraging this well-established infrastructure, the Maldives can drive financial inclusion, stimulate economic growth, and position itself as a leader in the global digital economy.
Ensuring At Mastercard, cybersecurity is a top priority. We employ state-of-the-art technologies and robust security protocols to safeguard our payment systems against evolving threats. Our dedicated cybersecurity teams continuously monitor and mitigate risks, ensuring that our systems are resilient to targeted attacks.
Mastercard is also leveraging AI-based technologies to enhance the security and efficiency of its digital payment systems. By utilizing sophisticated algorithms, Mastercard can score each transaction in real-time, analyzing multiple data points such as location, amount, merchant details, and buyer behavior. This advanced technology enables us and our partners such as issuers and acquirers to detect and mitigate fraudulent activities swiftly, ensuring safe and reliable transactions for our customers.
In the Maldives, we collaborate with local stakeholders to enhance cybersecurity awareness and implement best practices. Our comprehensive approach to security gives us confidence that Mastercard’s systems can withstand potential threats and protect our customers’ data and transactions.
The Maldives has seen a significant rise in internet and mobile banking, with over 96% of registered users actively engaging. How is Mastercard aligning its strategies to further accelerate this digital shift?
How much of Mastercard’s innovation in the Maldives is tailored to the local market, and how much is influenced by global strategies?
Mastercard is aligned with the Maldives’ digital shift by focusing on mobile-first solutions and leveraging the growing adoption of internet and mobile banking. We collaborate with banks and fintechs to integrate our payment solutions with digital banking platforms, offering seamless and secure transactions for users. Our strategies include enhancing mobile payment options, investing in innovative technologies, and running awareness campaigns to promote digital banking. By staying attuned to the evolving digital landscape, Mastercard is well-positioned to support and accelerate the Maldives’ journey towards a cashless economy.
Mastercard is dedicated to advancing technology solutions such as digital-first issuance and tokenization to enhance the security and user experience of mobile-based payments. Digital-first issuance allows consumers to access and use their new cards instantly via mobile devices, eliminating the wait for physical cards and providing immediate access to funds. Tokenization replaces sensitive card information with unique tokens during transactions, significantly reducing the risk of fraud and data breaches. These innovations not only secure transactions and boost consumer confidence but also streamline the payment process, offering a seamless and efficient user experience. By integrating these advanced technologies, Mastercard is committed to fostering a secure, convenient, and user-friendly digital payment environment in the Maldives.
Mastercard’s innovation in the Maldives is a blend of global strategies and local customization. While we leverage our global expertise and technological advancements, we also take into account the unique needs and preferences of the Maldivian market. Our solutions are tailored to address local challenges and opportunities, ensuring relevance and effectiveness. By combining global best practices with local insights, we deliver innovative payment solutions that drive digital transformation and financial inclusion in the Maldives. Maldives passport card initiative and the implementation of electronic payments at Maldives transit are two great examples of how Mastercard could leverage global expertise and technologies to build a fully customized solution for Maldives which caters to local consumer, business and government requirements.
The Maldives, with its turquoise waters and pristine beaches, has long been a jewel in the crown of global tourism. Yet, its continued success relies heavily on forging connections between local stakeholders and the international travel industry. Enter Mastercard, a global powerhouse that has taken a handson approach to bolstering this vital sector. For the past two years, Mastercard has proudly served as the Title Partner for TTM Maldives, the nation’s leading travel trade show, and its commitment shows no sign of waning, with plans already in place to continue this role into TTM Maldives. This partnership underscores Mastercard’s dedication to driving tangible growth in the Maldivian tourism ecosystem.
TTM is more than just an event; it’s a bustling marketplace of ideas and opportunities, where international buyers, tour operators, and travel agencies meet Maldivian resorts, guesthouses, and tourism innovators. Mastercard’s involvement elevates this platform, injecting it with global credibility and reach. By aligning its brand with TTM, Mastercard facilitates meaningful business deals that translate into increased visitor numbers and revenue for the
Maldives. The company’s financial expertise and network also pave the way for smoother transactions and partnerships, ensuring that the event runs seamlessly for all involved.
What sets Mastercard apart is its long-term vision. This isn’t a oneoff sponsorship but a sustained effort to nurture an industry that employs thousands of Maldivians and contributes significantly to the national economy. By committing to TTM 2025, Mastercard signals its belief in the Maldives as a destination with untapped potential. For local businesses, this partnership offers a lifeline to global markets, while for international players, it’s a chance to tap into one of the world’s most idyllic holiday spots. As the Maldives continues to recover and grow in a post-pandemic world, Mastercard’s role as a steadfast ally in this journey is both timely and transformative.
In an increasingly competitive global tourism landscape, standing out is no small feat. Mastercard, however, has taken up the challenge with gusto, launching ambitious cross-border promotional campaigns to cement the Maldives’ status as a mustvisit destination. Targeting key source markets, these initiatives are a masterclass in strategic marketing, blending creativity with practicality to attract high-value travellers and boost direct spending in the Maldives.
Collaborating with tourism boards, airlines, and digital travel platforms, Mastercard has crafted campaigns that paint the Maldives as the ultimate luxury and adventure getaway. From serene overwater villas to adrenaline-pumping water sports, the messaging resonates with affluent globetrotters seeking something extraordinary. What’s more, these campaigns come with a clever twist: exclusive offers and privileges for Mastercard cardholders. Think discounted stays at top-tier resorts or cashback on bookings with partner airlines—perks designed to encourage tourists to open their wallets while exploring the Maldives’ wonders.
The impact is twofold. First, it drives footfall from markets like Europe, Asia, and the Middle East, where Mastercard wields significant influence. Second, it ensures that the Maldives isn’t just a bucket-list dream but a tangible, affordable reality for those wielding a Mastercard. By spotlighting the destination’s unique blend of relaxation and excitement, these campaigns have helped shift perceptions, positioning the Maldives as a year-round haven rather than a seasonal escape. For an economy heavily reliant on tourism, this sustained influx of visitors—and their spending power—is a game-changer. Mastercard’s savvy approach proves that when it comes to promoting paradise, a little ingenuity goes a long way.
For Mastercard, travel isn’t just about reaching a destination—it’s about the moments that linger long after the holiday ends. Through its ‘Priceless’ experiences platform, the company has reimagined what a trip to the Maldives can be, offering travellers a chance to step beyond the ordinary and into the extraordinary. Far from the typical resort holiday, these curated adventures tap into the soul of the Maldives, blending natural beauty, local culture, and a touch of exclusivity.
Imagine spending a night on an uninhabited island, surrounded by nothing but the sound of waves and a star-studded sky. Or picture yourself riding the swells of the Indian Ocean under the guidance of a Maldivian surfing legend, whose knowledge of the waves is as deep as the sea itself. For those drawn to the ocean’s mysteries, there’s deep-sea fishing, where traditional techniques meet the thrill of reeling in a marlin or tuna. These aren’t just activities— they’re stories to tell, crafted by Mastercard to showcase the Maldives’ rich heritage and untouched landscapes.
This initiative dovetails with Mastercard’s broader mission to amplify the Maldives’ global appeal, a commitment further evidenced by its role at ITB 2024. By securing a fireside chat for the Maldives Tourism Authority at the world’s largest travel trade show, Mastercard handed the nation a megaphone to tout its sustainability efforts and cultural depth. The result? A spotlight on a destination that offers more than postcard-perfect views. For travellers, these ‘Priceless’ experiences elevate a holiday into a personal journey; for the Maldives, they reinforce its allure as a place where luxury meets authenticity. Mastercard’s innovative approach is a reminder that the true value of travel lies in the memories it creates—and in the Maldives, those memories are nothing short of priceless.
For Mastercard, travel isn’t just about reaching a destination—it’s about the moments that linger long after the holiday ends.
Tourist ArrivalsMonthly Tourist Arrivals -
Share of Bed Capacity by Type
Tourist arrivals to the Maldives have continued their upward trajectory in early 2025, with the Ministry of Tourism reporting a total of 457,940 visitors by 4 March, marking a growth of 4.8% compared to the same period last year.
Although arrivals in February showed a slight decrease of 1.5% compared to February 2024, overall tourism numbers remain strong, supported by robust growth in January, which saw an 11.7% increase to 214,863 visitors. This growth momentum aligns with the government’s target of surpassing last year’s record-breaking total of over two million tourists.
China maintains its position as the leading tourist market so far this year, contributing 60,303 visitors and accounting for 13.2% of total arrivals. Russia and the United Kingdom are the next largest markets, providing 45,686 and 45,210 visitors respectively. Germany, traditionally a strong market, slipped to fourth place, recording 29,128 visitors, followed by Italy and India.
The bulk of tourists—approximately 69.1%—continue to favour resort stays, while guesthouses remain popular, attracting roughly 117,174 visitors, or about 25.6% of total arrivals. Hotels accounted for 2.8% and safari vessels made up the remainder, highlighting the diversified accommodation offerings that cater to different segments of travellers visiting the Maldives.
Currently, 1,144 establishments are operational, providing a total bed capacity of 62,725. Resorts dominate this capacity with nearly 70% of the available beds, while guesthouses represent about 21% of the total accommodation options.
The daily average of arrivals stood at 7,646 tourists in February, with the highest single-day count recorded on 16 February, when the country welcomed 9,518 tourists—marking a record high for 2025.
These figures indicate resilience in the Maldives tourism sector, which achieved a historic milestone last year by surpassing two million annual visitors for the first time. The government’s ambitious aim of increasing total arrivals by 15% this year, targeting higher revenue from the sector, aligns with ongoing investments in tourism infrastructure and the impending opening of the expanded terminal at Velana International Airport later in 2025.
Despite the slight fluctuations observed early this year, tourism remains robust, underlining the country’s continued popularity as a premier global travel destination.
Total Assets
Local Currency Financial Assets
Total Liabilities
Foreign Currency Financial Liabilities
Currency Financial Liabilities
Equity
Overall, MMA experienced a notable increase in foreign currency assets and liabilities, demonstrating strengthened foreign reserves and continued financial stability.
Inflation in the Maldives exhibited considerable fluctuations towards the end of 2024 and into early 2025. It stood at 1.1% in October, before sharply increasing to 4.1% in November. Inflation continued its upward trajectory, reaching 4.8% in December and peaking at 5.3% in January. This notable rise was primarily driven by escalating costs in food and utilities, underscoring the economy’s exposure to global price volatility.
Value in Millions - USD
Maldives experienced notable fluctuations in imports and exports towards the end of 2024. Imports amounted to USD 375.79 million in December, significantly up from USD 375.49 million in October, after briefly dipping to USD 304.49 million in November. Meanwhile, exports showed steady growth during this period, increasing from USD 24.99 million in October to USD 39.52 million in December. Despite this improvement, exports continued to lag significantly behind imports, reflecting persistent trade imbalances and underlying vulnerabilities in the country’s external trade.
Government revenue in the Maldives experienced notable growth at the start of 2025, driven largely by an increase in taxes from the tourism sector, according to the latest revenue series data.
The Maldives Inland Revenue Authority (MIRA) reported total revenue collection amounting to MVR 3.33 billion for January 2025, marking a significant rise compared to the MVR 1.88 billion collected in November 2024 and MVR 2.32 billion in December 2024.
The tourism sector continued to lead as the highest revenue contributor, with the Goods and Services Tax (GST) from the sector alone totalling over MVR 1.06 billion in January, a noticeable growth from MVR 961.39 million in December and MVR 733.12 million in November 2024.
Revenue from Corporate Income Tax also rose sharply to MVR 842.3 million, boosted by a substantial increase in Bank Profit Tax, which alone accounted for nearly MVR 153 million in January. Non-resident withholding tax revenue also surged significantly, hitting approximately MVR 139 million, up from around MVR 71.7 million the previous month.
However, revenue from expatriate quota fees declined, totalling around MVR 36 million in January, down from previous months. Similarly, lease period extension fees and income from expatriate quota fees also showed fluctuations.
The data highlights continued reliance on the tourism industry, which remains the primary contributor to the government’s revenue base. GST collected from tourism alone exceeded MVR 1 billion in January, reinforcing the sector’s role as a major economic driver for the Maldives.
These figures underline ongoing challenges in diversifying the nation’s revenue streams despite consistent growth in taxation from various corporate entities.
Significant Price Changes
The overall Consumer Price Index (CPI) for the Maldives increased by 0.33% in January 2025 compared to December 2024, lower than the 1.11% increase recorded the previous month. On a yearon-year basis, the CPI rose significantly by 5.33% from January 2024 to January 2025, indicating a continued inflationary trend.
Rose notably by 2.16% month-on-month, largely driven by higher prices for tuna (+9.47%), reef fish (+8.11%), onions (+9.73%), lime (+24.53%), mango (+13.70%), and tuna curry cuts (+24.92%). These increases were partially offset by falling prices of Githeyo Mirus (-14.04%), green chilli (-8.46%), and smoked fish (-1.77%).
Saw a sharp rise of 5.19%, primarily driven by reef fish (+8.11%) and tuna (+9.47%).
Increased significantly by 2.91%, driven by higher costs of lunch packs (+6.82%), noodles/pasta meals (+8.69%), buffet meals (+7.15%), and burgers (+7.91%).
Rose by 2.16%, mainly due to price increases in health insurance.
Increased by 0.36%, driven by barber services (+11.75%), although offset by reductions in soap (-3.05%) and deodorant (-2.38%).
Rose by 0.68%, notably driven by men’s underwear prices (+25.13%).
Experienced a notable decline of 1.87%, largely due to lower prices for mobile phones (-7.72%), tablets (-9.64%), and internet services (-0.25%).
Declined by 0.17%, driven mainly by a reduction in electricity prices (-1.74%), though offset somewhat by higher water prices (+2.20%).
Declined by 0.17%, driven mainly by a reduction in electricity prices (-1.74%), though offset somewhat by higher water prices (+2.20%).
Decreased by 3.55%, mainly driven by lower cigarette prices (-3.86%) and aracanut (-2.08%).
The CPI increased by 0.65%, notably driven by restaurants and accommodation services (+4.55%), reflecting higher prices for lunch packs, coffee, short eats, and pasta meals. Conversely, the information and communication sector saw a decline of 2.59%, driven by reduced prices for mobile phones (-10.40%) and tablets (-16.11%).
Experienced a slight decline in CPI by 0.13%, despite a significant increase of 2.71% in food and beverages, particularly reef fish (+11.00%) and onions (+18.10%). A notable decrease occurred in tobacco prices (-17.71%).
Overall, January 2025 saw continued inflation driven by essential categories such as food and restaurants, while information and communication prices offered some relief. Regional differences persisted, with Malé experiencing higher overall inflation compared to the Atolls, driven largely by rising food service costs.
Annual Government Debt Figures (2015–2025)
SOURCES: Data is compiled from official Maldivian government sources – primarily the MINISTRY OF FINANCE (Debt Management Department reports and Fiscal Strategy documents) and the MALDIVES MONETARY AUTHORITY (MMA) statistical database
The year 2024 marked a significant chapter for the Maldivian economy, with notable achievements in the tourism sector tempered by ongoing concerns about fiscal stability and external debt. While the Maldives further solidified its reputation as a premier global holiday destination, government authorities faced the dual challenge of implementing economic reforms and managing foreign currency inflows against a backdrop of credit rating downgrades. This review highlights the milestones that defined the economic landscape over the past year.
The Maldives welcomed its two millionth visitor on 26 December 2024, a historic milestone for the nation. Austrian national Astrid Dirnegger was honoured as the symbolic visitor, reflecting the tourism sector’s outstanding performance. Earlier in February, the country achieved its highest-ever monthly arrivals, with over 217,000 tourists, including a single-day record of 10,214 arrivals on 10 February.
To sustain growth, the Maldives Marketing and Public Relations Corporation (MMPRC) explored emerging source markets such as Azerbaijan, Georgia, and Bangladesh. Simultaneously, efforts were intensified to promote niche tourism segments, including sports, film, and medical tourism, aiming to diversify beyond the iconic luxury resorts.
Key tourism events defined the year, notably the “DATA 2024” conference, the largest of its kind in Southeast Asia, and the Visit Maldives Tourism Symposium 2024, which brought together industry leaders to discuss sustainability and diversification.
The Maldives welcomed its two millionth visitor on 26 December 2024, a historic milestone for the nation. Austrian national Astrid Dirnegger was honoured as the symbolic visitor, reflecting the tourism sector’s outstanding performance. Earlier in February, the country achieved its highest-ever monthly arrivals, with over 217,000 tourists, including a single-day record of 10,214 arrivals on 10 February.
Moody’s Downgrade to Caa2
Government’s Assurances
Fiscal Reforms on the Horizon
Despite buoyant tourism figures, fiscal challenges remained significant. In 2024, Moody’s Investors Service downgraded the Maldives’ long-term credit rating from Caa1 to Caa2, citing increased risks of default. Key concerns included declining foreign exchange reserves and substantial debt repayments due in 2025 and 2026, totalling over USD 600 million and USD 1 billion, respectively.
To sustain growth, the Maldives Marketing and Public Relations Corporation (MMPRC) explored emerging source markets such as Azerbaijan, Georgia, and Bangladesh. Simultaneously, efforts were intensified to promote niche tourism segments, including sports, film, and medical tourism, aiming to diversify beyond the iconic luxury resorts.
On 3 December 2024, following the downgrade, the Ministry of Finance reiterated its commitment to addressing fiscal vulnerabilities. Proposed measures included tightening foreign currency regulations, introducing new tax measures to boost reserves, and reducing government expenditure, including subsidies. These reforms are seen as critical to achieving long-term financial stability.
Foreign Currency Act
Higher Tourism and Departure Taxes
In December 2024, President Dr Mohamed Muizzu ratified the Foreign Currency Act, which took effect on 1 January 2025. This legislation requires a portion of foreign currency earnings from sectors such as tourism to be deposited into local bank accounts within three months of each transaction. Obligations vary, with resorts required to convert USD 500 per tourist per month and high-revenue entities subject to a 20% conversion requirement. The Act aims to strengthen foreign currency reserves and reduce outflows.
Amendments to tourism-related taxes and fees marked another significant development. From 1 July 2025, the Tourism Goods and Services Tax (TGST) will increase from 16% to 17%. Green Tax rates will be adjusted from January 2025, while airport departure taxes and development fees will rise significantly from 1 December 2024, particularly for premium travellers. These measures are expected to generate additional revenue to address the budget deficit.
56.6 Billion Plan
and Development Concerns
Illegal Immigration A Transformative but Testing Year
The Maldivian Parliament approved a state budget of MVR 56.6 billion for 2025 in December. While government officials argued that a flexible budget would accelerate development projects, critics, including the opposition Maldivian Democratic Party (MDP), raised concerns over transparency, particularly the absence of detailed project allocations.
Public debt remained a pressing issue, standing at USD 8.2 billion (116% of GDP) in early 2024 and rose further. Officials maintain that structural reforms, such as subsidy realignments and potential state-owned enterprise restructuring, will help ease debt servicing pressures.
Although not strictly an economic initiative, the government’s crackdown on illegal immigration through “Operation Kurangi” had indirect economic implications, particularly for labour-dependent sectors. Maldives Immigration deported 5,000 undocumented expatriates and tracked 10,000 others. Enhanced systems, including biometrics and the public “Immigration Watch” platform, were introduced to improve oversight.
The year 2024 was marked by contrasting narratives for the Maldivian economy. On one hand, record-breaking tourist arrivals and global recognition reflected the nation’s ongoing success as a premier destination. On the other, mounting external debt and credit rating downgrades underscored the need for structural reforms.
As the Maldives heads into 2025, it faces the challenge of sustaining economic growth while implementing key reforms to strengthen fiscal resilience. With new tax measures coming into effect and sizeable debt repayments looming, the balance between development and stability will define the coming year.
The International Monetary Fund (IMF) has concluded its 2025 Article IV Mission to the Maldives, issuing a report on 18 February 2025 that highlights economic growth projections while warning of widening macroeconomic imbalances. The IMF mission, led by Piyaporn Sodsriwiboon, engaged with Maldivian authorities from 3 to 16 February 2025, discussing the country’s economic outlook and key policy priorities.
According to the report, the Maldives’ real GDP is expected to grow by 5 percent in 2025, largely driven by robust tourism activity. The opening of the expanded Velana International Airport terminal is expected to ease supply-side constraints in the tourism sector and support continued economic momentum. However, inflation is projected to rise to 2.3 percent, influenced by higher import duties.
Despite these positive indicators, the IMF warns that the country’s fiscal and external vulnerabilities remain significant. The Maldives faces a persistently large current account deficit and ongoing pressures on foreign exchange reserves, necessitating urgent
policy adjustments. The report calls for broad-based fiscal reforms and a comprehensive debt strategy to restore economic stability.
The IMF acknowledged the Maldivian government’s homegrown fiscal reform agenda, which includes the discontinuation of Maldives Monetary Authority (MMA) advances, the passage of the Fiscal Responsibility Act, and the Public Debt Management Act. However, the report stresses that swift implementation of expenditure reforms outlined in the 2025 Budget is crucial to reducing economic imbalances.
The IMF recommends urgent and stronger fiscal consolidation, including holistic expenditure rationalisation to curb excessive government spending while ensuring the protection of social welfare programmes. The mission also called for subsidy reforms, advocating for the phasing out of untargeted subsidies and the introduction of well-targeted direct income transfers to vulnerable households.
Additionally, the IMF urged the government to reprioritise public sector investment programmes (PSIP) to address immediate fiscal challenges. The report emphasised the need to continue state-owned enterprise (SOE) reforms and Aasandha healthcare reforms, while strengthening the public financial framework to enhance policy credibility and effectiveness.
From a monetary policy perspective, the IMF welcomed the MMA’s commitment to resuming active monetary operations, urging coordinated policy tightening to address macroeconomic vulnerabilities. Should inflationary or external pressures increase, the IMF suggests that the MMA be prepared to further tighten monetary policy. The report also highlighted heightened systemic risks from the banking sector’s exposure to government debt, recommending stricter macroprudential policies and vigilant financial sector oversight.
Given the Maldives’ high vulnerability to climate change, the IMF stressed the importance of integrating climate sensitivity into public financial and investment management strategies to
mobilise additional climate finance. The mission also called for structural reforms to improve the business climate, expand trade and investment, and enhance skill development, ensuring longterm sustainable and inclusive growth.
The IMF team expressed gratitude to Maldivian authorities for their hospitality and held discussions with Finance Minister Mohamed Zameer, MMA Governor Ali Munawar, and senior government officials, alongside representatives from the private sector and development partners.
The Maldivian government has merged the Ministry of Climate Change, Environment and Energy with the Ministry of Tourism, forming the Ministry of Tourism and Environment. The change was made under President Mohamed Muizzu’s authority, as provided in Article 116(a) of the Constitution, and was officially announced by the President’s Office through a directive.
Alongside this restructuring, Thoriq Ibrahim has been appointed as the Minister of Tourism and Environment, following the dismissal of the former Minister of Tourism, Ibrahim Faisal.
As part of the merger, key regulatory bodies that were previously under the now-dissolved Ministry of Climate Change, Environment and Energy have been placed under the Ministry of Tourism and Environment. These include:
• Environmental Protection Agency (EPA)
• Utility Regulatory Authority
• Maldives Meteorological Service
• Biosphere Reserve Office
This means that regulatory functions related to environmental protection, climate change, water, sanitation, waste management, energy, and biodiversity conservation will now be handled under the same ministry that oversees tourism.
Following his appointment, Minister Thoriq Ibrahim expressed his commitment to strengthening both the tourism and environment sectors. He stated that his aim is to make Maldives’ tourism industry a sector of national pride while ensuring that environmental initiatives continue to grow.
“The sectors under the former Ministry of Environment will also be further strengthened. The combination of these two sectors will allow us to achieve important goals. I will work with the aim of ensuring that tourism and the environment are sectors that bring pride,” Minister Thoriq said.
He also pledged to bring growth and improvement to both areas, highlighting the potential benefits of a more integrated approach between tourism and environmental sustainability.
The Ministry of Tourism and Environment will now handle responsibilities that were previously divided between two separate ministries. While the directive states that ongoing efforts in climate change mitigation, waste management, and energy policy will continue, the structural shift raises questions about how environmental oversight will function alongside tourism development.
Additionally, the ministry’s official correspondence will now use the number 88.
With the restructuring now in effect, how the combined ministry will manage its expanded portfolio under Minister Thoriq Ibrahim’s leadership remains to be seen.
The Maldives Inland Revenue Authority (MIRA) has announced an increase in the Tourism Goods and Services Tax (TGST) rate from 16% to 17%, effective 1 July 2025. The adjustment, part of the 7th amendment to the Goods and Services Tax Act, aims to strengthen fiscal policy within the tourism sector, which is a cornerstone of the Maldivian economy.
Starting 1 July 2025, the 17% TGST rate will apply to all transactions where the “time of supply” occurs on or after this date. The “time of supply” is determined by the earlier of the date a tax invoice is issued or the date payment is received for the supply of goods or services. This distinction ensures clarity in cases where bookings or payments are made before the rate adjustment.
MIRA has outlined that businesses in the tourism sector, including resorts, guesthouses, restaurants, spas, and dive schools, must begin charging the new TGST rate as applicable. Businesses operating round-the-clock must implement the new rate from midnight on 1 July 2025, while others can begin applying it from their first operational hour on the same day.
Additionally, businesses are required to update their systems, such as point-ofsale (POS) systems, reservation platforms, and billing mechanisms, by 1 July to ensure smooth compliance with the new rate. Prices for tourism-related goods and services must reflect the revised TGST rate.
MIRA has provided detailed examples to clarify how the “time of supply” principle applies to transitional transactions around the rate change. For instance:
• If a guest books and pays for their stay before 1 July 2025, the 16% TGST rate applies, even if the stay occurs after the rate increase.
• Conversely, if payment or invoicing occurs on or after 1 July, the new 17% rate will be applied, regardless of when the service is delivered.
Preparing for Compliance
MIRA has advised businesses to make immediate preparations to ensure compliance with the updated tax rate. Failure to adhere to the revised guidelines could lead to penalties and disrupt operations in the Maldives’ highly competitive tourism industry.
The TGST rate adjustment reflects the government’s broader objectives to enhance revenue collection while maintaining transparency and consistency in the tax system. The Maldives continues to rely on its tourism sector as a vital economic driver, and the effective implementation of these changes will be key to sustaining growth and maintaining international competitiveness.
GOVERMENT & ECONOMY
As of 1 January 2025, the regulatory changes introduced under the Companies Act (Law Number: 7/2023) are now fully in effect across the Maldives. The Act, along with the Private Companies Regulation (Regulation Number: 2024/R-99), has introduced significant compliance obligations for companies operating in the country. Businesses were granted a one-year transitional period to align themselves with the new framework, which officially concluded on 31 December 2024.
With the conclusion of the transitional period, companies are now required to meet several important obligations to remain compliant with the Companies Act:
Companies must update their constitutions in line with the Act. This can be achieved by adopting the Model Articles of Association or drafting customised articles. Additionally, companies are required to submit a Compliance Statement, as outlined in Schedule 5 of the Private Companies Regulation.
Private companies are now mandated to appoint Maldivians as directors on their boards, in accordance with Section 115 of the Act. The only exception applies to foreign investment companies. Private companies with 100% local shareholding but foreign directors must ensure compliance by appointing Maldivian directors. Companies that previously relied on foreign directors are encouraged to explore alternative arrangements to maintain their strategic direction while adhering to the new requirements.
Re-registered companies must meet all obligations under the Companies Act and the Foreign Companies Registration Regulation. This includes appointing a local agent, as stipulated by the regulations.
The new Companies Act aims to enhance corporate governance and align business practices in the Maldives with international standards. However, the implementation of these requirements marks a significant shift, particularly for companies that previously relied on foreign directors or operated under outdated constitutions. Businesses must now ensure their operations fully comply with the new framework to avoid penalties or disruptions.
On 26 February 2025, the Maldives witnessed a seismic shift in its democratic framework. The ruling People’s National Congress (PNC), leveraging its parliamentary supermajority, forced through amendments to the Judicature Act, reducing the Supreme Court bench from seven to five justices. This move, executed with dizzying speed and scant regard for dissent, has sparked a firestorm of criticism from opposition parties, legal scholars, and the Bar Council, who decry it as a brazen assault on judicial independence. Timed suspiciously ahead of a critical Supreme Court hearing on anti-defection clauses introduced in November 2024, the legislation, coupled with the sudden suspension of three justices, raises profound questions about the separation of powers, the dangers of absolute power, and the implications for a young democracy like the Maldives, with parallels to other nations’ struggles.
Absolute Power and Lord Acton’s Warning
The separation of powers, dividing governance into legislative, executive, and judicial branches, is a cornerstone of democratic systems worldwide. Enshrined in the Maldives’ 2008 Constitution, this principle ensures that no single entity monopolises authority, safeguarding against tyranny and preserving the rule of law. The judiciary, as an independent arbiter, plays a pivotal role in checking legislative and executive overreach, interpreting laws, and protecting constitutional rights.
Yet, the events of February 2025 reveal a troubling erosion of this balance. The PNC’s supermajority, wielded under the direction of President Dr. Mohamed Muizzu, has blurred the lines between legislative and executive power, effectively transforming Parliament into a tool of the presidency. The swift passage of the Judicature Act amendments, followed by the Judicial Service Commission’s (JSC) suspension of Justices Husnu Al-Suood, Dr. Azmiralda Zahir, and Mahaz Ali Zahir, ostensibly due to an Anti-Corruption Commission (ACC) investigation, suggests a coordinated effort to neuter the judiciary. This convergence of power threatens the very foundation of Maldivian democracy, a system still in its adolescence, having emerged from decades of autocratic rule only in 2008.
The 19th-century historian Lord Acton famously observed, “Power tends to corrupt, and absolute power corrupts absolutely.” This axiom encapsulates the human tendency to abuse unchecked authority, a peril magnified in systems lacking robust institutional checks. For Acton, absolute power not only distorts the moral compass of those who wield it but also undermines the public good, as self-interest supplants accountability.
In the Maldives, this warning resonates with chilling clarity. The PNC’s actions, ramming through legislation despite objections from the Maldivian Democratic Party (MDP), expelling dissenting MPs from the chamber, and overriding the counsel general’s concerns, demonstrate a concentration of power that brooks no opposition. The retroactive provision in the Judicature Act, mandating the JSC to deem two justices “incompetent” within five days, flouts due process and constitutional norms, as highlighted by the Bar Council’s citation of violations to Articles 148, 149, and 154. The subsequent suspension of three justices, conveniently timed to derail a Supreme Court challenge to the anti-defection laws, further fuels allegations of executive manipulation of judicial processes.
For a fragile democracy like the Maldives, Lord Acton’s caution is not merely theoretical. The consolidation of power under President Muizzu’s administration risks entrenching a system where dissent is stifled, institutions are hollowed out, and the will of the people is subverted. This pattern is not unique to the
Maldives, Türkiye under Recep Tayyip Erdoğan offers a stark comparison. Since 2016, Erdoğan’s government has purged thousands of judges and prosecutors, replacing them with loyalists, effectively subordinating the judiciary to executive will. Similarly, Hungary’s Viktor Orbán has used parliamentary supermajorities to amend the constitution and pack courts, eroding democratic checks. These cases illustrate how absolute power, once consolidated, can dismantle democratic norms, a trajectory the Maldives risks following.
The implications of this power grab extend far beyond the courtroom or parliamentary chamber. For a nation striving to solidify its democratic credentials, the undermining of judicial independence and separation of powers could stall progress across multiple fronts, with lessons from other democracies underscoring the stakes.
Domestic Progress: A judiciary stripped of autonomy cannot effectively uphold constitutional rights or check executive excesses. The anti-defection clauses, which the Supreme Court was poised to review, illustrate this danger. By empowering parties to unseat MPs at will, these provisions stifle political pluralism and entrench party loyalty over public interest, contrary to Article 75 of the Constitution, as noted by dissenting PNC MP Ahmed Azaan Marzooq. Without a robust judiciary to adjudicate such disputes, democratic discourse risks being replaced by authoritarian fiat, alienating citizens and weakening trust in governance. Poland’s experience under the Law and Justice Party (PiS) mirrors this: since 2015, PiS has undermined judicial independence, triggering mass protests and a crisis of legitimacy that has fractured national unity.
Economic Consequences: The Maldives’ economy, heavily reliant on tourism and foreign investment, thrives on stability and the rule of law. Investors seek predictable legal frameworks and impartial dispute resolution, qualities jeopardised by a compromised judiciary. The 2014 reduction of the Supreme Court bench under President Abdulla Yameen coincided with economic turbulence and international censure, a precedent that looms large today. If perceptions of instability grow, tourist arrivals, accounting for over 60% of GDP, could falter, and foreign capital may retreat, stunting development in a nation already grappling with climate vulnerabilities and debt. Venezuela’s economic collapse under Nicolás Maduro, accelerated by the erosion of judicial and legislative checks, serves as a grim warning: political instability can devastate even resource-rich economies.
International Standing: The Maldives has cultivated an image as a progressive small-island state, championing climate action and democratic reform on the global stage. Yet, the events of February 2025 undermine this narrative. The international community, including bodies like the United Nations and Commonwealth, has historically scrutinised democratic regressions in the Maldives, as seen during Yameen’s tenure. The Bar Council’s plea to President Muizzu to reject the bill aligns with concerns from 71 lawyers who petitioned Parliament, signalling a domestic consensus that could amplify global pressure. Should the Maldives slide into democratic backsliding, it risks diplomatic isolation, sanctions, or diminished credibility in forums like the UNRC, where it has sought to lead. South Africa’s post-apartheid journey offers a counterpoint: its Constitutional Court’s independence has bolstered its global reputation, even amidst political turbulence, a model the Maldives could emulate.
The Maldives is no stranger to the perils of concentrated power. The 2014 bench reduction under Yameen, reversed in 2019 under Ibrahim Mohamed Solih, offers a cautionary tale: short-term political gains can exact long-term costs. Today’s crisis echoes that episode but with greater stakes, given the timing of the anti-defection case and the PNC’s supermajority. Former MP Ali Hussain, who filed the constitutional challenge, alleges that the ACC investigation into the justices was “manufactured,” a claim that, if substantiated, would expose a deliberate subversion of justice.
For the Maldives to avert Lord Acton’s prophecy, it must reinforce its democratic guardrails. The Bar Council’s call for President Muizzu to return the bill to Parliament for revision offers a lifeline, as does the resilience of civil society and opposition voices. Judicial independence must be restored, potentially through constitutional amendments clarifying the JSC’s autonomy and impeachment processes. Internationally, the Maldives could seek technical assistance from democratic partners, much as Botswana has done to strengthen its judiciary, signalling a commitment to reform.
The Maldives stands at a precipice. The PNC’s push to shrink the Supreme Court and silence judicial oversight exemplifies the seductive allure of absolute power— and its corrosive potential. Lord Acton’s words serve as both a diagnosis and a warning: unchecked authority invites corruption, and in a young democracy, the fallout can be existential. The progress of the past 17 years, economic growth, democratic maturation, and global engagement—hangs in the balance. Whether the Maldives heeds the lessons of Turkey, Hungary, and others or charts a course toward resilience like South Africa, will shape its destiny for its people and the watching world. The clock is ticking on this fragile democracy’s survival.
GOVERMENT & ECONOMY
In a significant shift in public finance regulations, the Maldives government has introduced changes that will allow certain government projects to bypass the competitive bidding process for the next two years. This means contracts for essential services and security-related projects can now be awarded directly, without inviting multiple suppliers to compete for the contract. While this move aims to improve efficiency, it raises concerns about transparency and accountability.
For policymakers, the argument for relaxing procurement rules is straightforward: speed. Large-scale infrastructure projects, security upgrades, or essential services often face frustrating delays under conventional bidding processes. In theory, allowing direct contracts streamlines these efforts, enabling urgent projects to move forward without bureaucratic bottlenecks.
Imagine a scenario where a remote island urgently requires new water pipelines to prevent a public health crisis. Under the old system, the project would be bogged down by tender announcements, proposal deadlines, and selection processes — steps designed to promote fairness but often at the cost of time. By giving ministries the power to bypass these steps for essential projects, the government believes it can respond faster to urgent needs.
In sectors like healthcare, transportation, and security, where delays can have immediate social consequences, there’s a strong case to be made for flexibility. For instance, should a security breach require immediate installation of surveillance systems or if an urgent medical supply chain needs to be secured, bureaucratic red tape can slow down critical responses. The new regulation allows decision-makers to act faster in moments when speed is key.
Furthermore, the government’s ability to exempt certain projects from financial requirements like bid security and performance guarantees could enable smaller companies — particularly local businesses — to participate in government projects without facing high entry barriers. In a country where SMEs are vital to the economy, reducing these financial hurdles could create new opportunities for local entrepreneurs.
Yet there’s an undeniable risk that comes with deregulation, particularly in the context of public finance. The very reason bidding rules were tightened in 2019 was to reduce corruption risks — especially in projects funded by foreign aid or concessional loans. By relaxing these safeguards, the government risks reversing those gains.
Without a competitive bidding process, the risk of cronyism, favouritism, or inflated costs increases. The absence of financial guarantees — such as performance bonds — adds to these risks, as there’s less financial security to ensure projects are completed as promised.
Historically, direct contract awards have proven to be fertile ground for inefficiency and corruption in many countries. The risk isn’t merely theoretical — past incidents in the Maldives have shown how unchecked spending in infrastructure projects can spiral into costly failures. The success of this policy shift will depend heavily on how well ministries enforce internal oversight and accountability.
The Ministry of Finance’s role in reviewing and approving proposals provides some safeguard, but its effectiveness will ultimately rely on clear and consistent criteria. The absence of transparent bidding could erode public trust if contracts appear to favour politically connected firms or if project outcomes fall short of expectations.
The challenge for policymakers now is balancing speed with accountability. Accelerating essential projects can undoubtedly deliver benefits, especially in sectors like healthcare, security, and infrastructure. But without strong oversight mechanisms, this change could leave the door open for mismanagement.
To ensure this deregulation delivers its intended benefits, the government will need to demonstrate that ministries are actively monitoring progress and enforcing financial discipline. Reporting requirements — which mandate ministries to submit updates on project progress to the finance ministry — are an important first step, but they may need to go further. Public disclosures, thirdparty audits, or stricter penalties for mismanaged funds could help ensure accountability in the absence of a competitive bidding process.
Deregulation is rarely a simple fix; it can accelerate progress, but only when paired with robust oversight. As the Maldives embraces this shift, the challenge will be to fast-track projects without compromising the trust of the public.
The role of the police and military is simple in theory. The police enforce the law, the military safeguards national security, and the government ensures that these institutions are funded and supported. Yet, in the Maldives and elsewhere, these fundamental duties have taken a back seat as law enforcement agencies morph into business entities—running property developments, trading goods, and even competing with private sector enterprises.
The revelations of financial mismanagement and corruption tied to the Police Cooperative Society (Polco) are just the latest examples of why security forces should never be in the business of business. The recently published audit report on the police housing project details an alarming pattern of inflated costs, questionable contracts, and incomplete work that has dragged on for more than a decade. What was meant to provide affordable housing for officers instead became a cash sink, with over MVR 1 billion spent and a loss of MVR 354.7 million incurred.
It is not just about the money. When government institutions, particularly those in law enforcement, step into the private sector, the implications go far beyond financial mismanagement. They distort competition, discourage private investment, and introduce conflicts of interest that erode public trust.
This is not a problem unique to the Maldives. Across the world, in economies that respect the principles of free markets, security forces do not build apartments, run catering services, or manage business portfolios. They are funded by the state, not by profits. When public institutions enter the market, they do so with an unfair advantage—access to government resources, regulatory influence, and a level of authority no private business can match. The result is an economic playing field tilted in their favour, pushing out competitors and reducing market efficiency.
The argument for such ventures often hinges on welfare—providing additional income and benefits for police officers and soldiers. But there are better ways to support them. In countries with strong governance frameworks, welfare for security personnel comes from well-structured state policies, not profit-driven enterprises.
The United Kingdom, for instance, ensures police officers have access to government-funded housing support without involving police-run corporations. In Germany, military cooperatives exist, but they do not engage in commercial competition, limiting their role to internal support services. The contrast is stark: in free-market economies, security agencies do not operate businesses that compete with the private sector.
Polco’s downfall follows a familiar pattern. It was never meant to be a property developer, yet it took on a multi-million-dollar project despite having no expertise in large-scale construction. The results were disastrous. The project was handed from one contractor to another, draining more funds with each transfer.
Noomadi Resorts and Residences, the first contractor, was dismissed after years of delays. The second, Island Expert, turned out to have links to Noomadi’s shareholders, resulting in yet another cycle of failed delivery and financial mismanagement. Even subcontracted tasks, such as lift and CCTV installations, ended up benefiting individuals tied to the same network.
The irony is inescapable. The police, whose role is to prevent crime, have become central players in a case that reeks of corruption and corporate misconduct. The audit report does not name names, but it does not have to. The threads all trace back to a handful of individuals who controlled multiple companies involved in the project, pocketing profits while the government continued to bleed funds into an unfinished development.
Meanwhile, the public watches as their tax money is funnelled into ventures that serve neither the economy nor the citizens. There is now growing public outcry, with demands for Polco and its military counterpart, Sifco, to be dissolved. People are asking the fundamental question: why should the police and military be running businesses at all? These are institutions that already receive the largest share of the national budget. If that is not enough to sustain their operations and welfare needs, the solution is not to compete in the market but to reassess how those funds are allocated.
This is where the conversation should shift—from policing the streets to policing accountability. If the state insists on housing schemes or other welfare initiatives for police and military personnel, these should be managed transparently, either through government-backed housing policies or partnerships with private firms under competitive bidding processes. The current model, where security agencies themselves act as business players, is a system ripe for abuse.
The Bigger Danger
It is not difficult to see where this road leads. The more state institutions entangle themselves in business, the more blurred the lines become between governance and enterprise. And when those in power control both the regulatory framework and the businesses operating within it, corruption is not a possibility—it is an inevitability.
The lesson from Polco’s controversial housing project is clear: security forces should not be in business. Their mandate is to protect the people, not to engage in corporate ventures that distort the market and open the door to financial scandals. The market should be left to private entrepreneurs, while government agencies focus on their core responsibilities. Anything else is a recipe for economic inefficiency, public mistrust, and a system where those in uniform wield influence far beyond what they were ever meant to have.
The Maldives has achieved a significant milestone in its tourism sector, reaching 2 million tourist arrivals in 2024, a record that illustrates the nation’s appeal as a top-tier destination. However, as the tourism industry celebrates this achievement, critical questions arise about whether arrival numbers alone should define success. With an average occupancy rate of just 58.9% for 2024 and average stays showing only marginal improvement, a deeper analysis suggests alternative metrics like bed occupancy rates and the average duration of stays may provide a more holistic view of the sector’s health.
While tourist arrivals make for compelling headlines, they don’t paint the complete picture. The Maldives’ average occupancy rate for resorts increased slightly to 70.4% in 2024 from 66.6% in the previous year. However, this figure still leaves significant capacity unused. Similarly, the average duration of stays, while showing a slight uptick to 7.7 days compared to 2023, has not significantly improved, raising questions about the spending power and overall contribution of short-stay tourists.
This raises the argument that reliance on arrival numbers as a success metric might overshadow more telling indicators like revenue per available room (RevPAR), average daily rate (ADR), and the sustainability of tourism infrastructure. Countries such as New Zealand and Bhutan have pivoted towards metrics focused on high-value, low-impact tourism. Bhutan, for instance, limits tourist numbers with high daily fees to focus on sustainability, while New Zealand prioritises tourists’ contributions to local economie
The Maldives’ tourism success has historically relied on highend luxury resorts, which account for over 67% of the nation’s operational bed capacity. Yet, occupancy rates in guesthouses and hotels lag significantly, indicating a disproportionate reliance on resorts. Furthermore, the average occupancy rate of guesthouses dropped from 41.4% to 36.1% in 2024, suggesting that the lowertier market struggles to keep pace with the luxury sector.
Neighbouring countries like Thailand, which also cater to a mix of luxury and budget travellers, use average tourist spending as a key performance indicator. This approach provides a clearer picture of tourism’s economic benefits and highlights areas for improvement.
The emphasis on arrival numbers also raises concerns about sustainability. The Maldives has seen increasing strain on its fragile ecosystems, particularly coral reefs and marine life, which serve as the backbone of its tourism appeal. Without aligning growth with sustainability, the long-term viability of the sector remains uncertain. The Maldives has taken steps to mitigate this by
increasing eco-friendly offerings, but further emphasis on quality over quantity could enhance both environmental preservation and economic resilience.
As the Maldives celebrates its achievement, a recalibration of its tourism metrics could pave the way for more sustainable growth. Policymakers may consider leveraging tools like dynamic pricing to optimise occupancy rates or developing strategies to boost the average duration of stays. This would not only maximise the economic contribution of each tourist but also alleviate some of the pressures on the environment.
Ultimately, the achievement of 2 million arrivals is a testament to the Maldives’ enduring allure, but the path forward demands a broader lens, one that views tourism success not just through the volume of arrivals but through the value it generates for both the economy and the environment.
The Maldives remains one of the most sought-after destinations globally, celebrated for its unparalleled natural beauty, luxury resorts, and vibrant marine life. As we approach 2025, the Maldivian tourism sector is evolving to meet changing traveller preferences and economic opportunities. Here are the key trends set to define the industry in the coming year.
With global awareness of environmental issues on the rise, sustainable tourism is becoming a top priority. Resorts across the Maldives are increasingly adopting eco-friendly practices such as renewable energy use, waste management initiatives, and marine conservation programmes. Given the nation’s vulnerability to climate change, these efforts resonate deeply with both the global community and eco-conscious travellers.
Sustainability is also being woven into guest experiences, with many resorts offering activities like coral planting and educational marine safaris, ensuring visitors contribute to conservation efforts during their stay.
Wellness tourism is gaining momentum as travellers prioritise health and well-being during their holidays. Maldivian resorts are responding with offerings that include yoga retreats, spa therapies, and comprehensive wellness programmes. Unique offerings such as hydrotherapy circuits, mindfulness workshops, and sleepfocused retreats are designed to cater to the rising demand for mental and physical rejuvenation.
This focus on wellness not only enhances the Maldives’ appeal to high-end tourists but also aligns with global trends favouring holistic travel experiences.
The Maldives is set to welcome several new luxury resorts in 2025, further cementing its reputation as a premier destination for highend travellers. Notable openings include the Mandarin Oriental Bolidhuffaru Reef in South Malé Atoll and Ananea Madivaru Maldives in North Ari Atoll. These properties are expected to elevate the standard of luxury with exclusive overwater villas, private pools, and bespoke experiences.
With these developments, the Maldivian tourism sector continues to strengthen its position as a leader in luxury hospitality, offering discerning travellers new levels of indulgence and exclusivity.
As the Maldivian government targets 2.4 million tourist arrivals in 2025, infrastructure development has become a priority. The expansion of Velana International Airport includes a new terminal and additional seaplane facilities to accommodate the anticipated surge in visitors.
These investments not only aim to improve accessibility but also enhance the overall travel experience, ensuring the Maldives remains competitive as a global tourism destination.
The Maldives is diversifying its tourism portfolio to attract a wider range of visitors. Beyond its iconic beaches, the nation is exploring opportunities in cultural tourism, adventure activities, and niche markets such as fitness tourism.
For example, sports tourism is gaining traction with an increasing number of resorts offering athletic training programmes and water sports experiences. Similarly, silent retreats and sleep therapy holidays are being introduced to cater to the growing wellness tourism segment.
The Maldivian tourism industry is poised for a transformative year in 2025. With a focus on sustainability, wellness, luxury, and diversification, the nation continues to adapt to the needs of modern travellers while safeguarding its natural and cultural heritage. These trends not only reflect the Maldives’ commitment to innovation but also its dedication to remaining a global leader in tourism excellence.
Current Employment Trends and Regulatory Challenges
The Maldivian hospitality industry remains one of the largest employers in the country, yet systemic biases continue to limit the representation of Maldivians in senior management roles. Despite regulatory changes aimed at increasing local employment, data from the latest census and industry reports indicate that these efforts have fallen short. With a growing reliance on expatriate workers, particularly in managerial positions, concerns about unconscious bias and structural barriers persist.
According to the latest resort census, expatriate workers continue to dominate the industry. While some progress has been made in ensuring Maldivians are given opportunities in key roles, the percentage of Maldivians in senior management remains below the mandated 60% threshold in many resorts. HR compliance data collected from various resorts in early 2025 shows that a significant number still fall short of meeting this requirement, raising questions about enforcement and accountability.
The Eighth Amendment to the Employment Act introduced several provisions aimed at improving local workforce participation, including mandatory skill development programmes, structured career progression plans, and revised regulations on expatriate hiring. However, implementation gaps remain. The requirement that the most senior HR official be Maldivian in workplaces with over 50 employees is frequently circumvented, either through role reclassification or the hiring of foreign consultants who effectively oversee HR functions.
Industry specialists acknowledge that systemic implicit bias continues to shape hiring decisions. While companies publicly commit to localisation efforts, internal hiring practices often favour foreign candidates. This is attributed to several factors, including a long-standing preference for expatriate expertise, entrenched hiring networks, and perceptions about the capabilities of local employees.
Moreover, data indicates that Maldivians seeking employment in the hospitality sector face structural disadvantages. Many report difficulty in securing managerial positions despite relevant qualifications, while others highlight disparities in pay and promotion opportunities compared to expatriate colleagues. The perception that foreign professionals are more capable or more suited to leadership roles continues to influence hiring and workplace dynamics.
The Maldivian economy relies heavily on foreign labour. Census data reveals that for every four members of the local population, there is one expatriate worker. While expatriate workers play a key role in sustaining the industry, particularly in specialist roles where local expertise is lacking, their dominance in senior positions has implications for economic sustainability.
Excessive reliance on foreign labour contributes to capital outflow, with a significant portion of salaries remitted overseas. At the same time, low local workforce participation in certain segments of the industry leads to higher unemployment and underemployment among Maldivians. The situation is further exacerbated by an increasing number of young graduates entering the job market with limited access to meaningful career opportunities in tourism.
To achieve meaningful localisation, policy enforcement must be strengthened. The Labour Relations Authority, which oversees compliance with employment regulations, has the power to impose fines for non-compliance with local workforce quotas. However, enforcement has been inconsistent, with many resorts continuing to operate without penalties despite clear breaches of employment law.
More structured vocational training and career development initiatives tailored to the industry are also needed. While the government has introduced training programmes, these efforts must be aligned with the specific needs of resorts to ensure a seamless transition from training to employment.
Additionally, changing industry perceptions requires a cultural shift. Hospitality leaders must be held accountable for fostering inclusive workplaces that prioritise Maldivian talent, not just as an obligation but as a strategic imperative. This involves mentorship, clear promotion pathways, and fair compensation structures to attract and retain local professionals.
The Maldivian hospitality industry stands at a crossroads. Without targeted reforms, the systemic biases that hinder local employment will persist, exacerbating inequality and limiting the sector’s potential for sustainable growth. The challenge now is not only to set regulations but to ensure they are enforced, creating an industry where Maldivians can compete on an equal footing.
The Maldives’ wellness economy has emerged as a remarkable growth story, reflecting both global trends and the nation’s unique appeal as a luxury destination. According to the Global Wellness Institute (GWI), the sector reached USD 1.64 billion in 2023, accounting for an impressive 24.49% of the country’s GDP. This marks a dramatic recovery and sustained growth trajectory following the disruptions caused by the pandemic.
The sector’s recovery has been particularly striking, with an average annual growth rate of 12.8% between 2019 and 2023. The most recent year alone saw a 35.2% expansion, driven by high-value segments such as wellness tourism and spa services. Wellness tourism remains the largest contributor, generating over USD 1 billion in 2023. The Maldives’ reputation for luxury experiences has made it a magnet for international travellers seeking rejuvenation. These visitors, particularly those motivated explicitly by wellness activities, spent an average of USD 6,084 per trip, underscoring the high value of this market.
Spa services have also played a significant role, with revenues tripling from 2020 to 2023 to reach USD 448 million. This growth highlights the increasing demand for luxury health resorts and hotel-based spas, which offer a blend of relaxation and therapeutic treatments. Other sectors, such as traditional and complementary medicine and healthy eating, have shown steady progress, aligning with global shifts towards holistic health and wellness practices. The market for healthy-labelled foods and supplements has been particularly dynamic, reflecting evolving consumer preferences.
However, the wellness economy in the Maldives is not without its challenges. Its reliance on international visitors leaves the sector vulnerable to external shocks. There is limited domestic infrastructure to support wellness initiatives locally, creating an opportunity for further development. Investments in wellness-focused real estate have been identified as a promising avenue, given the sector’s annual growth rate of 14.6%. Mental wellness services, including mindfulness and meditation, also offer potential for innovative offerings that could cater to both international and domestic markets. Encouraging greater engagement in domestic wellness tourism would help diversify and strengthen the sector’s foundations.
In the regional context, the Maldives ranks 22nd among 45 countries in the Asia-Pacific region for its wellness economy. Per capita wellness spending in the country is significantly higher than the regional average, reflecting the Maldives’ alignment with global trends. As the global wellness economy is projected to grow at 7.3% annually until 2028, outpacing global GDP growth, the Maldives is well-positioned to capitalise on this momentum.
The Maldivian wellness economy stands as a testament to the country’s ability to harness its natural beauty and luxury appeal for economic benefit. Strategic investments and policies supporting wellness-focused offerings will be crucial to sustaining its growth and ensuring resilience in the face of future challenges.
The Maldives’ new partnership with Liverpool FC has positioned the island nation for unprecedented global exposure. By aligning itself with one of the most popular football clubs in the world, the Maldives aims to elevate its status as a luxury travel destination while tapping into a broader, more diverse audience. This strategic move is not just about branding — it reflects a deeper effort to sustain the Maldives’ economic growth through tourism.
Liverpool FC’s global influence makes it a valuable partner for any brand seeking to expand its international reach. The club’s social media following of over 200 million people, coupled with a Premier League audience exceeding 471 million viewers last season, provides a platform unmatched in visibility.
The club’s extensive media presence extends across Europe, Asia, and the Americas, regions that represent key markets for Maldives tourism. With Liverpool FC registering nearly 12 billion social media views and 1.5 billion engagements last season alone, Visit Maldives is set to capitalise on this reach to build brand awareness among new demographics.
This partnership aligns well with the Maldives’ tourism strategy, as football fans often fall within high-spending groups. Visit Maldives’ data suggests that 22 million Liverpool FC fans across core markets have shown interest in visiting the Maldives. Even a modest conversion of this audience into actual visitors could significantly boost the Maldives’ tourism numbers.
Projections from industry analysts suggest that this partnership could attract over 100,000 additional visitors to the Maldives in 2025 alone. This surge in arrivals is expected to translate into more than USD 100 million in additional tourism revenue, a significant contribution to the country’s ambitious target of USD 5 billion in tourism receipts for the year.
The Maldives’ tourism industry recently experienced a record-breaking year in 2024, and this collaboration is seen as a strategy to maintain growth momentum. By connecting with Liverpool FC’s fan base, Visit Maldives is targeting a market that aligns with the high-end travel segment — a key driver of the Maldives’ luxury tourism sector.
Central to the partnership is the prominent visibility Visit Maldives will receive throughout Liverpool FC’s marketing channels. The Maldives’ brand will feature on Anfield Stadium’s LED boards during Premier League home matches, ensuring exposure to millions of television viewers worldwide.
In addition to stadium visibility, Visit Maldives will be promoted through exclusive content, advertisements in Liverpool FC’s official publications, and targeted campaigns across major European cities. These campaigns aim to engage premium travellers, positioning the Maldives as a destination that offers more than just idyllic beaches.
This integrated marketing approach is designed to create sustained awareness of the Maldives, with promotional content expected to reach an estimated 397 million people per season. The projected media value of this exposure is estimated to exceed USD 17 million annually.
One of the standout elements of this partnership is Visit Maldives’ commitment to developing sports tourism. The establishment of a Liverpool Academy in the Maldives is intended to merge football-focused experiences with the country’s luxury tourism offerings. This initiative is expected to attract football enthusiasts, aspiring athletes, and families seeking unique travel experiences.
Incorporating sports into the Maldives’ tourism landscape represents a strategic move to diversify the country’s appeal. By offering football training programmes alongside luxury resort stays, the Maldives could broaden its market appeal while enhancing its reputation as a family-friendly destination.
Additionally, Liverpool FC legends are expected to participate in Visit Maldives’ trade fairs, exhibitions, and roadshows. These events will further strengthen the link between football culture and Maldivian tourism, creating memorable experiences for fans.
The partnership extends beyond tourism growth, with both Liverpool FC and Visit Maldives committed to environmental sustainability. The Maldives is particularly vulnerable to climate change, and promoting responsible tourism has been a cornerstone of its strategy.
By aligning with Liverpool FC’s sustainability initiative, The Red Way, Visit Maldives is reinforcing its commitment to ocean conservation and environmental protection. This aspect of the partnership not only resonates with environmentally conscious travellers but also highlights the Maldives’ ongoing efforts to preserve its delicate marine ecosystems.
This partnership signals a shift in how the Maldives is marketing itself in a competitive global travel landscape. By combining luxury travel offerings with football’s global influence, the Maldives is creating a unique value proposition that appeals to both high-net-worth individuals and passionate sports fans.
The timing of this initiative is critical. With global travel patterns continuing to recover post-pandemic, the Maldives’ alignment with Liverpool FC ensures the nation remains top of mind for those planning their next holiday. The expected influx of visitors could provide a crucial boost to the Maldives’ tourism sector, helping sustain growth and drive new investments in hospitality infrastructure. Should this partnership prove successful, it may also inspire similar collaborations between football clubs and other luxury travel destinations, setting a new benchmark for sports-driven tourism campaigns.
The Maldives’ partnership with Liverpool FC represents more than just a marketing deal — it’s a strategic investment in the country’s future as a top-tier luxury travel destination. By leveraging Liverpool FC’s vast global reach, Visit Maldives is well-positioned to attract new visitors, diversify its tourism offering, and reinforce its reputation as the ultimate island getaway.
The Maldivian construction sector, which contributes significantly to the nation’s GDP, is under immense pressure due to a combination of economic factors and structural vulnerabilities. The industry plays a critical role in infrastructure development, residential housing, and tourism-related construction, yet it has seen a marked slowdown in recent years, as revealed by economic data and industry insights.
Government spending and rising debt have been key contributors to the stagnation in the construction sector. In 2024, public expenditure on infrastructure assets fell by 40.4% compared to the previous year, reflecting a reduction of MVR 1.9 billion. This decrease in spending is primarily attributed to delays in road, bridge, and airport projects, which saw a combined reduction of MVR 983 million
The Maldives Monetary Authority’s (MMA) Quarterly Economic Bulletin highlights that the construction sector’s growth was marginal in Q1 2024, contributing only 0.1 percentage points to GDP growth. However, the subsequent quarter showed contraction in activity, exacerbated by delayed payments to contractors and stalled government projects
Construction companies heavily reliant on government contracts have faced financial instability due to delayed payments. A veteran contractor noted that government arrears total millions of Maldivian Rufiyaa, threatening the financial health of many firms. This issue is compounded by limited access to financing, as credit allocations heavily favour residential housing projects. In 2021, over 93.6% of the construction loans were directed towards housing, leaving little for commercial or infrastructure projects
While credit to the sector grew by 18% in Q2 2024, this growth is insufficient to offset the rising costs of imports and operational delays. The slowdown in commercial and industrial construction projects further weakens the industry’s financial backbone
The Maldives’ dependence on imported materials, such as cement, aggregates, and steel, exposes the industry to exchange rate volatility and global market fluctuations. In 2022, construction-related imports exceeded USD 133 million, equivalent to over MVR 2 billion, highlighting the sector’s vulnerability to rising global commodity prices
The scarcity of dollars in the Maldivian banking system has forced many companies to source foreign currency from the black market, where exchange rates significantly inflate material costs. By Q2 2024, the US dollar was trading at over MVR 19 on the parallel market, compared to the official rate of MVR 15.42. Consequently, material costs have soared, eroding profit margins and stalling new projects.
The Maldives’ construction industry is heavily reliant on expatriate labour, with an estimated 13 foreign workers for every local employee. This reliance amplifies costs as wages for skilled and unskilled labour rise alongside inflation in source countries. For instance, inflation in India, a key source of labour, was projected at 4.6% in 2024, further straining operational budgets
Private sector construction, which historically supplemented government projects, is also facing challenges. While new real estate projects were previously prominent, announcements of fresh developments have dwindled. The stagnation reflects broader economic uncertainties and declining consumer confidence, further slowing growth
Addressing the challenges faced by the Maldivian construction industry requires a multifaceted approach:
REVIVING GOVERNMENT PROJECTS: Allocating targeted funds for stalled infrastructure projects could rejuvenate industry growth.
IMPROVED PAYMENT MECHANISMS: Introducing transparent systems for timely payments to contractors would mitigate financial risks.
ACCESS TO AFFORDABLE FOREIGN EXCHANGE: Establishing measures to stabilise dollar availability could reduce reliance on the black market.
DIVERSE FINANCING OPTIONS: Expanding credit facilities to include commercial and infrastructure projects is critical for balanced sector growth.
The construction sector, a vital pillar of the Maldivian economy, is at a crossroads. Delayed payments, rising costs, and policy gaps threaten its stability. However, with targeted interventions and collaborative efforts between the government, private sector, and financial institutions, the industry can overcome its current challenges and re-establish itself as a cornerstone of national development.
The Maldives is grappling with the growing consequences of rising sea levels and extreme weather events. The recent torrential rains and flooding, which affected hundreds of homes and displaced families across Male’, Hulhumale’, and several islands, are yet another reminder of the nation’s exposure to climate hazards. As the country braces for worsening impacts, the concept of resilient housing has emerged as a crucial tool for safeguarding communities and ensuring long-term sustainability.
The Resilient Housing Guidance for the Maldives, developed with technical support from the World Bank, offers a comprehensive framework for building homes that can withstand the increasing intensity of climate-related threats. Here’s how resilient housing can address the challenges faced by the Maldives and protect its most vulnerable communities.
The Need for Resilient Housing in the Maldives
The Maldives is particularly at risk from flooding, strong winds, and rising sea levels due to its low-lying geography. The recent weather events, including widespread flooding across islands such as F. Nilandhoo, Dh. Kudahuvadhoo, and ADh. Maamigli, demonstrate the devastating impacts of climate change on homes, infrastructure, and livelihoods.
While emergency measures, such as temporary shelters and sandbag barriers, offer short-term relief, the increasing frequency of such events underscores the need for long-term solutions. Resilient housing provides a way to mitigate these risks by ensuring homes are better equipped to withstand future disasters.
Key Features of Resilient Housing
The Resilient Housing Guidance focuses on practical and sustainable solutions to make homes safer and more adaptable to the changing climate.
Elevating Homes Above Flood Levels:
Houses are recommended to be built at least 1-2 feet above the highest recorded flood levels to minimise the risk of water damage during heavy rains and sea surges.
Using Durable and Sustainable Materials:
Materials resistant to humidity, saltwater, and high temperatures—such as treated timber, concrete, and galvanised steel—can significantly enhance the lifespan of homes.
Improved Roofing Systems:
Reinforced roofs, designed to withstand strong winds and storms, are critical for reducing damage during cyclones and heavy gusts.
Strategic Site Selection:
Building homes on plots farther from the coastline or areas prone to flooding reduces exposure to hazards, while community planning ensures equitable access to services and amenities.
Energy Efficiency and Ventilation:
Designs incorporating natural ventilation and energy-efficient materials reduce heat stress and improve indoor air quality, offering protection during extreme heatwaves.
Resilient housing not only reduces the risks posed by climate hazards but also contributes to economic stability and environmental sustainability:
Reduced Recovery Costs: By minimising damage during disasters, resilient homes lower the financial burden of post-disaster reconstruction and recovery.
Improved Livelihoods: Communities with safer, well-planned housing are better positioned to recover quickly, ensuring minimal disruption to livelihoods.
Climate Adaptation: By integrating climate-resilient features, the Maldives can proactively adapt to the challenges posed by rising sea levels and unpredictable weather patterns.
While the Maldives has made strides in disaster management and climate adaptation, resilient housing must become a cornerstone of national policy. The government should prioritise the following:
Incentivising Resilient Construction: Providing subsidies or financial assistance for adopting resilient housing practices.
Community Awareness: Educating the public on the benefits of resilient housing and encouraging local participation in climate adaptation efforts.
Integrating Resilience into Development Plans: Ensuring all new housing and infrastructure projects incorporate resilient features.
By aligning government investments with the recommendations in the Resilient Housing Guidance, the Maldives can better prepare for the challenges ahead.
As climate change continues to intensify, resilient housing is no longer an option but a necessity for the Maldives. The recent flooding serves as a stark reminder of the urgency to adapt. By investing in resilient housing and embedding these principles into national development strategies, the Maldives can protect its citizens, preserve its unique environment, and secure its future as a thriving island nation.
The Maldives is grappling with the growing consequences of rising sea levels and extreme weather events. The recent torrential rains and flooding, which affected hundreds of homes and displaced families across Male’, Hulhumale’, and several islands, are yet another reminder of the nation’s exposure to climate hazards.
A home is more than just a place to live—it’s a reflection of aspirations, a sanctuary for daily life, and a canvas for selfexpression. At Bayfancy, each floor plan tells a thoughtfully crafted story, seamlessly blending aesthetics, functionality, and comfort. Designed to enhance modern living, every space offers a harmonious balance between practicality and personal style.
Whether you’re a young professional seeking a vibrant space, a growing family needing adaptable layouts, or a retiree looking for tranquility, Bayfancy offers thoughtfully designed homes to suit every lifestyle. With versatile floor plans that evolve with life’s changing needs, Bayfancy ensures that every resident finds a place to truly call home.
At Bayfancy, every room is designed with meticulous attention to detail, elevating the concept of modern comfort. The spacious living room serves as the heart of the home—a warm and inviting space for family gatherings, relaxation, and shared moments. An open-concept kitchen and dining area foster connection, making everyday cooking and entertaining a joyous experience.
Life at Bayfancy is not just about solitude; it’s about laughter, companionship, and meaningful interactions.
A defining feature of Bayfancy’s residences is the ingenious use of natural light. Over 90% of the bathrooms receive direct sunlight, creating bright and refreshing spaces while reducing energy consumption. This commitment to sustainability not only enhances everyday living but also reflects a deep responsibility towards the environment. By integrating eco-friendly design elements, Bayfancy allows residents to enjoy both comfort and conscientious living.
Functionality meets elegance in Bayfancy’s floor plans. Open layouts seamlessly connect the living room, dining area, kitchen, and balcony, enhancing both visual flow and space efficiency. Bedrooms and balconies are thoughtfully arranged for privacy, while careful spacing between units ensures peace and tranquility in the midst of urban life.
Bayfancy’s homes are designed for those who seek balance—a perfect blend of convenience, serenity, and modern living.
A kitchen should be as versatile as the people who use it. Bayfancy’s innovative kitchen design features an open layout that can be easily transformed into a closed space using sleek glass partitions. The elegant island design enhances both functionality and aesthetics, offering an ideal space for casual dining, meal prep, and social gatherings.
Every detail at Bayfancy is carefully considered to enhance daily life. The bedroom layouts offer a private retreat while remaining seamlessly connected to shared family areas. A thoughtfully designed guest bathroom, equipped with central air conditioning and optimized lighting, adds convenience and sophistication.
The laundry area, often overlooked in traditional designs, is crafted with flexibility in mind—ensuring that even life’s smaller tasks feel effortless.
Choosing Bayfancy Residence is more than selecting a home—it’s embracing a way of life.
MORNING: Wake up to natural light streaming through your kitchen windows as you prepare breakfast in a warm and inviting space.
AFTERNOON: Watch your children laugh and play on the spacious terrace, the gentle sea breeze filling the air, while you retreat to your bedroom for a moment of focus.
EVENING: Gather with family in the expansive living room, sharing the highlights of your day and creating lasting memories.
These moments are the essence of home—crafted with intention, designed with heart. At Bayfancy, architecture is more than just structures; it’s about shaping experiences and elevating everyday life.
Bayfancy Residence is not just a place to live—it’s an artful expression of living well.
The Maldives faces an existential threat from climate change. With tourism and fisheries constituting nearly half of the nation’s GDP and employment, the adverse effects of climate change on coral reefs and marine ecosystems pose significant economic challenges.
The Maldivian government has set an ambitious target to achieve net-zero carbon emissions by 2030, contingent upon receiving international support. The private sector is crucial in realising this goal through sustainable practices, investments in renewable energy, and active participation in climate resilience initiatives.
The Maldives relies heavily on imported diesel for power generation, leading to high electricity costs and carbon emissions. To address this, the government, in collaboration with international partners, is promoting renewable energy projects. The Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) project aims to mobilise private investments for innovative solar photovoltaic subprojects, supported by financing from the Clean Technology Fund and co-financing from the Asian Infrastructure Investment Bank.
Private sector involvement is crucial in developing and operating these renewable energy infrastructures, thereby reducing dependence on fossil fuels and contributing to the nation’s carbon neutrality objectives.
Tourism, as the backbone of the Maldivian economy, offers a unique opportunity for the private sector to lead in sustainability. Resorts and tourism operators are increasingly adopting ecofriendly practices, such as utilising renewable energy sources, implementing waste reduction programmes, and participating in coral reef conservation. For instance, the Six Senses Laamu resort has established the Sea Hub of Environmental Learning (SHELL) to conduct marine research and promote conservation efforts in partnership with organisations like the Manta Trust and the Blue Marine Foundation. Such initiatives not only mitigate environmental impact but also cater to the growing market of ecoconscious travellers.
The fisheries sector, vital for both food security and employment, is vulnerable to climate-induced changes in marine ecosystems. Private enterprises can invest in sustainable fishing practices and aquaculture to enhance resilience. Additionally, integrating climate-smart agriculture techniques can help in adapting to changing environmental conditions, ensuring the stability of local food production and livelihoods.
Achieving the Maldives’ climate goals necessitates substantial financial investments. The private sector can access international climate finance mechanisms, such as the Green Climate Fund, to support mitigation and adaptation projects. In August 2022, the United States Agency for International Development (USAID) awarded grants to the Small and Medium Enterprise Development Finance Corporation and FJS Consulting to support climate resilience interventions, exemplifying how private entities can leverage external funding for climate action.
Collaborative efforts between the government and private sector are essential in formulating and implementing effective climate policies. Public-private partnerships can drive large-scale infrastructure projects, such as the development of renewable energy grids and sustainable urban planning. Moreover, private sector advocacy for robust environmental regulations can create an enabling environment for sustainable business practices. The introduction of the first sustainability reporting framework in the Maldives, supported by the United Nations Development Programme and the Maldives’ Capital Market Development Authority, aims to guide private investments towards sustainability. The private sector in the Maldives holds a critical role in addressing the challenges posed by climate change. Through proactive engagement in renewable energy, sustainable tourism, resilient fisheries and agriculture, mobilisation of climate finance, and active participation in policy development, private enterprises can drive the nation towards its net-zero emissions target by 2030. Such concerted efforts will not only safeguard the Maldives’ unique environmental heritage but also ensure long-term economic prosperity.
ENVIRONMENT & CLIMATE
The Maldives has issued its first Special Economic Zones (SEZ) Permit under the SEZ Act, paving the way for the development of Project Solar City, a landmark renewable energy initiative. The permit, granted through the Board of Investments, was awarded to a Special Purpose Vehicle incorporated in the Maldives by Abraxas Power Corp, a Canadian company specialising in renewable energy. According to the Ministry of Economic Development, the permit authorises the developer to construct and operate a 100MW floating solar photovoltaic (PV) project in a lagoon located approximately 4–5 kilometres from Hulhumalé. The project will also feature battery storage and a submarine cable interconnection to the main electricity grid in Hulhumalé.
The initiative aligns with the country’s target of generating 33% of the country’s electricity demand from renewable sources. In 2023, fuel imports accounted for 22% of total imports, with nearly 80% used for diesel in electricity generation and marine transport. The ministry noted that Project Solar City is expected to significantly reduce reliance on fossil fuels, leading to an estimated annual saving of $42 million on the national fuel bill.
The SEZ permit also allows for complementary developments, including commercial real estate and an industrial hub, with the condition that investments in renewable energy must take priority. The renewable energy component alone represents a committed investment of over $100 million, bringing the total estimated investment to $187 million, in compliance with the presidential decree under the SEZ Act.
The developer plans to mobilise the project by the end of April 2025, with an expected operational launch in 2027. The Ministry of Economic Development emphasised that this permit marks a significant step in the government’s strategy to encourage sustainable energy solutions and attract private investment for key projects within the SEZ framework.
“The government remains committed to fostering an enabling environment for innovative and sustainable economic development initiatives,” the statement concluded.
As the Maldives enters 2025, businesses must adapt to a transforming workplace shaped by technology, employee expectations, and the cultural dynamics of the nation. Here are five key HR strategies that Maldivian businesses can adopt to stay competitive and build a thriving workforce:
The geographic dispersion of the Maldives presents unique challenges for employees. Flexible work arrangements, such as remote work or hybrid models, can reduce travel time and costs while improving work-life balance. For businesses in Male’ and beyond, investing in digital collaboration tools like Microsoft Teams or Slack will enhance productivity and ensure smooth operations across islands.
The close-knit nature of Maldivian communities often creates additional work-life pressure, particularly in high-stress industries like tourism. Businesses should introduce wellness programmes that include access to mental health resources, counselling services, and stress management workshops. Regular teambuilding activities and cultural events can also create a more harmonious and supportive workplace environment.
The Maldives’ dependence on tourism means employees must continually adapt to evolving trends in hospitality, technology, and customer service. Offering skill-based training tailored to the tourism sector, such as language classes, digital marketing courses, and sustainable tourism practices, can make Maldivian workers more competitive globally. Online platforms like Coursera or partnerships with training institutes can help facilitate this learning.
Given the Maldivian emphasis on respect and community, businesses can foster loyalty by recognising employee contributions. Implementing monthly awards, peer-to-peer recognition programmes, and clear career progression pathways will keep employees engaged. For smaller businesses, celebrating even small milestones, like work anniversaries, can reinforce a culture of appreciation and belonging.
While Maldivian workplaces tend to be homogenous, fostering diversity, particularly in the hospitality and expatriate-heavy
sectors, can lead to richer workplace dynamics and innovation. Companies can encourage inclusion by promoting cross-cultural understanding through workshops and creating policies that value diverse perspectives, ensuring both local and foreign employees feel respected and integrated.
By aligning these strategies with the Maldivian work culture, businesses can build resilient teams, foster innovation, and position themselves as employers of choice in the competitive global landscape. Investing in people will not only benefit employees but also drive the nation’s economic growth in 2025 and beyond.
In the evolving landscape of corporate culture, Maldives’ human resource departments face mounting pressure to attract, engage, and retain top talent. Traditional training methods—often seen as dull and unengaging—can lead to high turnover rates and low employee satisfaction. Enter gamified training, an innovative approach that blends work and play to reinvigorate how employees learn, develop skills, and stay motivated.
Gamification takes elements from the gaming world—leaderboards, points, rewards, and immersive challenges—and incorporates them into training modules. Globally, companies have already seen transformative results. For Maldivian HR professionals, adopting such methods could mark a paradigm shift in workforce development, paving the way for increased productivity and a more enthusiastic, skilled workforce.
In many Maldivian organisations, the current approach to training involves static presentations, dry manuals, and obligatory workshops. Employees often sit through sessions, passively absorbing information that may never translate into improved performance. Gamification changes that dynamic. Instead of passivity, employees engage actively, driven by real-time feedback and a sense of competition or collaboration. For example, a training module on customer service skills could involve roleplaying scenarios where participants earn badges for resolving fictional customer complaints, with those earning the most badges receiving public recognition or tangible rewards.
By turning training into a competitive yet cooperative activity, gamified approaches not only increase knowledge retention but also foster camaraderie and healthy competition among colleagues. These methods make learning less about checking boxes and more about achieving goals—and enjoying the process along the way.
Maldivian HR leaders are uniquely positioned to benefit from gamified training. The Maldives’ economy is heavily reliant on its tourism and service sectors, industries that depend on highly trained, motivated staff. By integrating gamified elements into employee onboarding, skills development, and leadership training, HR departments can ensure that new recruits are ready to excel from day one and that seasoned employees continually refine their expertise.
Moreover, gamification aligns well with Maldivians’ increasing engagement with digital platforms. With mobile gaming on the
rise and an ever-growing comfort with technology, workers are more likely than ever to embrace digital learning environments. Maldivian companies could introduce online training games where staff earn virtual currency for completing tasks, which can then be exchanged for real-world perks such as extra leave days or wellness benefits. By doing so, organisations not only improve skills and productivity but also boost employee morale, loyalty, and overall workplace happiness.
Globally, businesses that have adopted gamified training report tangible outcomes: higher completion rates for training courses, improved employee performance metrics, and lower turnover. For instance, a global tech firm that implemented a gamified leadership development program saw a 50% increase in program completion rates and a 47% improvement in performance reviews among participants.
For Maldivian HR leaders, the key lies in tailoring gamified training to local needs. In a culturally diverse and geographically dispersed workforce, finding games and challenges that resonate with all employees can be a hurdle. It’s not simply about creating a game— it’s about designing meaningful, culturally relevant experiences that motivate employees across different roles and demographics. Furthermore, companies must ensure that gamification does not overshadow the importance of genuine skill-building. Gamified training should complement, not replace, other forms of development. By maintaining a balanced approach—one that blends innovative gaming elements with solid instructional content—Maldivian HR leaders can achieve the best of both worlds.
As the Maldives continues to grow as a global destination for luxury tourism and beyond, its workforce must remain competitive and well-equipped to meet the challenges of the modern economy. Gamified training presents a unique opportunity to elevate HR practices, creating a more engaged, competent, and satisfied workforce. If implemented thoughtfully, this approach could transform the way Maldivian companies develop talent, ultimately driving greater success for businesses and improved career satisfaction for employees.
In the coming years, as technology evolves and the workforce becomes increasingly digital, Maldivian HR leaders who embrace gamified training early will not only keep pace with global trends but also set new benchmarks for employee development and engagement within the region.
HUMAN RESOURCES
The COVID-19 pandemic has indelibly transformed the way we live, work, and conduct business globally. For the Maldives, a country that thrives on tourism, trade, and small-scale entrepreneurship, the pandemic has been both a disruption and a revelation. As we navigate through the post-pandemic landscape, there are several lessons to be learned from the ‘new normal’, lessons that suggest some of these changes are here to stay, and perhaps, should stay. In the corporate world, these shifts have fostered more flexibility, resilience, and sustainability, laying the foundation for a future that looks markedly different from the pre-pandemic era.
One of the most significant shifts that emerged during the pandemic is the adoption of remote work and hybrid models. In the Maldives, where many corporate entities are based in capital proved that
physical presence is not always necessary for productivity. Companies discovered that employees could deliver results from their homes or distant locations, and in some cases, productivity even increased. According to a McKinsey research, 80% of people working from home reported enjoying the arrangement, with 41% indicating they were more productive than before, and 28% stating they were equally productive. This trend aligns with global experiences where office attendance has stabilized at about 30% below pre-pandemic levels, illustrating the growing acceptance of remote work as a viable model.
Embracing this model has brought numerous benefits. Reduced overhead costs, less time wasted on commuting, and the potential for a more balanced work-life environment have all contributed to a more efficient workforce. For instance, organizations that shifted to remote or hybrid work models reported a significant reduction in real estate costs, potentially up to 30%. From a
corporate perspective, businesses should continue to build on this momentum by integrating flexible work policies and hybrid models as a part of their standard operations. Not only does this accommodate employee needs, but it also attracts a broader talent pool, including those who may not be located in the capital but have the skills and expertise companies need.
The pandemic accelerated digital transformation in the Maldives, compelling companies to innovate rapidly. Businesses across various sectors, from tourism to retail, had to adopt digital tools to sustain operations. E-commerce platforms saw a surge, contactless payments became the norm, and virtual collaboration tools became essential.
Post-pandemic, the need for robust digital infrastructure is more apparent than ever. Companies that continue to invest in digital solutions, automation, and AI can ensure not only their survival but also their growth in an increasingly competitive market. The transformation is not merely about adopting new technologies but about reshaping business models to be more customer-centric and agile. Retaining this momentum will be key to thriving in a future where digital-first is the expectation.
Another key takeaway from the pandemic is the heightened emphasis on health and safety. In the Maldives, where hospitality is a cornerstone of the economy, stringent health protocols became vital to ensuring the safety of both tourists and locals. Businesses implemented enhanced cleaning procedures, contactless checkins, and digital menus—measures that provided reassurance and built trust.
Rather than seeing these protocols as temporary inconveniences, companies should view them as a new standard of care that can differentiate them in a competitive market. Continued emphasis on health and safety can create a more sustainable business environment, particularly in sectors like tourism, where customer confidence is paramount.
The pandemic also brought mental health and well-being to the forefront of corporate discussions. With the blurring lines between work and home, the stress of isolation, and the uncertainty brought by the virus, employee well-being became a crucial concern. This period highlighted the need for companies to take a more holistic approach to employee care, incorporating mental health support, flexible working hours, and fostering a culture of empathy and support.
Going forward, the corporate sector in the Maldives must continue to prioritise mental health as a core component of their human
resource policies. Offering counselling services, creating support networks, and ensuring a balanced work culture will not only enhance employee satisfaction but also boost overall productivity.
The pandemic showed the fragility of global supply chains and the importance of sustainability. The reduction in travel and consumption during lockdowns led to temporary environmental benefits, showing the positive impact of reduced carbon footprints. For businesses in the Maldives, particularly those in tourism, this was a wake-up call to adopt more sustainable practices.
The ‘new normal’ should not mean a return to the previous ways of overconsumption and waste. Instead, companies should double down on sustainable practices, from reducing single-use plastics to adopting renewable energy sources. A shift towards sustainability can lead to long-term cost savings, brand loyalty, and a more resilient business model that aligns with the global push towards greener economies.
The pandemic exposed the vulnerabilities in traditional business continuity plans. Many companies found themselves unprepared for a crisis of this magnitude. Moving forward, businesses must focus on creating more robust continuity plans that include not just financial strategies, but also digital resilience, flexible supply chains, and agile operations.
Companies in the Maldives, especially those reliant on tourism and imports, should use this opportunity to rethink their risk management frameworks. Diversification, both in terms of markets and supply chains, and investing in technology that enhances operational flexibility can make businesses more adaptable to future disruptions.
The lessons learned from the pandemic have shown that while the world may eventually ‘move on,’ it should not ‘go back’ to the old ways. The changes driven by the pandemic, remote work, digital transformation, health and safety standards, mental health prioritisation, sustainability, and robust business continuity planning are not just reactive measures but proactive strategies that can reshape the future of corporate practices in the Maldives. By embracing these lessons, companies can build a more resilient, sustainable, and inclusive business environment, better prepared for whatever challenges the future holds.
The Maldives Stock Exchange (MSE) has achieved a significant milestone with the launch of its first-ever online Automated Trading System, marking a new chapter in the nation’s securities market. Unveiled on the Exchange’s 17th anniversary, the system revolutionises trading by allowing real-time transactions of listed securities.
At the heart of this innovation lies the Order Management System (OMS), a web application enabling brokers to submit investor orders directly to the Stock Exchange. The OMS ensures that orders are instantaneously communicated to the trading board and matched in real-time, enhancing efficiency and transparency. Complementing this system is the “Trade Connect” feature, introduced by the Maldives Securities Depository (MSD) on the BANKING &
Infinity platform (accessible via https://infinity.mv/). This feature enables verified users to log in, select a broker, and execute trades seamlessly online. With this advancement, investors can access market services at their convenience, submit trade requests, and track transactions with ease.
MSE, licensed by the Capital Market Development Authority (CMDA) in 2008, has consistently introduced technological innovations to strengthen the Maldivian securities market. Initiatives like the Infinity self-service portal, the electronic AGM management system “Fahivote,” the Securities Registry Management System (SRMS), and the private market platform “Viyana” have laid the groundwork for today’s advancements.
The online trading system, developed entirely in-house, underwent a beta phase starting in June 2024 with a select group of users. Following rigorous regulatory checks, the CMDA granted its approval on 22 January 2025, paving the way for its official launch.
The Trade Connect feature is designed to enhance transparency and accessibility for investors. Through the platform, users can monitor real-time market information, price changes, and order book details, enabling them to make well-informed decisions. Furthermore, the system’s API integration provides brokers with the flexibility to expand their services and cater to a broader clientele.
The platform allows investors to submit trade requests at any time via their preferred broker or by registering with new brokers. Brokers verify each request as per regulatory guidelines before forwarding it to the Exchange, ensuring compliance and reliability. The MSE’s commitment to innovation underscores its dedication to fostering growth in the Maldives securities market. The launch of this online trading system is a testament to the efforts of its staff, management, and stakeholders. As the Exchange continues to build on its sustainable approach, it aims to further develop and expand its services in the years ahead.
The Free Trade Agreement (FTA) between the Maldives and China presents a transformative opportunity for Maldivian exporters, granting preferential access to one of the world’s largest and most dynamic markets. However, while the FTA reduces tariffs on key exports such as fisheries, the devil lies in the details, particularly in the rules of origin (ROO). These rules determine which goods qualify for tariff exemptions, posing challenges for exporters seeking to maximise the agreement’s benefits.
Rules of origin are the backbone of any FTA, defining the minimum criteria a product must meet to be considered “originating” from a member country. Under the Maldives-China FTA, goods must satisfy one of the following:
• Be wholly obtained or produced within the exporting country, such as marine products caught in Maldivian waters.
• Be produced using non-originating materials that undergo sufficient transformation, meeting a regional value content (RVC) threshold of at least 40% of the product’s free-on-board (FOB) value.
Goods that do not meet these criteria, such as those involving minimal operations like packaging or labelling, are excluded from preferential treatment. For Maldivian exporters, this necessitates a sophisticated understanding of production inputs and detailed record-keeping.
The FTA provides significant tariff reductions on fisheries products, a mainstay of the Maldivian economy. Tuna, in particular, stands to benefit as it accounts for a substantial portion of Maldives’ exports. With the proper ROO compliance, these products can enter the Chinese market more competitively, enhancing profitability for exporters.
Encouraging the use of local inputs to meet the RVC threshold offers an opportunity for the Maldives to expand its manufacturing and processing industries. For instance, frozen or canned tuna products with locally sourced packaging could meet ROO requirements, enabling exporters to tap into China’s growing demand for processed seafood.
Beyond goods, the FTA also opens opportunities for service exports, particularly in tourism. Maldivian service providers offering unique tourism packages tailored to Chinese consumers could benefit from increased market access.
Exporters must secure a certificate of origin to demonstrate compliance with ROO, issued by authorised bodies such as the Maldives Customs Service. The process requires meticulous documentation, including proof of input sourcing and production processes. For small and medium enterprises (SMEs), the administrative burden can be significant.
Maldivian exporters dependent on imported inputs must ensure that the value of non-originating materials does not exceed 60% of the FOB value. This can complicate production planning, particularly for industries lacking robust supply chain infrastructure.
Support Measures and Recommendations
The agreement permits up to 10% of the FOB value to consist of non-originating materials that fail to meet a change in tariff classification. While this offers flexibility, exporters must navigate the fine balance between compliance and competitiveness.
Certain industries face additional restrictions. For example, the fisheries sector must comply with China’s stringent sanitary and phytosanitary (SPS) standards, which demand rigorous testing and certification.
Operations such as simple assembly, repackaging, or relabelling do not qualify products for preferential treatment. Exporters relying on these processes may need to invest in value addition to meet the ROO.
To unlock the full potential of the FTA, the Maldives must enhance its support for exporters through:
CAPACITY BUILDING: Provide training programmes on ROO compliance, supply chain management, and documentation processes for businesses.
DIGITAL PLATFORMS: Develop systems to simplify the certificate of origin application process, enabling real-time tracking and submission.
GOVERNMENT COLLABORATION: Foster closer partnerships between the government and the private sector to address challenges, such as meeting SPS standards and accessing financing for value-added production.
Additionally, bilateral initiatives with China, such as technology transfer programmes and joint ventures, could improve the competitiveness of Maldivian exporters while deepening economic ties.
While the Maldives-China FTA creates unprecedented opportunities for Maldivian exporters, especially in fisheries and value-added goods, it also introduces significant compliance challenges under the rules of origin framework. With strategic planning, capacity building, and government support, the Maldives can not only navigate these challenges but also position itself as a strong player in international trade, leveraging the agreement to drive economic growth and diversification.
The China-Maldives Free Trade Agreement (CMFTA) heralds a new era of collaboration between the two nations, with a focus on creating opportunities for service providers across both economies. By examining China’s schedule of commitments within the service sector, it becomes clear that Maldivian businesses stand to benefit significantly—if they can navigate the intricacies of the agreement.
China has opened its doors to foreign involvement in several professional services, including legal, architectural, and engineering sectors. Maldivian service providers can now explore joint ventures and wholly-owned subsidiaries, particularly in areas such as architecture and urban planning. However, technical cooperation with Chinese professional organisations remains a prerequisite, emphasising the need for partnerships to gain market entry. For architects and engineers, the requirement for professional registration in the Maldives positions them well for these opportunities.
The China-Maldives Free Trade Agreement (CMFTA) heralds a new era of collaboration between the two nations, with a focus on creating opportunities for service providers across both economies. By examining China’s schedule of commitments within the service sector, it becomes clear that Maldivian businesses stand to benefit significantly—if they can navigate the intricacies of the agreement.
China has opened its doors to foreign involvement in several professional services, including legal, architectural, and engineering sectors. Maldivian service providers can now explore joint ventures and wholly-owned subsidiaries, particularly in areas such as architecture and urban planning. However, technical cooperation with Chinese professional organisations remains a prerequisite, emphasising the need for partnerships to gain market entry. For architects and engineers, the requirement for professional registration in the Maldives positions them well for these opportunities.
Legal services, on the other hand, present unique challenges. Maldivian law firms are allowed to establish representative offices in China but are limited to advising on non-Chinese law and international conventions. This niche focus could pave the way for specialised consulting services targeting Chinese clients engaged in international trade.
China’s commitment to opening up its healthcare sector provides intriguing prospects. Maldivian investors are permitted to establish joint venture hospitals and clinics with majority foreign ownership, though the majority of medical personnel must still be Chinese nationals. This limitation suggests that while opportunities exist, they are heavily regulated to prioritise domestic employment.
Education services, too, offer promise, with contractual service suppliers (CSS) from the Maldives permitted entry, provided they meet stringent professional and academic qualifications. This presents a potential avenue for collaboration in international
education, particularly in fields like tourism and environmental studies, where the Maldives holds unique expertise.
China’s burgeoning technology sector, particularly in computerrelated services, offers Maldivian businesses a platform to innovate and grow. Wholly foreign-owned enterprises are permitted in software implementation and data processing, creating opportunities for Maldivian tech entrepreneurs to tap into one of the world’s largest markets. The demand for expertise in IT infrastructure and digital services aligns well with the Maldives’ growing digital economy.
Tourism, a cornerstone of the Maldivian economy, finds alignment within China’s commitments. Joint ventures in tourism services open the door for Maldivian entities to collaborate with Chinese firms, potentially leveraging China’s massive domestic tourism market. This aligns with ongoing efforts to diversify the Maldives’ tourism offerings beyond its pristine beaches.
Despite these openings, several hurdles persist. Regulatory compliance in China remains complex, particularly for industries like healthcare and education that are tightly monitored. Furthermore, the agreement’s emphasis on joint ventures in many sectors means Maldivian businesses must identify reliable Chinese partners to realise the full potential of these opportunities.
The CMFTA’s provisions for trade in services reflect a significant step in strengthening bilateral ties between China and the Maldives. While the path may be fraught with challenges, the opportunities it offers for Maldivian service providers are both tangible and transformative. For businesses willing to navigate the complexities of the agreement, the CMFTA provides a gateway to one of the world’s most dynamic markets.
The Maldives, with its strategic location in the Indian Ocean, has long been recognised as a key player in transshipment and logistics, particularly in seato-air cargo operations. Already engaged in this niche market with established agreements with several international airlines, the Maldives is now exploring new opportunities to enhance these operations. The China-Maldives Free Trade Agreement (CMFTA) offers a framework to expand and refine existing capabilities, aligning the country’s logistics ambitions with global trade flows.
The Maldives, with its strategic location in the Indian Ocean, has long been recognised as a key player in transshipment and logistics, particularly in seato-air cargo operations. Already engaged in this niche market with established agreements with several international airlines, the Maldives is now exploring new opportunities to enhance these operations. The China-Maldives Free Trade Agreement (CMFTA) offers a framework to expand and refine existing capabilities, aligning the country’s logistics ambitions with global trade flows.
The CMFTA, signed to strengthen economic ties between the two nations, facilitates preferential access to markets and lays a foundation for cooperative trade policies. For the Maldives, this agreement opens doors to leverage China’s robust manufacturing capabilities by serving as a logistics link between Asia, the Middle East, and Africa. The agreement’s provisions on customs facilitation, transparency, and investment cooperation further streamline opportunities for enhanced maritime and aviation logistics.
The Maldives’ unique geographic advantage offers natural access to key global shipping lanes. Velana International Airport, with its sea-to-air cargo transshipment capabilities, serves as a vital node. As shipping containers arrive at the Maldives’ ports, goods can be quickly transferred to aircraft for expedited delivery, bypassing longer maritime routes. This reduces transit times significantly, providing an attractive option for high-value or time-sensitive goods.
However, realising this potential requires targeted infrastructure upgrades. Ports and logistics centres need expansion to accommodate larger vessels and increased cargo volumes. Additionally, investment in advanced tracking systems and integration with Chinese logistics networks could enhance operational efficiency.
China’s shipping industry, one of the largest globally, stands to benefit from using the Maldives as a relay point. The partnership could foster joint ventures for logistics companies, offering mutual benefits. For China, this provides a quicker alternative to traditional routes, while the Maldives gains from increased economic activity and job creation.
China’s involvement through the CMFTA can catalyse these developments. The agreement encourages investments in sectors such as maritime transport services and infrastructure. Through Chinese expertise and funding, the Maldives can establish modern port facilities, improve container handling technologies, and build warehousing capacity tailored for sea-to-air operations.
Sustainability is a critical factor in the Maldives’ development strategy, especially given the environmental vulnerabilities of small island nations. Seato-air operations inherently reduce the environmental impact of logistics by minimising long-haul shipping distances. Investments under the CMFTA should prioritise green technology, such as electrified port equipment and fuel-efficient transport fleets, to align with global sustainability goals.
The sea-to-air cargo niche aligns with global trade trends that demand speed and efficiency. With proper implementation of the CMFTA, the Maldives could emerge as a logistics hub comparable to other major transit centres, serving as a key link in the supply chain for products ranging from electronics to perishable goods.
The CMFTA presents a golden opportunity for the Maldives to redefine its maritime and logistics sectors. By embracing infrastructure development, fostering collaborations with Chinese firms, and integrating green logistics practices, the Maldives can position itself as a pivotal hub for sea-to-air cargo transshipment, boosting its economy and global connectivity.
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