Abstract:
Maldives is a Small Island Developing State (SIDS) with a population of 400,000, spread across 187 inhabited islands. Real GDP of the country has been increasing at a rate of 6.7% every year since 2016, stemming mainly from development of tourism and its related industries. Construction and trade also fostered during the recent years. The development paved way for investments for the better attainment and access to education, healthcare, infrastructure, and social provisions within the past few years.
As a SIDS, Maldives is however constrained, by its structural characteristics, such as the geographic isolation, small size, limited natural resources and small population to expand and diversify the economy. These characteristics accelerate the existing inequalities in the country as evidenced by the 21% loss from HDI value once accounted for inequalities in the distribution of key dimensions. One main constraint of the economy is its dependence on tourism receipts for steady growth. Contrastingly, about two thirds of the Maldivians are employed in non-tourism jobs and are mostly employed by the government. This shows a misalignment of available resources and reliance on foreign labor for drivers of growth. Wage and other benefit differentials and lack of policy incentives discourage most to take up private employment/opportunities.
Unemployment rate increased to 8 percent among youth with an underemployment rate of 26.8 percent . Over a quarter of women are unemployed or not looking for a job. However, recent developments have demonstrated more youth willingness and participation in creating sustainable solutions for the communities and a growing entrepreneurship ecosystem.
With a renewed commitment from the government towards economic diversification significant work through various platforms are undertaken to reduce dependency on a few industries. These include, adoption of accommodative policies for inclusion to tackle structural barriers and inequalities inherent, and to promote and improve the entrepreneurial ecosystem that would foster local products and services and complement growth of these new industries with the existing industries., The government also welcomes participatory forums from different groups to formulate and achieve these goals in the medium term.
