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GDP (2002): $639.5 million.
GDP growth rate: 6.0%.
Per capita GDP: About $2,279.
Inflation (2002): 0.9%.
Percentages of GDP (2002): Tourism--31%; distribution--14%; government--12%; manufacturing--9%; real estate--8%. fishing--7%; construction--3%; agriculture--3%; other--13%.
Trade (2002): Exports--$91 million: fish products, garments. Major markets--U.S., Sri Lanka, EU, Thailand, Japan (source: Maldives Customs Service). Imports--$393 million: oil, textiles and yarn, rice, cigarette, cement, engines for boats, televisions, aircraft parts, prefabricated buildings, vegetables. Major suppliers--Singapore, Sri Lanka, EU, India, Malaysia, U.A.E.
Economy of Maldives
The Maldivian economy is based on tourism and fishing. Of the Maldives' 1,191 islands, only 200 are inhabited. The population is scattered throughout the country, with the greatest concentration on the capital island, Male'. Limitations on potable water and arable land constrain expansion.
Development has been centered upon the tourism industry and its complementary service sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and used to improve technology in the agricultural sector.
GDP in 2002 totaled $640 million or about $2,200 per capita. The Maldives has experienced relatively low inflation in recent years. Real GDP growth averaged about 10% in the 1980s. It expanded by an exceptional 16.2% in 1990, declined to 4% in 1993, grew to 10% in 1998 and has since leveled to the 5% to 7% range.
The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million since 1997. The trade deficit declined to $208 million in 2002 from $233 million in 2001.
International shipping to and from the Maldives is mainly operated by the private sector with only a small fraction of the tonnage carried on vessels operated by the national carrier, Maldives Shipping Management Ltd. Over the years, the Maldives has received economic assistance from multilateral development organizations, including the UN Development Program, Asian Development Bank, and the World Bank. Individual donors--including Japan, India, Australia, and European and Arab countries (including Islamic Development Bank and the Kuwaiti Fund)--also have contributed.
A 1956 bilateral agreement gave the United Kingdom the use of Gan--in Addu Atoll in the far south--for 20 years as an air facility in return for British aid. The agreement ended in 1976, shortly after the British closed the Gan air station.
Tourism. In recent years, Maldives has successfully marketed its natural assets for tourism--beautiful, unpolluted beaches on small coral islands, diving in blue waters abundant with tropical fish, and glorious sunsets. Tourism now brings in about $198 million a year. Tourism and related services contributed 31% of GDP in 2002.
Since the first resort was established in 1972, more than 87 islands have been developed, with a total capacity of some 19,000 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 and is expected to top 500,000 in 2003. The average occupancy rate is 69%, with the average tourist staying 8 days and spending about $396.
Fishing. This sector employs about 11% of the labor force and contributes 7% of GDP or 10%, including fish preparation. The use of nets is illegal, so all fishing is done by line. Production was about 164,003 metric tons in 2002, most of which was skipjack tuna. About 50% is exported, largely to Sri Lanka, Japan, Hong Kong, Thailand, and the European Union. Fresh, chilled, frozen, dried, salted, and canned tuna exports accounted for 84% of all marine product exports, split fairly evenly between the products. Total export proceeds from fish were about $56 million in 2002. The fishing fleet consists of some 1,647 small, flat-bottomed boats (dhonis). Since the dhonis have shifted from sails to outboard motors, the annual tuna catch per fisherman has risen from 1.4 metric tons in 1983 to 15.9 metric tons in 2002.
Agriculture. Poor soil and scarce arable land have historically limited agriculture to a few subsistence crops, such as coconut, banana, breadfruit, papayas, mangoes, taro, betel, chilies, sweet potatoes, and onions. Almost all food, including staples, has to be imported. Agriculture provides about 3% of GDP.
Industry and manufacturing. The industrial sector provides only about 9% 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. The vast majority of Maldivian exports to the United States are garment products.