Maldives Economy

The Republic of Maldives is a chain of 1,190 coral islands spanning an area of 90,000 sq. km in the Indian Ocean. The islands occur in twenty six natural atolls, but for easy administration the country is divided into 20 "atolls".

Though the Maldives is the smallest in the SAARC, the country’s literacy rate is 92%, the highest of the SAARC member countries. Life expectancy is the second highest at 64 years. Ownership of telephone and televisions are the highest at 20.8 persons per telephone and 48 persons per television set respectively. GDP growth is the second highest at 6.6% and the per capita income is the highest.

Tourism, Maldives largest industry, accounts for about 18% of GDP and more than 60% of the Maldives' foreign exchange receipts. Over 90% of government tax revenue comes from import duties and tourism-related taxes. About 350,000 tourists visited the islands in 1997. Fishing is a second leading growth sector. Agriculture and manufacturing continue to play a minor role in the economy, constrained by the limited availability of cultivable land and the shortage of domestic labor. Most staple foods must be imported. Industry, which consists mainly of garment production, boat building, and handicrafts, accounts for about 15% of GDP. Maldivian authorities worry about the impact of erosion and possible global warming on their low-lying country; 80% of the area is one meter or less above sea level.

GDP composition by sector:

agriculture: 22%
industry: 15%
services: 63%

While fluctuations of prices on world markets impact heavily on the Maldivian economy, the country’s economic openness and ability to adjust quickly to world market developments have transformed the Maldivian economy as one of the most dynamic economies in the  South Asia region with the highest real growth in the region. Apart from trade with our nearest neighbours, trade between Maldives and Singapore, the United States, the United Kingdom, Malaysia, Thailand and Indonesia has been increasing rapidly year by year.

A comparison of some selected  economic indicators for the member countries of the South Asian Association for Regional Co-operation (SAARC) - which comprise of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka - shows comparable economic progress achieved by the Maldives. Though the Maldives is the smallest in the SAARC, the country’s literacy rate is 92%, the highest of the SAARC member countries. Life expectancy is the second highest at 64 years. Ownership of telephone and televisions are the highest at 20.8 persons per telephone and 48 persons per television set respectively. GDP growth is the second highest at 6.6% and the per capita income is the highest.

Tourism, Maldives largest industry, accounts for about 18% of GDP and more than 60% of the Maldives' foreign exchange receipts. Over 90% of government tax revenue comes from import duties and tourism-related taxes. About 350,000 tourists visited the islands in 1997. Fishing is a second leading growth sector. The Maldivian Government began an economic reform program in 1989 initially by lifting import quotas and opening some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment. Agriculture and manufacturing continue to play a minor role in the economy, constrained by the limited availability of cultivable land and the shortage of domestic labor. Most staple foods must be imported. Industry, which consists mainly of garment production, boat building, and handicrafts, accounts for about 15% of GDP. Maldivian authorities worry about the impact of erosion and possible global warming on their low-lying country; 80% of the area is one meter or less above sea level.

Definitions and data sources

Definitions and data sources

Definitions and data sources

Definitions and data sources

The fisheries sector is one of the main foreign exchange earning sectors. Although the fisheries sector’s contribution to GDP has fallen from 16.11% (1984) of GDP to 11.8% (1994) it remains the third largest sector after trade and tourism. The value of the fisheries sector’s contribution has increased from Rf 85.0 Million in 1984 to Rf 149.5 Million in 1994. This is largley due to the replacement of traditional sail boats by mechanised boats and also to the use of Fish Aggregating Devices (FADs). Furthermore the recent opening up of the Exclusive Economic Zone (EEZ) of Maldives for fisheries and the increase in the number of vessels in this zone has enhanced the growth of the fisheries sector.