A Chinese company was enlisted to develop an integrated tourism zone in Addu City’s Hankede. A contract for the US$142.9 million project – financed with a loan from the Bank of China – was signed between the Maldives Fund Management Corporation and China National Electrical Engineering Company (CNEEC).
First announced in January, the two-year project will “revitalise Addu’s tourism and transform the city’s economic landscape, creating 2,082 new tourist beds, thousands of jobs and opportunities,” according to the economic development ministry.
Global interest rate hikes do not pose a threat to the Maldives, which has the ability to spend between US$150 million to US$300 million needed annually for external debt servicing and repayment, a finance ministry official told parliament’s public accounts committee. The average interest rate of the Maldives’ debt is 4.2% and 92% of foreign loans were taken at fixed interest rates, he explained.
The Maldives will seek “market-friendly” solutions to repay US$600 million due in 2026, the official said, assuring that the authorities have the experience and capacity to manage re-financing risks. Maldivian bonds are also performing relatively well with yields of 16% compared to 30% or higher for Pakistani bonds, he noted.
The Maldives does not face the danger of bankruptcy or reserve depletion, Finance Minister Ibrahim Ameer reiterated, noting that economic growth is projected at 7.6% for 2023 after a rapid recovery from the pandemic whilst debt-to-GDP ratio has fallen from 150% last year to 96% at present. Inflation is at 3.9%, below the forecast of 5.6%.
On Tuesday, Ameer told parliament that the government does not favour debt restructuring as credit rating agencies could downgrade the country’s selective default rating, which would create difficulties for both the state and private business in securing financing from foreign sources. The long-term fiscal strategy instead focuses on reducing spending and raising revenue, he said.
The Asian Development Bank and the Bank of Maldives signed a US$41 million loan finance package to support small and medium-sized enterprises (SMEs) and tourism businesses.
“This partnership with BML will deliver much-needed financing to the tourism sector and support climate projects and locally owned SMEs, including those owned and run by women,” said ADB Director General for Private Sector Operations Suzanne Gaboury.
According to the ADB, at least 60% of the funds will be earmarked for lending to SMEs with 5% allocated to women-owned or led firms. A concessional loan of up to US$9 million from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II) and a grant of up to US$1 million from ADB’s Asian Development Fund (ADF) –Private Sector Window (ADB-PSW) – which is part of the overall package – “will support BML’s capacity to support and promote climate change mitigation and adaptation projects focused on the blue economy.”
Customs collected MVR301 million (US$19.5 million) as revenue in February, down 8% from the same period last year despite an 18% increase in imports. Exports grew by 0.9% in February.
Goods worth MVR4.2 billion were imported last month.
The Maldives Industrial Fisheries Company launched a whistleblower hotline open to the public and staff. Suspected wrongdoing can be reported directly to the chief internal auditor or the chairman of MIFCO’s audit and risk committee.
Extra allowances and redundancy or retirement packages to board members of state-owned enterprises have been suspended pending a review of SOE human resource policies, the president of the Privatisation and Corporatisation Board told Mihaaru.
A harmonised, best practice-based HR manual or guideline is being drafted with the help of an expert consultant, he added.
Dredging began for land reclamation in a 20-hectare area of the Thilafushi lagoon, according to the Housing Development Corporation, the state-owned developer of artificial islands near the capital. The HDC plans to develop an industrial hub “and to streamline all industrial activities in the Greater Malé region to Thilafushi.”
The land reclamation project was awarded to China’s Capital Marine and Civil Construction Company in December.
More than 150 hectares are to be reclaimed to expand the island and lease land for industrial use, including cement packing, gas bottling, boat manufacturing and large-scale warehousing.
Earlier in the week, the HDC started a cleanup of the Thilafushi lagoon, which was littered with floating garbage and rusted boats.
The artificial island was used since 1997 as a landfill for burning waste. Open burning ceased in 2021 as part of a multi-donor project that includes a waste-to-energy treatment plant.
Tourists arrivals to the Maldives reached the milestone of half a million in the first quarter of 2023.
With five days to spare, arrivals in Q1-2023 exceeded the total of 482,978 tourist arrivals in the corresponding pre-pandemic period of Q1-2019.
A total of 500,597 holidaymakers visited as of Sunday, up 22% from the same period last year. The daily average stood at 6,501 with an average duration of stay of eight days.
Tourism Minister Dr Abdulla Mausoom expressed optimism of meeting the target of a record-breaking 1.8 million tourists this year.
Russia remains the top market with 60,590 tourists, representing a market share of 12.1%, followed by India (52,734), United Kingdom (45,545), Italy (43,869), and Germany (34,516).
As the tourism industry approaches the end of its traditional high season – which includes the busy Christmas-New Year period – the annual growth rate in tourist arrivals slowed from 31% in January to 16.7% in March.
Arrivals in January also grew 13.8% from pre-pandemic levels. Tourist arrivals registered a whopping 31% increase compared to January 2022 as Chinese holidaymakers returned after a hiatus of nearly three years. A total of 15,175 Chinese tourists arrived by 23 March.
There were 169 resorts, 894 guesthouses, 153 safari vessels and 13 hotels in operation as of last week with a combined bed capacity of 60,382.
A total of 1,675,294 tourists visited the Maldives in 2022, exceeding the government’s optimistic forecast for the year.