The Maldives — made up of a chain of around 1,200 islands — is a developing country with diverse potential in economic and other terms. The diversification of the tourism industry, which has led to the development of the tourist market over scores of islands, the diversification of the economy and the exploration of renewable energy sources are notable potentials for the Maldives, an upper-middle-income country with a GDP per capita of around $11000 and improved human development outcomes in social and other aspects. Among others, abundant marine resources and strategic location for trade routes can develop its economic and other sectors which may in turn lead to the well-being of its citizens further.
But there are economic, political and other challenges to the development of the Republic of Maldives, a South Asian nation. The challenges to the diversification of industries, high dependency on tourism and limited access to resources, needed for sustainable development, are some notable challenges. Tourism is the largest industry in the Maldives which accounts for 28 percent of GDP and more than 60 percent of foreign exchange receipts. Additionally, high levels of debt, limited economic opportunities, inadequate infrastructure and vulnerability to climate change impacts are crucial challenges. The existence of the Maldives can be severely threatened because of sea level rise. High cost of living, a lack of skilled human resources and reliance on imported goods also put notable development challenges.
The Maldives has also been politically unsettled since the electoral defeat of long-serving President Maumoon Abdul Gayoom in 2008. Non-state media faces pressure because of the Maldives Defamation Law 2016 and there are problems with the independence of the judiciary. Among others, the Maldives has geopolitical challenges. Both India and China, which have given the Maldives hundreds of millions of dollars in the form of loans and grants for its infrastructure and development initiatives, are trying to strengthen their presence in the strategically located islands. Maintaining a good relationship with the two geopolitical competitors can be a crucial challenge to the development in the days ahead in terms of not only its economic development but also political stability.
Different governments have taken policy based and other steps to address the challenges to the Maldives, which gained independence under an agreement signed with the United Kingdom in 1965, leading to improvements in economic and other terms. The Maldives has implemented various policies and plans (including the National Development Plan 2019-2023) to transform it into a prosperous, promote sustainable tourism and secure inclusiveness, climate resilience and the connected island nation, investing in renewable energy sources to reduce reliance on fossil fuels and providing training to improve workforce skills and employment opportunities. Additionally, the government has partnered with international organizations and donors to access funding and expertise in addressing its climate change adaptation and disaster risk reduction concerns.
But there are many limitations to the steps taken — though the efforts helped develop the country on various grounds. There remains a lack of sufficient funding and resources to development projects in the Maldives, limited capacity and expertise within government agencies to design and execute sustainable development strategies and insufficient collaboration and coordination between different government departments and stakeholders in addressing development challenges, leading to limited outcomes of development initiatives. Steps are crucial to address the challenges to the development in the Maldives. But addressing the challenges requires implementing development approaches emphasizing the diversification of the economy, increased investment in infrastructure and addressing climate challenges with emphasis on building resilience to environmental threats.
But strengthening the capacity to implement development initiatives, leveraging technology and innovation to improve connectivity and communication within the country, improving media freedom and securing political stability are crucial for its overall development and growth. Improved relations with China and India are also vital. While the Maldives needs to maintain peaceful relations with and secure development support from these countries with its political maneuver, increased collaborations with other countries and international organizations can greatly help its development initiatives.
