People might know the Maldives for its clean blue waters, luxurious resorts and the millions of tourists that visit the archipelago but may not know that the small island nation continues to tussle for its economy and against poverty. Poverty in the Maldives dates back to the early 1980s when it became part of a list of the 20 poorest countries in the world. The 2004 tsunami further weakened the economy of the island nation, which consists of 1,192 tropical islands. A global financial crisis emerged in 2008, putting the country in a vulnerable position.
Statistics from the Asian Development Bank state that the GDP in the Maldives rose to $4.51 billion in 2018 from a mere $42.46 million in 1979. Wealth inequality does not persist in the Maldives and poverty rates vary across geographic locations. As the World Bank expected, the GDP growth slowed down from 6.7 percent in 2018 to 5.2 percent in 2019. Poverty in the Maldives is no longer a crisis, but the risks remain high.
Sustainable Development Goals
The country has been victorious in achieving a few of its Sustainable Development Goals (SDGs). Observations have determined that the annual rise in GDP is around 5 percent. The tourism industry, fisheries and other sources have played a significant role in strengthening the economy and employment rate. Half of the economy of the island nation comes from tourism and another 12 percent comes from the fisheries across the islands.
There might be people with very low incomes but there are no urban beggars or slum dwellers, even with an increase in the rural-urban migration rates. Recently, literacy rates in the Maldives have reached around 100 percent. There are no major causes of diseases and infections in the Maldives. The starvation rate is zero as well.
In 2018, the unemployment rate was 6.1 percent, with youth unemployment making up 15.3 percent. More than half of the working strata of people are employees in the tourism sector or fisheries, which often makes them fall sick. About 8.2 percent of the total population falls below the national poverty line.
The life spans of citizens have increased considerably thanks to the rapid and drastic expansion in economy and infrastructure. According to the World Bank, the Maldives’ life expectancy in 2018 reached 77.2 years. Meanwhile, life expectancy was only 69.2 years in the year 2000. The increase in life expectancy has been considerable. However, there is a certain limitation to that as well since the island nation has limited infrastructure and resources.
Although the GDP increases every year, this pattern in economic growth is quite irregular. New establishments in the tourism industry and infrastructure should bring the GDP to 5.5 percent in 2020.
There is no denying that the country has made drastic improvements to help the situation of poverty in the Maldives. However, the situation continues to be fragile and vulnerable. If the Maldives continues to grow its tourism industry and infrastructure, it should be able to continue to reduce poverty in the future.
– Astha Mamtani