Tag: investment

Tourism sails on with luxury in fragile setting

Maldives tourism has made an impressive comeback since the 2009 global recession, and investment from China and India is expected to surpass precedents in coming years, finds a report from Care Ratings Maldives.

Nonetheless, the Maldives occupies a precarious market, and government controls limit foreign investment, the ratings agency found.

In 2005 Asia surpassed America as a tourist destination, coming in second to Europe. According to Care Ratings, Foreign Tourist Arrivals (FTA) surged this year as China’s economy flourished and European economies made a slow comeback. Chinese tourists are projected to account for 15 percent of Maldives FTA by 2020.

Plans are being made to expand capacity accordingly. The Maldives tourism sector will add 77 new resorts and increase bed capacity by 47 percent over the next three years, the report finds. Additional safari vessels are also expected to be added to the industry, which already boasts a fleet 150 strong.

By the end of 2011, the report projects the direct employments in tourism will have grown from 35,000 to 38,000. Fifty percent of these are likely to be expatriate hires.

Revenues are also expected to increase by 10 percent by the end of the year, claims the report.

Tourism is the largest contributor to Maldives national GDP and foreign currency, however the sector is restricted and vulnerable. The reports lists terrorism, global economic crisis, and limited land and human resources as obstacles to growth. It also points out that environment is a major factor of success.

“The tourism industry is capital-intensive in nature due to the high cost involved in leasing the land, developing the land and constructing a self-contained tourist resort,” states the report. Maldivian resorts frequently sell the appeal of the natural environments, but the Maldivian construction industry lacks the capacity to process raw materials.

Importing processed materials drives the average resort room construction cost up to US$30,000 to US$60,000, one of several factors which makes tourism in the Maldives a high-end market.

Human capital is mentioned as a complicating factor. Resort employment could account for one-tenth of the Maldivian population, 32 percent of which is unemployed. However, only half of resort employees are Maldivian.

Coincidentally, a recent study found that social stigma limited female Maldivian employment in the resort sector to 3 percent, a number far below the demographic’s potential.

Another challenge to growth is government oversight. “The industry now is very much regulated by the government of the Maldives,” states the report. “Tourism is now developed and managed according to country-wide policy based on a master plan.”

All Maldivian islands are government-owned, and resorts can only be leased for 25 to 50 years. Construction is limited by the “One Island One Resort” policy, which allows only one resort per island, and structures are limited to 20 percent of the land available.

Over the past three decades, the ministry has introduced three tourism master plans.

Although the report recognizes the complicating effect of government restrictions on developers and investors, it states attributes these plans with significant growth.

“The growth of the industry in the last couple of decades was mainly due to the efforts taken by the government to promote the tourism industry and the progress was largely on a planned path determined by the First Tourism Master Plan (1983-1992), the Second Tourism Master Plan (1996-2005) and the Third Tourism Master Plan (2007-2011).”

The Maldivian government also created the Maldives Marketing and Public Relations Corporation (MMPRC), which promotes the Maldives as a brand in the world tourism arena.

Last week, MMPRC recognized the value of the Asian travel market by co-hosting a travel agents networking event with GMR. In a nod to the region’s booming business culture, MMPRC MD Simon Hawkins pointed out the advantages of hosting meetings at Maldives resorts.

MMPRC aims to draw 1 million tourists to the Maldives by the end of 2012.This year, the Maldives reached 700,000 arrivals by September.

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Newly-decreed uninhabited islands to be resort, airport

The Bilhifeyshi area and Thoon’du area of Fuvahmulah have been officially recognised as uninhabited islands.

President Mohamed Nasheed signed decrees for both islands during a special meeting at Fuvahmulah, which addressed development projects for the upcoming South Asian Association for Regional Cooperation (SAARC).

The President said the two islands will be used for tourism. Development on these islands will be overseen by Fuvahmulaku Development Corporation Limited, a government company that was also created today.

Resort construction will begin at what was formerly Thoon’du area next week. Plans to build an airport at Bilhifeyshi area island are underway.

Development of these islands will be in accordance with the government’s social and economic development policies. The plan is said to provide more opportunities for local business investment and job growth.

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Maldives ranks second in South Asia in ‘ease of business’ index

Maldives is the second easiest country in which to do business in South Asia, according to the World Bank’s ‘Ease of Doing Business’ index for 2011, and 85th worldwide, an increase of 11 places.

The Maldives ranked poorly for getting credit (152), trading across borders (138), registering of property (147) and closing a business (125). It came middle of the field for protecting investors (74) and enforcing contracts (92). Without any corporate tax structure the country came first, although such bills are currently before the parliament.

Globally, Singapore came first followed by Hong Kong and New Zealand.

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President returns from Malaysia

Last Friday President Mohamed Nasheed returned from his official visit to Malaysia for the 6th World Islamic Economic Forum.

Before his return, the president visited the Maldives High Commission in Malaysia. He urged the staff to set an example for Maldivians living in Malaysia, and to participate in Malaysian cultural events.

President Nasheed also met with a delegation of Malay business people, where he spoke of the importance of broadening economic relations between the two countries.

He said Maldives is now open for business, and invited them to invest in the country. Senior officials from State Trading Organisation (STO) and Maldives Industrial Fisheries Company (MIFCO) were present at the meeting.

The president also met with a group of Maldivian students in Malaysia. He advised them to pursue their higher education and asked if they were having any “difficulties that needed attention.”

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President Nasheed informs South Korean industries on investment in the Maldives

As part of his visit to South Korea President Mohamed Nasheed met with executives of the country’s business sector, fisheries industry and the media.

In his meeting with representative from the business sector held at the Intercontinetal Hotel in Seoul on Friday, the president informed them of the business and investment opportunities in the Maldives.

President Nasheed spoke of the potential investment opportunities in green energy and housing projects in the Maldives.

He noted South Korea was a growing market for the Maldivian tourism industry and an important partner in the fisheries sector.

The president also met with the president of Korea Trade Investment Promotion Agency (KOTRA), Hwan-eik Cho at the KOTRA Centre to discuss investment in the Maldives, especially in the fisheries, energy and housing sectors.

According to the President’s Office, a number of South Korean companies expressed interest in investing in the Maldives.

He then met with the Director General of Distant Water Fisheries Bureau of the Ministry of Food, Agriculture, Forestry and Fisheries of South Korea, Lee Cheol Woo, and the Chariman of Korean Overseas Fisheries Association, Kyung-Nam Chang.

Present at the meeting were also representatives from Sajo Industries and Dongwon Industries, two South Korean companies working in the fisheries and business secotr.

President Nasheed spoke of the challenges faced by the Maldivian fishing industry, and said the government wanted to expand the overseas market for fish products so foreign companies could buy fish directly from Maldivian fishermen.

After his meetings, the president met with South Korean press and spoke mostly on the environmental challenges faced by the Maldives and his commitment to bring the issues of climate change to the international stage.

President Nasheed concluded his visit to South Korea on Friday.

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President Nasheed meets his South Korean counterpart

President Mohamed Nasheed met with South Korean President Lee Myung-bak last Thursday as part of his visit to Seoul for the B4E Summit.

President Nasheed and President Lee discussed bilateral relations between the two countries and spoke of ways to strengthen mutual cooperation.

President Nasheed said South Korea and the Maldives could work together especially in the areas of fisheries and the environment.

He also spoke of business and investment opportunities in the Maldives.

President Lee commended the Maldivian president for his efforts to bring the issue of climate change to a global platform and for his role in bringing democracy to the Maldives.

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Details of funds pledged at Donor Conference will only be available with donor’s consent

World Bank Country Director for Sri Lanka and the Maldives, Naoko Ishii, said details of the pledges made at the Donor Conference would only be released with consent from the donors.

Speaking at a press conference after the closing session of the conference yesterday, Ishii said some countries did not want to publicly announce the exact figures of their pledges.

She added that many of them had internal procedures which prevented them from announcing the figures at this time, and they needed to discuss and approve the pledges in their home countries before announcements were made.

Senior government officials said many countries’ fiscal years did not begin in January, like Australia and Japan, for example, which meant their pledges would not come into force until the beginning of their new fiscal year.

President Mohamed Nasheed said this year’s pledges surmounted the amounts of previous years because the international donor community did not have faith in the previous government.

He added that donors are confident of the democratic system of the Maldives and the support from the World Bank and International Monetary Fund (IMF), making this year the most successful Donor Conference to date.

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Vice President meets Saudi Crown Prince and members of RCCI

As part of his official visit to Saudi Arabia, Vice President Dr Mohamed Waheed met with the Crown Prince Sultan bin Abdulaziz.

Vice President Waheed said the Maldives and Saudi Arabia had always had close bilateral ties, and they discussed ways of improving relations between the countries.

Dr Waheed briefed the Crown Prince on the upcoming Donor Conference and asked the Saudi government to participate.

The Crown Prince assured Vice President Waheed that his country would participate in the conference and would continue to assist the Maldives.

Dr Waheed then met with the Riyadh Chamber of Commerce and Industry (RCCI).

The meeting was hosted by Chairman of RCCI Dr Abdulrahman bin Ali Al-Jeraisi.

Vice President Waheed briefed the RCCI on the conference and said Maldives was specifically looking for investors in the areas of housing, infrastructure, utilities and renewable energy.

Saudi Minister of State for Finance and Treasury Ahmed As-ad was also present at the meeting and said it was important to establish a trade link between the two countries.

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