The atolls of Maldives encompass a territory spread over roughly 90,000 square kilometres, making it one of the world’s most geographically dispersed countries. Its population of 328,536 (2012) inhabits 200 of its 1,192 islands, according to the Maldives government. Maldives’ capital and largest city Malé had a population of 103,693 in 2006. Maldives is the smallest Asian country in both population and land area. The Maldivian government began an economic reform program in 1989, initially by lifting import quotas and opening some exports to the private sector. Subsequently, it has liberalised regulations to allow more foreign investment. Real GDP growth averaged over 7.5% per year for more than a decade.
Today, the Maldives’ largest industry is tourism, accounting for 28% of GDP and more than 60% of the Maldives’ foreign exchange receipts. Fishing is the second leading sector. The Maldivian economy is to a large degree based on tourism. In late December 2004, the major tsunami left more than 100 dead, 12,000 displaced, and property damage exceeding $400 million. As a result of the tsunami, the GDP contracted by about 3.6% in 2005. A rebound in tourism, post-tsunami reconstruction, and development of new resorts helped the economy recover quickly and showed an 18% increase on 2006. The nominal GDP of the Maldives is $2.062 billion, while its GDP per capita was $6,336, as estimated by the IMF in 2011. The GDP per capita of Maldives is the highest among South Asian nations. As of 2008, 89 resorts in the Maldives offered over 17,000 beds and hosted over 600,000 tourists annually, according to the Ministry of Tourism.
For many centuries the Maldivian economy was entirely dependent on fishing and other marine products. Fishing remains the main occupation of the people and the government gives priority to the fisheries sector. As of 2010, fisheries contributed over 15% of the country’s GDP and engaged about 30% of the country’s work force. Fisheries were also the second-largest foreign exchange earner after tourism. Moreover, the opening up of the Exclusive Economic Zone of the Maldives for fisheries has further enhanced the growth of the fisheries sector. Agriculture and manufacturing continue to play a lesser role in the economy, constrained by the limited availability of cultivable land and the shortage of domestic labour. Most staple foods must be imported. Industry, which consists mainly of garment production, boat building, and handicrafts, accounts for about 7% of GDP. New industries that have since emerged include printing, production of PVC pipes, brick making, marine engine repairs, bottling of aerated water, and garment production.
Overall, Maldives is in many ways similar to Malta, which I wrote on in my previous article. The Maldives are a micro market, meaning that there are cities in other countries that have larger markets than Malta. While the market may be small it is also relatively rich. However, it is likely that businesses that come to this market are looking to service the foreigners that come there than the locals. There aren’t many domestic opportunities in the Maldives, but due to the constant stream of foreign traffic, the Maldives has a large foreign market that businesses can cater to.