Maldives Economy

June 29, 2010Maldivesby EconomyWatch

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Maldives comprises an approximate population of 385,925 people spread over about 1900 islands. Mixed economy is one of the major features that include tourism, fishing and shipping industry. Struggling with the post-impact of Tsunami in 2004, Maldives economy has managed to find stable ground by achieving US $1.588 billion GDP and a growth rate of 6.6% till 2007.

About 99% of the territory of Maldives comprises water. No wonder, this has proved to be one of the major reasons for the success of tourism and fishing industry. Since the land is not fertile enough, agricultural possibility is restricted. The vegetation is limited to the growth of few tropical fruits, vegetables and root crops. Dearth of proper resources has resulted in poor manufacturing prospects of basic essentials and consumer goods. So, almost everything is imported in Maldives.

Mixed economy is an important aspect of the Maldives economy and is based on the prime activities of tourism, fishing and shipping. In 1989, the economic reform program implemented by the government lifted the import quota and encouraged exports to the private sector. Later on, the liberalized conventions allowed more foreign investments.

Vital statistics of economy of Maldives:

GDP (purchasing power parity) $1.588 billion (2007 est.) GDP (official exchange rate) $1.049 billion (2007 est.) GDP - real growth rate 6.6% (2007 est.) GDP - per capita (PPP) $4,600 (2007 est.) Unemployment rate Negligible% (2003 est.)

Economic segments of Maldives:

Tourism industry of Maldives:
The infrastructure of Maldives rests on able shoulders of the tourism industry. The taxes on this industry are siphoned in the infrastructure, for improving sectors of agriculture and technology. So, it is not surprising that tourism accounts for 20% GDP and over 60% of the foreign exchange. Almost 90% of the government revenue is generated due to the import duties and tourism related taxes.

Fishing industry of Maldives:
After tourism, the fishing industry is the second major economic sector in Maldives. The fish products are mainly exported; these are frozen fish, canned fish, dried fish or salted dry fish. The improved mechanization of the fishing vessels actually revolutionized the fishing industry of Maldives.

 

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