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Economy and business in the Maldives

Maldives has quickly become a middle-income country, driven by the rapid growth of the tourism and fisheries sectors.

Business of Maldives

High economic growth since the 1970s has led to a significant improvement in the standard of living in the Maldives. Since the turn of the millennium, living standards have been among the highest in South Asia. However, poverty is widespread, and around 16 per cent live below the poverty line (2016).

The Maldives has a developing economy based on fishing, tourism, boatbuilding and boat repair. Most of the population works with fishing, coconut harvesting and growing vegetables, melons, roots and tubers (cassava, sweet potatoes and yams) and tropical fruits.

Tourism

The development of tourism started in the early 1970s and has been a success ever since. To protect the island's culture from the negative effects of mass tourism, tourists are referred to their own so-called "hotel islands" or "tourist islands" with no other population than those working in the tourism industry.

According to COUNTRYAAH, tourism is the Maldives' most important industry, and in 2016, tourism accounted for 28 percent of GDP and 60 percent of foreign exchange earnings.

Fishing

Fishing is the country's second largest industry, but overall catches have dropped significantly in recent years. Fish, mainly dried, frozen or canned, is exported to Thailand, the United Kingdom, Sri Lanka, France, Algeria and Japan, among others. Most tuna is fished.

Agriculture

The agricultural sector is small, partly because of a lack of agricultural land. Maldives is largely dependent on food imports, and also imports a variety of industrial and finished goods.

Challenges

The government faces challenges such as diversifying the economy beyond tourism and fishing, reforming public finances, increasing employment opportunities and combating corruption and a growing drug problem.

In the longer term, the Maldivian authorities worry about the impact of erosion and possible global warming, as the country is the world's flatest, with 80 percent of the area one meter or less above sea level.

In 2015, Parliament passed a constitutional amendment that legalized foreign ownership of land under certain conditions.

Transport and Communications

The international airport (opened in 1981) is located on Hulele Island near the capital Malé. Tourists are also flown in to the three international airports at Gan (Addu Atoll), Kadhdhoo (Haddummati Atoll) and Hanimaadho (Tiladummati Atoll). The transport between the islands normally takes place by boat and there is regular traffic between some atolls.

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