Economy

Tourism and fisheries form the two key components of Maldivian economy. The country's shipping, banking and manufacturing sectors are also growing at a considerable pace. Among the South Asian nations, Maldives has the second highest per-capita GDP; major trading partners include India, Sri Lanka, Thailand, Malaysia and Indonesia.

Development of the infrastructure 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 ploughed into infrastructure and it is used to improve technology in the agricultural sector.

Economic Sectors

Tourism

Tourism is the largest industry in the Maldives, accounting for 20% of GDP and more than 60% of the Maldives' foreign exchange receipts. It powered the current GDP per capita 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.

In the present day, Maldives is successfully promoted for its natural assets for tourism. The beautiful, unpolluted beaches on small coral islands, blue waters and glorious 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 500,000 tourists visited the islands in 2003.

Fishing

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 liberalised regulations to allow more foreign investment.

This sector employs about 20% of the labour force and contributes 10% 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 5.6 in 1999.

Agriculture

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

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 16% of GDP.

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.