SAB Blog – The Maldives
The Maldives is at a high risk of dollar reserve depletion by 2023. The primary causes are Covid-19’s impact on the tourism industry, soaring global fuel prices, and rising borrowing costs. Maldives has USD 829 million in reserve. However, the national debt, at USD 5.9 billion in 2021, has ballooned to USD 6.4 billion in the first quarter of 2022.
Minister of Finance, Ibrahim Ameer, assured that the Maldivian finance is in better shape now than in the last three years. The economy is growing with the arrival of tourists. The Maldives is expected to grow at 13-18 percent in 2022.
Maldives and India conducted the second joint hydrographic survey of Maldives, covering 6500 nautical miles. The survey is critical for the Maldives to update the Navigational Charts/Electronic Navigational Charts for ship safety in several areas of Maldives and enhance Blue Economy. The first phase of the survey started in 2021. Some of those areas were not surveyed since 1853.
The joint survey resulted from India’s policy of supporting the Maldives to set up Hydrographic facilities. India provided the Maldives with hydrographic survey equipment in 2021 and 2022. The joint survey will enable economic development, defence, security, coastal zone management, environmental protection, and scientific research.
President Ibrahim Mohamed Solih sought approval from the parliament to join the International Islamic Trade Finance Corporation (ITFC). Maldives is not a member of ITFC. Yet, ITFC has provided financial assistance to the Maldives since 2005. ITFC aims to advance trade among members of the Organization of Islamic Cooperation (OIC). The Russian invasion of Ukraine has adversely impacted Maldivian tourism. The two countries jointly accounted for 14 percent of tourist arrivals between January to March of the current year. Despite this, Maldives condemned the Russian invasion of Ukraine at the United Nations General Assembly (UNGA) vote. Furthermore, the Maldives has reiterated its firm belief in principles of respect for sovereign states and sovereign equality. Yet, Maldives has taken a cautious approach to enforcing the sanctions imposed by the West in the aftermath of Russian aggression in Ukraine.