Fishing at the head of the bridge
With its 1,200 islands spread over 90,000 km² of ocean, marine resources are the primary resource of the Maldives. Fishing is one of the traditional activities of the archipelago and is the historical industrial activity. The sector underwent a major revolution in the 1970s with the appearance of motorised "dhonis". These boats, built from coconut planks, fish for yellowfin tuna and bonito with longlines. Fishing used to be the largest contributor to GDP, but is now down to 10% due to the boom in the tourism industry. In 2015, growth in the fishing industry contracted for the first time due to dwindling resources and falling world prices. Nevertheless, it remains the country's sole source of exports.
Tourism, a key source of income
Tourism is the spearhead of the Maldivian economy. In 40 years, the country has grown from two island hotels opposite Male to 132 island hotels spread throughout the archipelago. The Maldivian government has created this unique concept to limit contact between the population and Western tourists. The phenomenon has spread like an oil stain, expanding in concentric circles. Investors immediately sought to occupy the larger islands in the vicinity of Malé. Technological advances allowed for further progress: seaplanes to replace the slowness of boats, desalination of sea water to guarantee drinking water, solar energy to compensate for oil-fired generators. In the 1990s, hoteliers were already faced with the scarcity of large islands. They compensated for this by increasing the number of beds in the resorts. The Maldives thus went from an average of 39 beds per hotel in the 1970s to 233 in 1995. This restructuring is combined with an orientation towards luxury tourism. Hotels competed with flamboyant ideas; rooms on stilts planted in the lagoon became the norm; services were ever more numerous. The number of arrivals has risen from a thousand in 1972 to 1.7 million in 2019. The islands are leased by the government, which signs leases averaging 21 years. It also receives a US$6 per night per person tourist tax and a US$10 per departing passenger airport tax. The share of tourism in GDP was 60% in 2020, or US$3.2 billion. This resulted in one of the highest per capita GDPs in Asia at US$10,627 in 2019. While tourism plays a beneficial economic role at the national level, it is much less so at the individual level. Less than 10% of Maldivians work in the tourism sector, with the vast majority of jobs being filled by immigrants from South Asian countries. Nevertheless, a law imposes a Maldivian management in the resorts. In reality, the positions are very often duplicated and held by better qualified Western staff. In 2010, the government decided to open the inhabited islands to tourists, so that the local population could benefit from the windfall. The very simple accommodation offer allows tourists who cannot afford a 5-star hotel to come and enjoy the Maldivian experience. Tourists are welcomed in the homes of local people and must abide by the rules in force: no alcohol is allowed, swimming on the bikini beaches is reserved for Westerners. This form of tourism allows you to divide the bill by at least three. It attracts a young clientele, mostly from countries in the region. So much so that some inhabited islands have been transformed into destinations, with a competitive hotel offer. The island of Maafushi has seen more than 60 guest houses and hotels bloom on its 12 hectares in barely 10 years.
COVID crisis and prospects
The COVID-19 pandemic has had a devastating effect on the Maldives economy. The archipelago closed to tourism from March 27 to July 14, 2020 and only 555,500 tourists entered the country that year, generating a 67.4% drop in visitation compared to 2019. GDP collapsed by 32% (compared to a +7% increase in 2019), the poverty rate increased by 5.1% to 7.3% of the population, hotel-related tax revenues plunged by 56%. The IMF is still optimistic about a return to pre-COVID GDP by 2022-2023. The government is banking on a strong recovery in tourism by keeping the destination open and massively vaccinating its population. By August 2021, 60.7% of the population had received 2 doses of vaccine. Hotels are investing heavily to reassure tourists with strict sanitary and disinfection protocols. Many have undergone independent certification or have documented and verified internal protocols. These efforts appear to be paying off as the country recorded nearly 400,000 arrivals in the first 4 months of 2021. The pandemic has highlighted the need to diversify the Maldivian economy. A sustainable fisheries development plan drawn up with Japanese assistance is being implemented. Its aim is to modernise the fleet and port structures, and to intensify aquaculture. The lagoons are suitable for the creation of grouper or lobster farms and the mangroves for crab farms. The promotion of food-producing agriculture is particularly on the agenda. On the tourism front, inter-atoll connectivity needs to be improved to facilitate the transportation of passengers and products. India is providing financial support for the Greater Male Connectivity Project, which is expected to de-saturate the capital. A system of bridges and causeways will link the islands of Villingili, Thilafushi and Gulhifalhu. After financing the bridge linking Malé to Hulhumalé, China is participating in the renovation and expansion of the international airport. The lengthening of the runway should make it possible to accommodate A380s and new parking spaces for aircraft are planned.
