The Maldives remains attractive for South African investors
By Dr Srimal Fernando ,
South Asia Correspondent for Foreign Exchange
In the vast blue Indian Ocean lies one of the most beautiful, unspoiled island destinations of our planet. The Maldives islands have been shaped by isolation, migration and with the vast ocean settings, white sandy beaches, turquoise reefs and palm trees.The Maldives Islands situated 500km from the Southern tip of both Sri Lanka and India comprises 1190 islands. It is formed by a double chain of twenty six natural ring like atolls stretching in a north-south direction off India’s Lakshadweep islands. The population of nearly 330,000 the country still remains one of the smallest independent nations in Asia. The people of the islands are widely dispersed across the atolls, with about 200 inhabited islands. Malé, the capital city of the country is located at the southern edge of North Male’ Atoll. One third of the population is located in this 1.77 square km. small island.
After gaining Independence from Britain in 1965 the country implemented economic reforms, beginning in 1989.The government administration of the Maldives actively pursued the policy on economic liberalization with emphasis on private sector investment. The decentralization policy of the country reduced economic disparities between the capital and the outer atolls. The economy of the country increased tremendously as a result of booming tourism industry and due to the mechanization of vessels used in fishing.
Significant progress has also been achieved in human and social development over the past two decades .As of 2002, the Maldives achieved universal primary education .Both public and private schools have made remarkable progress in the modern English-medium and the traditional system in the last decade. Maldives experienced a sharp decline in measured head count poverty from 23 percent to 8 percent during the period 1997 to 2004. The Maldives has recorded remarkable economic growth over the past two decades, especially compared with the rest of the South Asian countries. Sound macroeconomic and public investment policies and favorable external environment facilitated the rise in per capita income from USD 377 in 1978 to USD 2401 in 2004.According to the World Bank’s 2006 Investment Climate Assessment forecast Maldives offered one of the most business friendly environments in the region.
Tourism was introduced to the Maldives in the early 1970s with the opening of a 280 beds capacity two island resorts. The opening of Male’ International Airport in 1981 on adjacent Hulhulae Island which includes a seaplane base and a domestic base for internal transportation was an important landmark in the Maldivian travel industry .The country made the optimum out of almost 100 island resorts with a capacity of 24,862 beds by 2011. Tourism is the largest industry in the Maldives. Nearly 70 percent of the foreign exchange that flows into the country is through the tourism sector.
The Maldives has an Exclusive Economic Zone (EEZ) of 200 nautical miles and Fishing is the main traditional livelihood of the Maldivian. The fishing industry provides job opportunities to a vast majority of the Maldivian islanders .It is the second most important profitable sector in the economy which employs about 11 percent of the total work force. Mechanization of the traditional sailing dhoani in 1974 revolutionized the fisheries industry of the country. Of the fish catch sixty percent of the catch is skip jack tuna.
Agriculture is another sector in the Maldives which has been recently growing in quantity and quality. The government has introduced a range of incentives to enable farmers to boost production and attract direct foreign investment to the Agriculture sector. Coconut, banana, water melon chilies, cucumbers and papaya are the main agro based crops which are grown in the islands of the Maldives. Traditional industry consists of boat building and handicrafts. The industrial sector provides only about 7 percent of the GDP (Gross Domestic Production).
The telecommunication sector is well developed in Maldives. The county is linked to the world via satellite earth station - 3 Intelsat and the international submarine cable Fibre-Optic Link Around the Globe (FLAG). As of April 2011 there are 527,459 mobile phone subscribers in the country. It is further estimated that there are 71,700 (2008) internet users in the country.
The cultural affinities between the people of Maldives and her neighboring South Asian countries continue to provide the bedrock for bilateral relations. The institutional mechanism within the member states of the SAARC (South Asian Association for Regional Cooperation) remained active during the years. The Maldives will be the host nation for the seventeenth SAARC summit in 2011. The Maldives represents the dangers of climate change and is trying to move towards a new, green economy. The country aims to become the world’s first carbon neutral nation by 2020. Over the years, relations between Maldives and South Africa have grown in depth and dimension. The Maldives and South Africa have common positions on most of the international issues, be it human rights, eradication of poverty, UN reforms, ramification of globalization on trade or international terrorism. Although with wealth of experience between the two countries the potential for trade has not been fully exploited. Among the South Asian Countries the Maldives is one of the most attractive investment places for the South Africans.
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