Tag: fisheries

Expansion of economic activity in third quarter driven by tourism sector: MMA

Expansion of domestic economic activity in the third quarter of 2014 was “driven by the sustained growth of the tourism sector,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

“Total tourist arrivals to the country increased to 299,491 in Q3-2014, growing by 7 percent when compared to the corresponding quarter of last year while bednights grew by 5 percent,” the bulletin stated.

The central bank explained that the “difference in the growth rate of arrivals and bednights is explained by the fall in the average duration of a tourist visit from 6.0 days to 5.8 days during the period.”

Tourism receipts are meanwhile projected to reach US$594.9 million in the third quarter, an annual growth of 20 percent.

“In Q3-2014 the average operational bed capacity of the industry also increased by 4 percent when compared to Q3-2013 and rose to 26,921 beds, contributed by the opening of three resorts and thirty-three guesthouses during the period,” the bulletin revealed.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 70 percent when compared to Q3-2013, owing to the higher increase in bednights.”

However, tourist arrivals in November declined by 5.1 percent compared to the same period last year, according to statistics from the tourism ministry.

While tourist arrivals reached 89,778 guests last month, 94,584 arrivals were recorded in November 2013, with arrivals from Europe and the Asia Pacific region down 6.8 percent and 4.6 percent, respectively.

Industry insiders had previously noted that a recent increase in T-GST alongside the continuation of Bed Tax in November had contributed to fewer bookings.

The Russian market meanwhile continued to decline due to the weakening of the Russian economy, with Russian arrivals declining by 31.3 percent to 5,273 arrivals in November from 7,675 arrivals in November 2013.

“Arrivals from the country declined at an annual rate of 7 percent in Q3-2014, compared to a decline of 5 percent in arrivals in Q2-2014,” the bulletin stated.

The number of Chinese tourists – representing the single largest market share with 27 percent – declined by 4.9 percent.

However, total tourist arrivals from January to November increased 7.9 percent from 1,020,190 guests in the corresponding period last year to 1,101,113 in 2014.

The MMA’s quarterly bulletin observed that the Chinese market was the “single major contributor to arrivals growth” in the third quarter of 2014, increasing by 8 percent compared to the previous quarter.

“Meanwhile, arrivals from Europe (which constitutes over half of total tourist arrivals) registered a marginal increase of 2 percent in Q3-2014 compared to a 6 percent growth in Q2-2014, contributed mainly by the increase in arrivals from Germany and Spain,” the bulletin noted.

“While the UK market (the largest market from Europe) posted a sluggish performance owing to weak economic conditions, the German market, being the second major source market from Europe, registered a 7 percent growth (12% growth in Q2-2014). Both Germany and UK each accounted for about one-fifth of European arrivals during Q3-2014.”

Other sectors

The central bank noted that the fisheries sector “continued to be adversely affected by falling tuna prices that deteriorated further in the international market during the review quarter.”

The volume of fish purchased from local fishermen by fish processing and exporting companies in the third quarter registered an annual decline of 24 percent, the MMA revealed.

“Additionally, the poor performance of the fisheries sector was also reflected by the fall in both the volume and earnings of fish exports in Q3-2014, by 31 percent and 21 percent, respectively,” the bulletin explained.

The construction industry “continued to strengthen, as indicated by the strong annual growth in construction-related imports and commercial bank credit to the sector.”

Reflecting a 17 percent annual increase in commercial bank credit to the wholesale and retail sector as well as a 13 percent annual growth in private sector imports, the bulletin noted that trade activity also improved in the third quarter.

The rate of inflation in the capital meanwhile decelerated from 3.1 percent in the second quarter to 2.5 percent in the third quarter, “contributed primarily by the slower growth in food prices.”

“Meanwhile, inflation excluding the volatile fish prices also decelerated during the quarter at the same rate as total inflation, explaining the relatively stable fish prices during the year as a whole,” the bulletin observed.

Overall inflation remained “steady and low” at 5.0 percent, the central bank noted.

“However, food inflation registered a much lower rate of 0.2 percent in the review quarter, compared to 3.2 percent in Q2-2014 and 7.4 percent in Q3-2013.

“A large decline in prices was noted for vegetables, particularly onions, and can be attributed to the significant decline in onion prices in India, where 89 percent of onions are imported from. The slowdown in domestic food prices also reflect the easing of global food prices, which have been declining for the most part of 2014.”


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Local sustainable fisheries auditor appointed in Maldives

Sustainable fisheries consultants MacAlister Elliott & Partners have trained and appointed a Marine Stewardship Council (MSC) auditor in the Maldives.

Seema Ali will specialise in MSC assessment programmes, awarding sustainable fisheries certification to local companies in a move aimed to support employment in the Maldives.

“It is great to have someone based in the Maldives who can take on new MSC assessment programmes and also manage existing ones, for example through surveillance audits,” said Kat Collinson of MacAlister Elliott.

The Maldives’ skipjack tuna fishery is the first Indian Ocean tuna fishery to receive the MSC certification in 2012 for its low-impact technique where each wild fish is caught individually to reduce by-catch.

“Seema has embraced the role with great enthusiasm and she will also be well placed to take on new and existing MSC assessments in other parts of the Indian Ocean such as Thailand, Sri Lanka, Malaysia and Indonesia,” Collinson added.

Collinson undertook MSC Chain of Custody (CoC) surveillance audits of the Maldives skipjack tuna pole and line fishery while in the Maldives. CoC standards for seafood traceability ensures the MSC ecolabel is only displayed on seafood from sustainable sources, explained MacAlister Elliott.

Traditionally the Maldives’ primary industry, the fishing industry has declined in recent years, falling behind tourism and construction as the country’s third-largest industry.

The volume of fish catch in the country has been steadily declining for the past seven years. While approximately 185,000 tonnes of fish were caught in 2006, the number had dropped to about 70,000 tonnes in 2011.

During the past five years, the value of the nation’s fisheries industry declined from MVR489 million (US$31.7 million) to MVR321 million (US$20.8 million) with a corresponding fall of 3.3 percent of the economy to 1.1 percent in 2012.

Statistics released by the Maldives Monetary Authority this month showed that fish purchases declined by 44 percent to 2,124.7 metric tonnes between July 2013 and July 2014.

The Ministry of Islamic Affairs has recently started awarding halal certification to local fisheries companies in order to open up Islamic markets for export.

The move followed notification from the European Union that extension of the duty-free status of imported fish from the Maldives would be rejected due to he country’s failure to comply with international conventions concerning freedom of religion.

UK Supermarket chain Sainsbury announced earlier this year that it had introduced the country’s first certified sustainable tuna sandwich using the MSC eco-label.

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Government expenditure rose 58 percent in June, reveals MMA

Government spending in June rose 58 percent compared to the same period in 2013, the Maldives Monetary Authority’s (MMA) monthly economic review for July 2014 has revealed.

Total expenditure, excluding net lending, “amounted to MVR1.6 billion (US$103 million) in June 2014,” stated the report released on Sunday (August 31).

Total government revenue, excluding grants, meanwhile rose four percent in annual terms and reached MVR0.9 billion (US$58 million).

“The increase in total revenue during June 2014 was largely due to the 57 percent growth in import duty and the 9 percent increase in total goods and services tax,” the central bank explained.

“Meanwhile, non-tax revenue registered a decline owing to the 18 percent decline in resort lease rent. As for the increase in expenditure, it was mainly due to the 30 percent increase in current expenditure.”

Budget deficit

In early August, Finance Minister Abdulla Jihad revealed that the government was facing “great difficulty in managing the budget deficit” due to shortfalls in revenue.

The ballooning budget deficit – which Jihad warned could reach MVR4 billion (US$260 million) or 10.6 percent of GDP – could affect the government’s ability to pay civil servants, he said.

A fiscal deficit of MVR1.3 million (US$84,306) had been projected in the record MVR17.96 billion (US$1.1 billion) budget approved by parliament.

The budget was inclusive of proposed revenue raising measures – many of which had failed to materialise during the previous administration – amounting to MVR3.4 billion (US$220 million), or 19 percent of the budget.

“Expenses keep on increasing, even as we don’t receive any revenue. We did not get the expected revenue this year either,” Jihad said last month.

Despite parliament passing the measures in February – including tax and import duty hikes – Jihad predicted at the time that the anticipated revenue might not be realised in full due to compromises.

“We try to make regular salary payments even if we have to take loans in order to do so,” Jihad said.

The monthly review revealed that the total outstanding stock of government securities – treasury bills and bonds – increased 18 percent in July compared to the corresponding period last year, reaching MVR13.7 billion (US$888 million).

“The annual growth in government securities was contributed by the increase in the amount of T-bills issued by the government to manage its growing cash flow requirements,” the review explained.

The MMA had previously warned that shortfalls in revenue and overruns in expenditure could jeopardise the country’s debt sustainability.

In May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the untargeted subsidies” – and increasing revenue.

Tourism, fisheries and inflation

Tourist arrivals in July increased 20 percent from the previous month and 14 percent compared to July 2013, reaching 100,191 visitors, the review noted.

While bednights rose by nine percent in annual terms, the report noted that average duration of stay declined from 6.0 days in July last year to 5.7 days this year.

“With the increase in bednights, the occupancy rate also rose to 69 percent in July 2014 from 66 percent in the same period last year,” the review stated.

Fish purchases meanwhile declined by 44 percent to 2,124.7 metric tonnes compared to July 2013, the report revealed.

While the volume of fish exports fell by 54 percent, earnings on fish exports declined by 41 percent, which was “contributed mainly by the fall in export of frozen yellow fin tuna.”

The rate of inflation in the capital decreased to 2.4 percent from 3.5 percent in July 2013 and 3.6 percent the previous year, the review found, which was due to “the slower growth of food prices, especially fish, and the moderation in the growth in prices charged for rent and health services.”

The review noted that the trade deficit widened by 38 percent in July compared to the same period last year “due to the 27 percent increase in imports and the 34 percent decline in exports.”

Gross international reserves rose four percent from the previous month and 42 percent in annual terms, the review stated, amounting to US$497.6 million at the end of July.

“This mainly reflects the temporary increase in foreign currency transfers by the commercial banks in the review period,” the central bank explained.

“As for reserves in terms of months of imports, it also increased in both monthly and annual terms and stood at 3.2 months during the review month.”

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MMA reports increased business activity in second quarter

All sectors of the domestic economy with the exception of the tourism industry reported increased business activity in the second quarter (Q2) of 2014, according to the Maldives Monetary Authority’s (MMA) Quarterly Business Survey.

“With regard to the current level of employment, businesses across all sectors, except for those in the tourism sector, indicated an increase in Q2-2014 compared to Q1-2014,” the report observed.

“Looking ahead, all sectors anticipate an increase in employment in Q3-2014, reflecting the optimism shown by majority of businesses towards improved activity levels in this quarter.”

While businesses in the construction sector reported an increase in prices, the report noted that businesses in the wholesale and retail trade, manufacturing and tourism reported a fall in prices.

“As for business costs, businesses across all sectors experienced an increase in all labour related costs and other input costs in Q2-2014 when compared to Q1-2014, while they expect a further increase in costs in Q3-2014 as well.”

In the construction industry, the survey found that factors which limit growth opportunities included “delays in payment by clients and cost of raw materials.”

“Other significant factors include limited access to bank credit and foreign exchange, high cost of labour and finance; and shortage of materials,” the report noted.

The quarterly survey is conducted by the central bank for a “quick assessment of current business trends and expected future economy activity” by questioning senior managers “on the direction of change in various business variables such as sales, output, prices, exports, capacity utilisation and employment”.

“Survey forms were sent out to 135 large enterprises in four main sectors of the economy which are construction; manufacturing; tourism; wholesale and retail trade. A total of 65 enterprises responded to the survey which represents an overall response rate of 48 percent,” the report explained.

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Tourist arrivals increase 9 percent in June

Tourist arrivals increased 9 percent in June compared to the same period last year, reaching 83,347 guests, says the Maldives Monetary Authority’s (MMA) monthly economic review.

“However, this is a decline of 9 percent when compared to the previous month,” read the economic review for June.

“The annual increase in arrivals was contributed by the increase in the number of arrivals from both Asia and Europe. In June 2014, total bednights rose by 9 percent in annual terms while the average duration of stay remained unchanged at 5.6 days compared to June 2013.”

The occupancy rate meanwhile increased to 59 percent from 55 percent in June 2013.

Cash flow

The central bank also revealed that government securities – treasury bills and bonds – rose 18 percent in June compared to the same period last year, which was “contributed by the increase in the amount of T-bills issued by the government to manage its growing cash flow requirements.”

The monthly review noted that “the outstanding stock of T-bills held by commercial banks at the end of June 2014 increased both annually and monthly, whereas T-bills held by non-banks increased only annually.”

Finance Minister Abdulla Jihad had expressed concern last week with shortfalls in projected revenue posing difficulties “in managing the budget deficit” and affecting the government’s ability pay to civil servants.

“We try to make regular salary payments even if we have to take loans in order to do so,” he said, adding that the ministry was “trying to make the salary payments through any means possible.”

The MMA had previously warned that shortfalls in revenue and overruns in expenditure could jeopardise the country’s debt sustainability.

In May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the untargeted subsidies” – and increasing revenue.

Fisheries, inflation and reserves

“During June 2014, both the volume and earnings from fish exports increased compared to June 2013,” the monthly review revealed.

“As such, the volume of fish exports increased by 33 percent, while the earnings on fish exports rose by 6 percent during this period. The increase in the volume and earnings of fish exports was contributed mainly by the increase in export of frozen yellowfin tuna.”

The rate of inflation in the capital Malé meanwhile “accelerated slightly to 3.5 percent in June 2014 from 3.3 percent in May 2014,” which was “largely contributed by the acceleration in the growth of food prices, especially fish prices.”

In monthly terms, however, the rate of inflation “fell marginally” in June, “largely due to the fall in prices charged for furnishing, household equipment and maintenance, which off set the increase in fish prices during the review month.”

With imports increasing 19 percent while exports declined by 22 percent, the MMA revealed that the trade deficit widened by 27 percent in May compared to the same period in 2013.

Gross international reserves meanwhile “rose in both monthly and annual terms by 12 percent and 39 percent, respectively, and reached US$477.6 million at the end of June 2014.”

“This mainly reflects the temporary increase in foreign currency transfers by the commercial banks in the review period. As for reserves in terms of months of imports, it also increased in both monthly and annual terms and reached 3.1 months during the review month,” the report explained.

Quarterly business survey

The MMA’s Quarterly Business Survey for the second quarter of 2014 meanwhile noted that a majority of respondents from the tourism sector “indicated a decrease in total revenue, resort bookings and average room rates” during the current off-peak season.

While 10 percent of respondents indicated a decline in hiring and 83 percent reported no change, a majority reported “a decline in their financial situation” during the quarter.

“In analysing the factors which limit growth opportunities for businesses in the tourism sector, most businesses noted competition within the sector, issues with the regulatory framework, shortage of skilled labour and the high cost of finance as the most significant factors,” the survey found.

However, respondents expected revenue and average room rates to increase in the third quarter – “reflecting seasonal variations” – while most respondents expected “business costs such as labour and other input prices to increase in the next quarter”.

More respondents planned to increase capital investments than those who expected a decline, the survey found.

In July, the Ministry of Tourism revealed that tourist arrivals had reached half a million at the end of May, which was an 11.9 percent increase compared to the same period last year.

Moreover, the MMA revealed in its quarterly economic bulletin that tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million.

The bulletin noted that the 10 percent annual increase in arrivals was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

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Singapore Islamic authority approve Maldives halal certificates

Singapore has become the first country to accept the Maldives’ Halal certification, the Ministry of Islamic Affair has revealed.

Local media have reported the ministry’s announcement that the Islamic Religious Council of Singapore has accepted the certification, currently used by three Maldivian fisheries firms.

“After the approval of the certificate by Singapore, the market is looking forward to an even bigger expansion,” Islamic Minister Sheikh Mohamed Shaheem Ali Saeed told Haveeru.

The move to award Halal certification followed the EU’s decision to refuse the extension of duty-free status to Maldivian fish imports late last year due to the Maldives’ failure to adhere to international standards regarding freedom of religion.

The EU represents the single largest export partner for the Maldives.

The government promptly formed a Fisheries Promotion Board in order to target new markets, with Felivaru Fisheries, Maldives Industrial Fisheries Company (MIFCO), Horizon Fisheries all awarded Halal certificates in April.

Deputy Minister at the Ministry of Islamic Affairs Dr Aishath Muneeza told Sun Online that the certification had been approved for three years by the Singapore authority, expressing confidence that the development would open up international markets.

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President Yameen accuses opposition parties of inciting unrest, sabotaging economy

President Abdulla Yameen has accused opposition parties of attempting to foment unrest and sabotage the economy in his address to the nation on the occasion of the 49th Independence Day.

Speaking after a flag-hoisting ceremony at Republic Square last night, Yameen said the government would not allow the country to be plunged back into turmoil while it was enjoying a period of calm and stability.

“Opposition political parties are deliberately trying to disrupt stability by creating a spirit of unrest in society,” he said, adding that incitement of such fervour in the past had repeatedly threatened the country’s independence.

“I do not believe that failing to achieve the love and consent of the public should be a reason to plunge the nation into a deep pit of hatred and strife.”

Opposition parties were pushing for a tourism boycott and attempting to convince fish importers to cease purchasing Maldivian fish in a “deliberate attempt to create distress and anxiety,” Yameen alleged.

He added that “attempts to weaken the country economically” was tantamount to threatening independence.

Yameen also condemned alleged “efforts to create doubts” in the minds of foreign buyers of Maldivian fish and an alleged campaign to boycott tourism.

The current administration would “defeat all efforts to impoverish Maldivian citizens, build a peaceful generation of youth, and go forward in securing prosperity for Maldivians,” he said.

Speaking at a press conference on July 16, Fisheries Minister Dr Mohamed Shainee had accused the Maldivian Democratic Party of attempting to “destroy” the fisheries industry after the main opposition party issued a statement condemning President Yameen’s fisheries policy.

Shainee dismissed the party’s contention that the industry was stagnating and appealed against spreading “false information” to international media, suggesting that the fisheries industry was “too fragile” to be made the subject of adversarial politics.

Meanwhile, Tourism Minister Ahmed Adeeb told Minivan News last month that the government’s “total focus” was on the economy.

“We are not running behind our political opponents and we have stopped political rhetoric now – we have stopped responding to that but we are responding to economic issues,” he said.

Development projects

President Yameen went on to outline his administration’s development plans, referring to the special economic zone (SEZ) legislation currently before parliament as integral to the government’s economic policy.

An SEZ law would ensure investor confidence, increase foreign direct investment, create job opportunities, and mitigate the dependence on the tourism industry, Yameen explained.

Once the SEZ bill is enacted into law, he continued, one of the first projects to be undertaken would be the Ihavandhippolhu Integrated Development Project.

The ‘iHavan’ project would become “the main gateway” for development and prosperity in the northernmost atolls.

Plans for Addu City includes development of both the Gan international airport and the Hithadhoo regional harbour to spur economic activity, Yameen said.

A ‘mega project’ for development of the southernmost airport was in the pipeline while the government has decided to transfer the regional harbour under the Maldives Ports Limited (MPL) for modernisation, he revealed.

MPL would also take over the regional port in the island of Kulhudhufushi in Haa Dhaal atoll, he added.

The formulation of a master plan for the development of the Ibrahim Nasir International Airport (INIA) was meanwhile ongoing in collaboration with Singapore’s Changi airport, Yameen noted.

The changes envisioned in the master plan include a new terminal and a new runway, he said.

Moreover, a contract has been awarded for dredging and reclamation of Hulhumalé for development of a ‘youth city‘ in the artificial island as pledged during last year’s presidential election, Yameen said.

He stressed that the government would ensure that development projects would not threaten the country’s independence and sovereignty following criticism of the SEZ bill.

Yameen also revealed that criminal records have been cleared for 3,588 youth since he took office in November, adding that he has asked the newly appointed Prosecutor General Muhthaz Muhsin to introduce a new procedure to not prosecute first time offenders under an agreement signed with offenders.

Last night’s ceremony was meanwhile attended by former presidents Maumoon Abdul Gayoom and Dr Mohamed Waheed as well as senior statesmen – Abdul Sattar Moosa Didi and Ibrahim Rasheed – who worked with former President Ibrahim Nasir to secure independence from the British in 1965.

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Government signs agreement with IPNLF to promote fisheries

The Ministry of Fisheries and Agriculture has signed an agreement with the International Pole and Line Foundation (IPNLF) to promote fisheries in the Maldives through a number of projects.

Speaking at the signing ceremony, IPNLF Director John Barton stated that the foundation will assist the Maldives in various projects to develop fisheries in the country, as well as in training fishermen.

Fisheries Minister Mohamed Shainee revealed that the ministry is currently undertaking projects worth US$283,000 with IPNLF.

He further said that under the programme, the VilliMalé Training Center will be handed over to the Fisheries Association within the next week.

Shainee noted that working with the IPNLF would facilitate promotion of Maldivian fisheries in European countries.

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Expansion of economic activity in first quarter driven by tourism sector growth: MMA

Domestic economic activity expanded in the first quarter of 2014 “driven by the strong growth of the tourism sector during the ongoing high season of the industry,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

Total tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million, the central bank revealed.

“In Q1-2014, the average operational bed capacity of the industry also increased by four percent when compared to Q1-2013 and totalled 26,999 beds, contributed by the opening of more resorts and guesthouses during the period,” the bulletin explained.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 84 percent when compared to Q1-2013, owing to the higher increase in bednights.”

Arrival trends

On arrival trends in the first quarter, the bulletin noted that the 10 percent annual increase in arrivals was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

Chinese tourists accounted for 27 percent of guests during the first quarter of 2014. According to the Tourism Ministry, the Chinese market expanded by 24 percent with an additional 16,960 tourists compared with the same period of 2013.

Statistics from the Tourism Ministry show that 331,719 Chinese tourists visited the Maldives last year –  a 44.5 percent increase from the previous year.

Chinese tourists accounted for 29.5 percent of all tourist arrivals in 2013.

“Meanwhile, after recording three successive quarters of positive growth, arrivals from Europe (which constitute over half of total tourist arrivals) registered a marginal decline of two percent in Q1-2014, mainly due to a substantial fall in arrivals from Russia owing to its economic crisis and partly due to Easter calendar effects,” the bulletin continued.

“The poor performance of the Russian market (the third main market from Europe since Q2-2012) is in stark contrast to the double-digit growth rates exhibited by the Russian market throughout the last year.”

The bulletin noted that all major markets from Europe recorded a decline in arrivals. While arrivals from Germany – “the main source market from Europe” – and Italy both declined by four percent, arrivals from France declined by two percent.

“The better performance of UK market during the quarter is attributable to the sustained growth of the British economy since last year,” the bulletin observed.

Fisheries and construction sectors

The fisheries industry in the first quarter of 2014 “continued to be adversely affected by falling tuna prices in the international market since September last year,” the bulletin observed.

“This is reflected by the annual decline in fish purchases by collector vessels (12 percent) and the fall in both volume and earnings of fish exports in Q1-2014, by 26 percent and 6 percent, respectively,” the bulletin stated.

The construction industry however continued its “ongoing recovery” in 2014, the bulletin continued, which was “indicated by the strong annual growth in construction-related imports and bank credit to mainly residential housing construction projects.”

“Spurred by the strong performance of the tourism and other key sectors, activity in the wholesale and retail sector also picked up during the review period. This was reflected by a 13 percent increase in bank credit to the sector in the review period compared to Q1-2013, while private sector imports (excluding tourism) grew by 9 percent in the same period,” the bulletin read.

“Main driver of inclusive growth”

Meanwhile, a delegation from the World Bank led by the World Bank Vice President Philippe Le Houérou – in his first visit to the Maldives since assuming the post in July 2013 – met President Abdulla Yameen in late May and agreed to work with the government in developing a national strategy for fostering growth and consolidating public finances.

The discussion focused on “the need to reduce fiscal deficits, create a favourable investment climate for the private sector and delivery of key public services,” according to a press release from the World Bank.

“Maldives has enjoyed economic growth during the last decade and expects to achieve 4.5 percent growth in 2014,” Le Houérou was quoted as saying.

“But it still faces challenges, such as balancing public accounts while delivering public services on some 200 islands across hundreds of kilometres of the Indian Ocean. The issue is how Maldives can make the most of its potential in order to achieve inclusive and sustainable development.”

World Bank Country Director for Sri Lanka and Maldives, Francoise Clottes, noted the country’s “great success in developing a world-class tourism sector to take advantage of its breathtaking beauty.”

“This sector is expected to continue to grow and remains the main driver of inclusive growth and sharing prosperity, going into the future,” Clottes said.

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