The Gross Domestic Product (GDP) of Maldives was worth $3.59 billion in 2016. The GDP value of Maldives represents 0.01% of the world economy. It averaged $1.04 billion from 1980 until 2016, reaching an all-time high of $3.59 billion in 2016 and a record low of $0.04 billion in 1981.
Export and Import
Maldives is the 112th largest export economy in the world. In 2016, Maldives exported goods worth $137 million and imported goods of around $2.12 billion, resulting in a negative trade balance of $1.99 billion.
The country is the leading export market for dried ice, mineral water, oxygen, and construction products. Dried fish, famous Maldivian fish, and canned fish remain Sri Lanka’s leading imports from the Maldives. A significant section of Maldivian exports comprises of vegetable and fruits, which is only beaten by Sri Lanka’s vegetable and fruit exports to West Asia. The country’s major imports are refined petroleum, furniture, aircraft parts, sawn wood and granite. According DCCI Research Department, total exports from Maldives to Bangladesh stood at $238.77 million in 2016-16 and imports were estimated at $26.695 million. Major export items in 2015-16 were woven garments, knitwear, agri-products, frozen food, and footwear. Major import items were products associated with chemical and other allied industries, plastic and rubber articles, pulp of wood products, textiles and textile articles, machinery, appliances, and electrical equipment.
The Maldivian economy is quite open. Trade in goods account for 70-80% of the GDP. Trade between India and Maldives is governed by the rules encompassed by the Indo-Maldives Trade Agreement signed on March 31, 1981. Under this agreement, major Indian exports to Maldives include rice other than basmati, sugar, fresh vegetables, drugs, fine chemicals, plastic and linoleum products, metal and machinery. India and Maldives also shares the “Most Favoured Nation” status.
Pakistan and Maldives extend credit facilities to each other, grant scholarships and collaborate in scientific and technological fields and in training of civil servants. They also work closely in training defence and security personnel. Both the countries have signed a number of MoUs on tourism, trade promotion, higher education and human resource capacity building. Former Prime Minister of Pakistan, Nawaz Sharif had emphasised the importance of economic cooperation and the need to enhance bilateral trade with Maldives. Pakistan also collaborates with Maldives in combating the threat of climate change. Maldives has a business friendly environment and is an ideal market for the small and medium enterprise (SME) sector. Sri Lanka works closely with Maldives in this sector.
Maldives is a leading player in tourism and in tuna production. It has invited Sri Lanka and other leading economies to invest in its key sectors. Ahmed Naseer, CEO, Maldives Capital Market Development Authority, informed that they have the potential for future development of over 60 islands which would require an investment of $2 billion. Additionally, they are planning airport development that will require an investment of $400 million. Sri Lankan partners, Palm Garden and Eden Hotel, jointly bought the Maldivian company Bodufaru Beach Resort Private Limited for a combined sum of $1.5 million. The company holds a 50-year lease for the island of Bodufaru Finolhu in Raa Atoll of the Maldives and the new owners plan to develop a tourist resort. An MoU on cooperation in the tourism sector has been signed between Pakistan and Maldives.
The robust economic growth has ensured a dramatic reduction in poverty. However, the growth which is primarily driven by the tourism sector has been highly cyclical and vulnerable to external shocks. It has failed to create adequate employment. The economy needs to shift to a more broad-based, sustainable and inclusive growth strategy, given its resource endowments and small population. Transport infrastructure is critical and improved transport will help to address the country’s connectivity issue and enhance business feasibility. An educated and skilled workforce is required to improve economic productivity. The country needs to address its unemployment issue and the situation demands the execution of a well-planned employment strategy.