Economy of the Maldives

In ancient times the Maldives were renowned for cowries, coir rope, dried tuna fish (Maldive fish), ambergris (maavaharu) and coco de mer (tavakkaashi). Local and foreign trading ships used to load these products in the Maldives and bring them abroad.

Nowadays, the mixed economy of the Maldives is based on the principal activities of tourism, fishing and shipping.

Tourism is the largest industry in the Maldives, accounting for 28% of GDP and more than 60% of the Maldives' foreign exchange receipts. It powered the current GDP per capita[8] to expand 265% in the 1980s and a further 115% in the 1990s. Over 90% of government tax revenue flows in from import duties and tourism-related taxes.

Fishing is the second leading sector in the Maldives. The economic reform program by the government in 1989 lifted import quotas and opened some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment.

Agriculture and manufacturing play a minor role in the economy, constrained by the limited availability of cultivable land and shortage of domestic labour. Most staple foods are imported.

Industry in the Maldives consists mainly of garment production, boat building, and handicrafts. It accounts for around 18% of GDP. Maldivian authorities are concerned about the impact of erosion and possible global warming in the low-lying country.

Among the 1,190 islands in the Maldives, only 198 are inhabited. The population is scattered throughout the country, and the greatest concentration is on the capital island, Malé. Limitations on potable water and arable land, plus the added difficulty of congestion are some of the problems faced by households in Malé.

Development of the infrastructure in the Maldives is mainly dependent on the tourism industry and its complementary tertiary sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and it is used to improve technology in the agricultural sector.

Economy of Maldives
Aerial view of Malé
Malé, commercial centre of Maldives
Currency1 rufiyaa (Rf) = 100 laari
Calendar year
Trade organisations
WTO, SAFTA
Statistics
GDP$3.578 billion (nominal: 155th; 2017 est.)
$5.853 billion[1] (PPP: 162th; 2017 est.)
GDP rank165th (nominal) / 168th (PPP)
GDP growth
2.2% (2015), 6.2% (2016),
6.2% (2017e), 5.5% (2018f) [2]
4.551% (2017 est.)[3]
GDP per capita
$12,530 (2017 est.)[4]
GDP by sector
agriculture (4%), industry (23%), services (73%) (2012 est.)
2.10% (2018 est.)
Population below poverty line
16% (2008 est.)
Labour force
110,000 (2010 est.)
Main industries
fish processing, tourism, shipping, boat building, coconut processing, garments, woven mats, rope, handicrafts, coral, sand mining
135th (2017)[5]
External
Exports$309 million (2017)
Export goods
petroleum gas, fish
Main export partners
 Sri Lanka 50.1%
 US 10.7%
 France 7.8%
 Germany 6.8%
 UK 4.2% (2017)[6]
Imports$1390 million (2017)
Import goods
petroleum products, ships, foodstuffs, clothing, intermediate and capital goods
Main import partners
 China 19.7%
 Singapore 16.2%
 India 15.1%
 Malaysia 9.2%
 Sri Lanka 8.1% (2017)[7]
$742 million (2014 est.)
Public finances
$316 million (2004 est.)
Revenues$758 million (2010 est.)
Expenses$362 million; including capital expenditures of $80 million (2004 est.)
Economic aidN/A
Foreign reserves
$540 million (September 2016 est.)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Macro-economic trend

This is a chart of trend of gross domestic product of Maldives at market prices estimated [1] by the International Monetary Fund with figures in millions of rufiyaa.

Year Gross domestic product US dollar exchange Per capita income
(as % of USA)
1980 440 7.58 rufiyaa 3.11
1985 885 7.08 rufiyaa 3.85
1990 2,054 9.55 rufiyaa 4.34
1995 4,696 11.76 rufiyaa 6.29
2000 7,348 11.77 rufiyaa 6.77
2005 10,458 12.80 rufiyaa 5.33
2011 10,458 15.40 rufiyaa 7.43

For purchasing power parity comparisons, the US dollar is exchanged at 12.85 rufiyaa only. Mean wages were $4.15 per man-hour in 2009.

The Maldives has experienced relatively low inflation throughout the recent years. Real GDP growth averaged about 10% in the 1980s. It expanded by an exceptional 16.2% in 1990, declined to 4% in 1993, and, over the 1995–2004 decade, real GDP growth averaged just over 7.5% per year. In 2005, as a result of the tsunami, the GDP contracted by about 5.5%; however, the economy rebounded in 2006 with a 13% increase.[9]

The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million since 1997. The trade deficit declined to $233 million in 2000 from $262 million in 1999. In 2004 it was $444 million.

International shipping to and from the Maldives is mainly operated by the private sector with only a small fraction of the tonnage carried on vessels operated by the national carrier, Maldives Shipping Management Ltd.

Over the years, Maldives has received economic assistance from multilateral development organizations, including the United Nations Development Programme, Asian Development Bank, and the World Bank. Individual donors, including Japan, India, Europe, Australia, Arab countries (such as Islamic Development Bank and the Kuwait Fund) also have contributed. See: Economic Aid to Maldives

In 1956, a bilateral agreement gave United Kingdom access to Gan in Addu Atoll in the far south, to establish an air facility in Gan in return for British aid. However, the agreement ended in 1976, shortly after the closing of the Gan air station.

The following table shows the main economic indicators in 1980–2017.[10]

Year 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)
0.22 Mrd. 0.47 Mrd. 0.73 Mrd. 1.14 Mrd. 1.85 Mrd. 2.62 Mrd. 3.40 Mrd. 3.77 Mrd. 4.21 Mrd. 3.96 Mrd. 4.29 Mrd. 4.75 Mrd. 4.95 Mrd. 5.39 Mrd. 5.90 Mrd. 6.10 Mrd. 6.45 Mrd. 6.89 Mrd.
GDP per capita in $
(PPP)
1,470 2,563 3,460 4,670 6,835 8,916 11,359 12,365 13,597 12,581 13,413 14,599 14,964 16,017 17,248 17,532 18,245 19,151
GDP growth
(real)
18.8 % 13.8 % −4.0 % 7.4 % 4.8 % −13.4 % 25.8 % 8.1 % 9.5 % −6.6 % 7.1 % 8.4 % 2.3 % 7.1 % 7.6 % 2.2 % 4.5 % 4.8 %
Inflation
(in Percent)
28.9 % −9.2 % 15.5 % 5.5 % −1.8 % 2.5 % 3.5 % 6.8 % 12.0 % 4.5 % 6.2 % 11.3 % 11.9 % 3.8 % 2.1 % 1.0 % 0.5 % 2.8 %
Government debt
(Percentage of GDP)
... ... ... ... 39 % 42 % 37 % 36 % 39 % 48 % 53 % 52 % 53 % 53 % 54 % 57 % 66 % 69 %

Economic sectors

Tourism

As of 2007, the Maldives has successfully promoted its natural assets for tourism. The beautiful, unpolluted beaches on small coral islands, blue waters and sunsets attract tourists worldwide, bringing in about $325 million a year. Tourism and other services in the tertiary sector contributed 33% to the GDP in 2000.

Since the establishment of the first resort in 1972, over 84 islands have been developed as tourist resorts, with a total capacity of some 16,000 beds. The number of tourists (mainly from Europe) visiting the Maldives increased from 1,100 in 1972 to 280,000 in 1994. In 2000, tourist arrivals exceeded 466,000. The average occupancy rate is 68%, with the average number of tourists staying for 8 days and spending about $755.

It is recorded that over 1 million tourists visited the islands in 2014

Fishing

This sector employs about 20% of the labour force and contributes 3% of GDP. All fishing is done by line as the use of nets is illegal. Production in the fishing sector, was approximately 119,000 metric tons in 2000, most of which were skipjack tuna. About 50% of fish is exported, especially to Sri Lanka, Germany, UK, Thailand, Japan, and Singapore. Almost 42% of fish exports consist of dried or canned fish, and another 31% is frozen and the remaining 10% is exported as fresh fish. Total exports of fish reached about $40 million in 2000. The fishing fleet consists of some 1,140 small, flat-bottomed boats (dhonis). Since the dhonis have shifted from sailing boats to outboard motors, the annual tuna catch per fisherman has risen from 1.4 metric tons in 1983 to 15.2 in 2002.

Agriculture

Due to the availability of poor soil and scarceness of arable land in the islands, agriculture is limited to only a few subsistence crops, such as coconut, banana, breadfruit, papayas, mangoes, taro, betel, chilies, sweet potatoes, and onions. Agriculture contributes about 6% of GDP. Maldivians mostly use 'hydroponics' to increase food resources throughout the country. The most hydroponic-used islands are Maafahi, Haa Alif Atoll and Thoddoo, Haa Alif Atoll.

Industry

The industrial sector provides only about 7% of GDP. Traditional industry consists of boat building and handicrafts, while modern industry is limited to a few tuna canneries, five garment factories, a bottling plant, and a few enterprises in the capital producing PVC pipe, soap, furniture, and food products. There are no patent laws in the Maldives.[11]

Financial

The banking industry dominates the small financial sector of the Maldives. The country's seven banks are regulated by the Maldives Monetary Authority.[12] The Maldives has no income, sales, property, or capital-gains taxes, and has been considered to have the simplest tax code in the world.[13] The Tax Justice Network gave the Maldives a "secrecy score" of 92 on its 2011 Financial Secrecy Index - the highest score in that category of any actively-ranked country. However, the Maldives' minor market share put it near the bottom of the overall weighted lists.[14]

Shipping

Beginning in the 1990s, the Port of Male received over 10 million in loans from the Asian Development Bank designated for infrastructure upgraded.[15] The ADB notes that from 1991 to 2011, due to the loans, the ports annual throughput in freight tons equaled 273,000. By 2011 that number reached 1 million.[16] The ADB also provided training for port authority staff to increase efficiency. ADB and the Government of Maldives, in a joint report address ship turn-around, "What used to take about 10 days in 1991 was achieved in 3.8 days by 1997, and about 2.6 days by 2014".[17]

Other

Traditional economic activities such as mat weaving, jewelry making, thatch making and lacquer work are also found in Maldives.

Environmental concerns

There is growing concern towards the coral reef and marine life due to coral mining (used for building and jewelry making), sand dredging, solid waste pollution and oil spills from boats. Mining of sand and coral has destroyed the natural coral reef that once protected several important islands, now making them highly susceptible to the erosive effects of the sea. The destruction of large coral beds due to heat is also a growing concern.[18]

In April 1987, high tides swept over the Maldives, inundating much of Malé and nearby islands which prompted Maldivian authorities to take global climatic changes seriously. An INQUA research in 2003 found that actual sea levels in the Maldives had dropped in the 1970s and forecasts little change in the next century.[19] There is also concern over the questionable shark fishing practices in place in the island. Shark fishing is forbidden by law, but these laws are not enforced. The population of sharks has sharply decreased in recent years.[20]

The Asian brown cloud hovering in the atmosphere over the northern Indian Ocean is also another concern. Studies show that decreased sunshine and increased acid rain source from this cloud.[21]

Investment in education

The government expenditure for education was 18% of the budget in 1999. Both public and private schools have made remarkable progress in the last decade. Further, there are private institutions that are staffed by community-paid teachers without formal training who provide basic numeracy and literacy skills in addition to religious knowledge.

The modern schools are run by both the government and private sector, providing primary and secondary education simultaneously. As the modern English-medium school system expands, the traditional system is gradually being upgraded. By early 1998, more than 30 islands were equipped to provide education for grades, 8, 9, and 10. Some 164 islands provided education up to grade 5, 6, or 7. In Malé is the only school for grades 11 and 12, with a school in the southern most island of Gan scheduled to offer the final 2 years starting in 2002.

Seven post-secondary technical training institutes provide opportunities for youth to gain skills that are in demand. The World Bank has already committed $17 million for education development in 2000-04, and plans to commit further $15 million for human development and distance learning during this period. Over 2001-03, the ADB planned to support post-secondary education development in Maldives

Poverty, income and gender inequality

This is life (263615452)
Old street sellers in Malé

Maldives has successfully achieved their Millennium Development Goal (MDG) of halving the proportion of people living under the poverty line to a mere 1% as of 2011.[22] Starvation is non-existent, HIV rates have fallen and malaria has been eradicated.[23] Despite these accomplishments and progressive economic growth, developmental issues remain. In particular, the country needs to address income and gender disparities.[24] Development in Maldives has occurred predominantly in the capital Malé; islands outside the capital continue to encounter high poverty vulnerability, lower per-capita income, lower employment and limited access to social services.[24] A country-wide household income survey in 1997-1998 showed that the average income in the capital Malé was 75% higher than in surrounding islands.[23] Maldives’s Gini co-efficient stands at 0.41.[25]

Poverty and Income Disparity

The factors that have led to Maldivians falling into or remaining in poverty are:[23]

  1. Geography: Residents of the northern regions of Maldives tend to remain in poverty more than other regions due to the relatively lower level of development in the North;
  2. Health: Maldivians who do not work due to poor health remain in poverty possibly on account of lower accessibility to health services in the country;
  3. Young household members: Larger proportion of young family members results in a lower overall household income;
  4. Female household members: Lower female labour participation rate and therefore, households with a greater proportion of females will have lower household income.

The difficulty of accessing social services and infrastructure in the outer atolls has meant that geography is a key reason for poverty and income disparity in Maldives.[23] In islands far from the capital, there tends to be lack of production, inadequate use of fishery resources, low value chain development and insufficient credit for small-scale producers and entrepreneurs.[26] The scarcity of land and water, the underdeveloped farming practices and absence of support services in atolls has meant low production and thus low incomes in these regions.[26]

Gender Inequality

Maldives also faces gender inequality. In a nationwide survey in 2007, it was established that one in every three Maldivian women between the ages of 15-39 has been a victim of domestic violence.[27] The labour force participation rate of women decreased from 60% in 1978 to 37% in 2005.[28] Maldives faces skill shortages and human resource development constraints causing fewer women to be employed.[28]

Current Efforts

The government has recognized these issues of income and gender disparities and with the United Nations Development Programme (UNDP), Maldives has implemented policies that directly address these issues.[29][30] In 2011, President Nasheed said, “The most important facility for a country’s development is its people… and since women are half of the population in any country, for a certainty their full participation will speed up the pace of development.”[27]

See also

References

  1. ^ "Maldives". International Monetary Fund.
  2. ^ "World Bank forecast for Maldives, June 2018 (p. 153)" (PDF). World Bank. Retrieved 11 September 2018.
  3. ^ "Download entire World Economic Outlook database". International Monetary Fund. Retrieved 2018-02-20.
  4. ^ "IMF economies data - GDP per capita".
  5. ^ "Ease of Doing Business in Maldives". Doingbusiness.org. Retrieved 2017-01-25.
  6. ^ "Export Partners of Maldives". OEC.
  7. ^ "Import Partners of Maldives". OEC.
  8. ^ http://earthtrends.wri.org/text/economics-business/variable-638.html
  9. ^ "U.S. State Department estimate". Retrieved 2009-07-31.
  10. ^ "Report for Selected Countries and Subjects". Retrieved 2018-09-03.
  11. ^ "Gazetteer - Patents". www.billanderson.com.au.
  12. ^ "MMA". Archived from the original on 2015-04-02. Retrieved 4 March 2015.
  13. ^ "Which country has the simplest taxation system?". Slate Magazine. Retrieved 4 March 2015.
  14. ^ "Archived copy". Archived from the original on 2013-08-28. Retrieved 2013-08-12.CS1 maint: Archived copy as title (link)
  15. ^ adbadmin (24 April 2007). "Domestic Maritime Transport Project". Retrieved 17 October 2016.
  16. ^ Bank, Asian Development (16 August 2012). "Maldives: Malé Container Port Boosts Economy". Retrieved 17 October 2016.
  17. ^ http://www.finance.gov.mv/v2/uploadedcontent/posts/Post1650-102015.pdf
  18. ^ Sheppard, Charles R.C. (Sept 18, 2003) "Predicted recurrences of mass coral mortality in the Indian Ocean" Nature 425(6955): pp.294-296
  19. ^ Mörner, Nils-Axel; Tooley, Michael; and Possnert, Göran (2004) "New perspectives for the future of the Maldives" Global and Planetary Change 40: pp.177–182;
  20. ^ Bloody shark slaughter in the island paradise Der Spiegel (German), 09-15-2008.
  21. ^ Srinivasan, J. et al. (2002) "Asian Brown Cloud – fact and fantasy" Current Science 83(5): pp.586-592;
  22. ^ "UNDP Maldives: Poverty Reduction". UNDP Maldives. Archived from the original on 2011-12-03.
  23. ^ a b c d “Vulnerability and Poverty Dynamics in the Maldives.” Institution for International and Development Economics. 2007-08-02.
  24. ^ a b "UNDP's response to the Global Economic crisis" (PDF). /www.undp.org. Archived from the original (PDF) on 2011-12-01.
  25. ^ "Child Poverty in Maldives". Ministry of Planning and National Development, Maldives.
  26. ^ a b "Rural Poverty in the Republic of Maldives". Rural Poverty Portal. International Fund for Agricultural Development. Retrieved 23 February 2012.
  27. ^ a b Naish, Ahmed (27 November 2011). "Eliminating Gender Inequality Essential for Development, Says President". Minivan News. Archived from the original on 29 November 2011.
  28. ^ a b "Maldives: Gender and Development Assessment" (PDF). Asian Development Bank. 2007. Archived from the original (PDF) on 2012-04-24.
  29. ^ "UNDP Maldives Country Office Gender Mainstreaming Strategy" (PDF). UNDP Maldives. Archived from the original (PDF) on 2012-06-02.
  30. ^ "Fast Facts" (PDF). United Nations Development Programme, UNDP Maldives. Archived from the original (PDF) on 2011-12-03.

External links

Bank of Maldives

Bank of Maldives Plc (BML) is the national bank of the Maldives, established on November 11, 1982. The main business of the bank is retail banking, in addition to handling development banking activities in all the atolls. Its services include electronic banking, loan facilities, credit cards and debit cards.

BML has 29 branches, including four in Male, the capital, one in Ibrahim Nasir International Airport (Hulhule' Island) and one each in both Villingili ward and Hulhumale.BML won the JPMorgan Elite Quality Recognition Award 2011.

Capital Market Development Authority Maldives

The Capital Market Development Authority (CMDA) is the state entity responsible for the development and regulation of the securities market, and the capital market of Maldives. CMDA was established as an independent institution in 2006 with the passing of the Maldives Securities Act 2006. Prior to that, it was functioning as a separate Division of the Maldives Monetary Authority (MMA).

CMDA regulates and supervises the Maldives Stock Exchange (MSE), and also grants licenses to Stock Brokers or Dealing Companies, Investment Advisors, Rating Agencies, and Investment or Mutual Funds. While CMDA is the equivalent of the Securities and Exchange Commission in other countries, it has a dual role of further developing the capital market of the country, and protecting the interests of the investors through its regulations.

CMDA is governed by a Board of Directors, and daily operations are managed by the Chief Executive Officer (CEO). The current CEO, Ms. Nadiya Hassan was appointed in October 2017. The Board members are appointed as per Securities Act, and are represented by MMA, Ministry of Finance, Registrar of Companies, and the private sector. The President appoints all Board members and the Chairman.

CMDA is also the supervisory and regulatory authority of the Maldives Pension Fund, as per the Maldives Pension Act 2009.

Diving in the Maldives

The Maldives has become one of the world's best scuba diving destinations because of the white sand beaches, coral reefs, clear warm waters, numerous scuba diving sites and rich marine life.

Most holiday resorts in the Maldives have a scuba diving facility and there are a number of liveaboard operators offering scuba diving cruise holidays that take guests to many dive sites all over the Maldives.

Many scuba divers are keen to dive in the Maldives because of the presence of whale sharks, manta rays, eagle rays, reef sharks, hammerhead sharks and moray eels, as well as many smaller fish and coral species.

In 1998, the Maldives were severely damaged and much of the coral was bleached by El Niño. The coral have almost returned to their pre-tsunami condition.

Economic aid to the Maldives

Before the 1980s, the Maldives received limited assistance from UN specialized agencies. Much of the external help came from Arab countries such as Saudi Arabia, Kuwait, and the UAE, for use on an ad hoc basis rather than as part of comprehensive development plan. However, with the developmental commitment of President Maumoon Abdul Gayyoom, who assumed office in 1978, Maldives received an annual average of US$15.5 million in external assistance in the form of grants and loans.

In 1992, Maldives received approximately US$11.6 million in foreign aid from international agencies such as the World Bank, Asian Development Bank and individual countries, particularly Japan. Other than humanitarian aid, loans and grants went for such purposes as education, health, transport, fisheries, and harbor development.

The United Nations Development Programme is providing support to the Maldives for environmental projects.

Effects of climate change on island nations

Climate change is producing drastic changes to Earth processes and changing Earth's environmental status quo. Especially pertinent to human development is the threat of climate change on island nations. As sea levels continue to rise, island peoples and cultures are being threatened. As the former President of the Republic of the Marshall Islands, Christopher Loeak, noted "In the last year alone, my country has suffered through unprecedented droughts in the north, and the biggest ever king tide in the south; and we have watched the most devastating typhoons in history leave a trail of death and destruction across the region." Efforts to combat these environmental changes are ongoing and multinational. Particularly notable is the adoption of the Paris agreement at the UN Climate Summit in Paris in 2015, which by no means an unqualified success, is certainly a step in the right direction in regards to fighting the effects of climate by aiming to slow the pace of global warming.

Fishing industry in the Maldives

The fishing industry in the Maldives is the island's second main industry. According to national tradition in the words of former President Maumoon Abdul Gayoom, "Fishing is the lifeblood of our nation, it is inborn. From the soil on which we live, to the sea around us, it remains an integral part of our existence. Fishing, and our country and its people, [are] one and shall remain inseparable forever."

The Maldives has an abundance of aquatic life and species of fish. Common are tuna, groupers, dolphin fish, barracuda, rainbow runner, trevally and squirrelfish and many more. Aside from being of essential importance to the economy, fishing is also a popular recreational activity in the Maldives, not only among locals but by tourists. The islands have numerous fishing resorts which cater for these activities.

The Maldives is an archipelago in the Indian Ocean, located south west of the southern tip of India. Its population in 2008 was 386,000. There are twenty-six atolls containing 1,192 islets, of which two hundred and fifty islands are inhabited. The low level of islands makes them vulnerable to sea level rises.

List of Maldives-related topics

This is a list of topics related to Maldives. Those interested in the subject can monitor changes to the pages by clicking on Related changes in the sidebar.

Maldives Monetary Authority

The Maldives Monetary Authority (MMA) is the central bank of the republic of Maldives and was established on July 1, 1981, under the mandate provided by the "MMA Act" of 1981, located in the capital city of Malé. The current governor and chairperson is Ahmed Naseer and deputy governor is Ms. Aishath Zahira. It is a member of the Asian Clearing Union.

Its primary functions are to issue currency, regulate the availability of Maldivian rufiyaa (MVR), promote its stability, manage licenses, supervise and regulate institutions in the financial sector, formulate and implement monetary policy and to advise the government on issues relating to the economy and financial systems.

The MMA is a member of the Alliance for Financial Inclusion and is active in developing financial inclusion policy.

Maldives Stock Exchange

The Maldives Stock Exchange (MSE), is a private sector Stock Exchange located at 3rd Floor, H. Gadhamoo Building in Malé, Maldives.

A Securities Trading Floor (STF) was first established on 14 April 2002. It was operated by the Capital Market Development Authority (CMDA), the regulator. However, the Securities Act 2006 requires that CMDA invite offers from a private company to establish and operate a stock exchange. The Maldives Stock Exchange Pvt Ltd has been licensed to operate as a Stock Exchange since the 23 January 2008. As such the MSE started its operations effective from 24 January 2008.

The primary function of MSE is to facilitate companies raise capital through the issue of new securities. The MSE provides a regulated market for the trading of securities between investors. The MSE is also the centre for trade reporting and pricing of the stocks. It also provides clearing, settlement and depository services through a subsidiary, the Maldives Securities Depository (MSD)

There are ten listed companies on Maldives Stock Exchange as of 14 October 2016.

The Maldives Stock Exchange Index (MASIX) was published on 28 October 2004. Like other stock market indices, MASIX captures the overall movement in prices & changing expectations of the Maldives Stock Market. MASIX – represents the Maldives Stock Exchange.

Maldives–Sri Lanka relations

Maldives–Sri Lanka relations, or official and economic relations between the neighbouring Indian Ocean countries of the Maldives and Sri Lanka, have been positive since the Maldives became independent in 1965. The Maldives first established a mission in Sri Lanka in July 1965, and today has an embassy in Colombo. Sri Lanka has an embassy in Malé. Both countries were founding members of the South Asian Association for Regional Cooperation (SAARC) in December 1985.

Maldivian laari

The laari is a coin denomination issued by the Maldives as the subdenomination of the Maldivian rufiyaa since 1960. One rufiyaa is equal to 100 laari. It was issued in denominations of 1, 2, 5, 10, 25 and 50.The name of the currency is derived from lari. The earliest laari were bent silver wires reminiscent of the early coins from Lar.

The Maldive Islands have been using laari for centuries but they were first described by François Pyrard de Laval, who lived on the islands 1602–1607.

The current coins are made out of a range of metals, including nickel, brass, cupronickel and aluminium. The coins are issued by the Maldives Monetary Authority (MMA).

Maldivian rufiyaa

The Maldivian rufiyaa (Dhivehi: ދިވެހި ރުފިޔާ; sign: Rf or .ރ; code: MVR) is the currency of the Maldives. The issuance of the currency is controlled by the Maldives Monetary Authority (MMA). The most commonly used symbols for the rufiyaa are MRF and Rf. The ISO 4217 code for Maldivian rufiyaa is MVR. The rufiyaa is subdivided into 100 laari.

The name "rufiyaa" is derived from the Sanskrit रूप्य (rūpya, wrought silver). The midpoint of exchange rate is 12.85 rufiyaa per US dollar and the rate is permitted to fluctuate within a ±20% band, i.e. between 10.28 rufiyaa and 15.42 rufiyaa as of 10 April 2011.

Ministry of Tourism (Maldives)

The Ministry of Tourism is part of the Maldivian Executive branch responsible to develop the Maldivian tourism industry. The tourism ministry monitors the tourism sector and regulates it.

The tourism ministry was introduced in 1965 shortly after the independence of Maldives by Ibrahim Nasir the second president of Maldives.

South Asian Free Trade Area

The South Asian Free Trade Area (SAFTA) is an agreement reached on January 6, 2004, at the 12th SAARC summit in Islamabad, Pakistan. It created a free trade area of 1.6 billion people in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka (as of 2018, the combined population is 2.08 billion people, about 27% of the world's population of 7712897000 ). The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016. The SAFTA agreement came into force on January 1, 2006, and is operational following the ratification of the agreement by the seven governments. SAFTA requires the developing countries in South Asia (India, Pakistan and Sri Lanka) to bring their duties down to 20 percent in the first phase of the two-year period ending in 2007. In the final five-year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations in South Asia (Nepal, Bhutan, Bangladesh, Afghanistan and Maldives) have an additional three years to reduce tariffs to zero. India and Pakistan ratified the treaty in 2009, whereas Afghanistan as the 8th memberstate of the SAARC ratified the SAFTA protocol on 4 May 2011.

Tourism in the Maldives

Tourism is the largest economic industry in the Maldives, as it plays an important role in earning foreign exchange revenues and generating employment in the tertiary sector of the country. The archipelago of the Maldives is the main source of attraction to many tourists visiting the island country..

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