The Foreign Affairs Minister of Republic of Maldives, Abdulla Shahid while reflecting on present day challenges, said Maldives is ‘combating the double threat of COVID-19 and Climate Change”.[1] This statement was made at the Commonwealth Foreign Affairs Ministers (CFAM) Meeting held on 14 October 2021. In this context, the paper will look in to the impact of pandemic and climate change on the economy of Maldives; steps taken by the leadership of the country at domestic level to address the issue and recent attempts to bring global attention to problems faced by small island nations.
Economic Recovery
After the pandemic hit, Maldives had to close down the backbone of the economy the tourism sector for five months in 2020 (March-July). Tourism sector account for seventy five percent of Gross Domestic Product (GDP) and the lookdown coupled with halt in construction activities had hit the economy. According to the World Bank, the Maldivian economy contracted by twenty eight percent in 2020.[2] Pandemic related restrictions also led to increase in debt levels. Maldives public and publicly guaranteed debt rose from $ 4.4 billion in 2019 to $ 5.6 billion in 2020.[3]
Maldives with little more than five lakh population, reported nearly 86,419 COVID 19 cases and 239 deaths so far. The Government of Maldives undertook various measures to minimise the impact of the pandemic. The government encouraged public to get vaccinated and implemented programmes to contain the spread. Other than establishing a National Emergency Operation Centre to tackle the pandemic at domestic level, the government closed borders and ensured implementation of strict lockdown. It also established a treatment system, trained 362 health workers and acquired required capacity to do nearly five thousand tests a day. So far more than eighty percent of the population over the age of 18 have been vaccinated fully as well as eighty one percent of population above the age of twelve.[4] Maldives is also one of the first countries in the world to vaccinate young children between the age of 12 and 17.[5] These steps taken by the government have helped resume sectors like tourism. From January 2021 to 15 September 2021, Maldives received 817,387 tourists. India remained as the top source of market for tourist arrivals (184,267) followed by Russia (165,453).[6]This shows that economic activities in Maldives are slowly picking up. Bilateral donors mainly India and international financial donors have helped to deal with immediate monetary and financial needs amid the pandemic. For example, India provided a soft loan of $250 million in September 2020, which is a largest bilateral financial support received by Maldives during the pandemic. In April 2020, the World Bank provided $7.3 million under COVID-19 Emergency Response and Health Systems Preparedness Project. Under the COVID-19 Emergency Income Support Project, it also provided $12.8 million in June 2020 and later extended in January 2021 with additional financing of $21.6 million.[7]
The issue of lopsided social and economic impact of the pandemic on small economies has been highlighted in virtual meeting of Small States Forum (SSF) held on 13 October 2021. The SSF is an important platform for addressing the specific needs of small states by the World Bank group. Some of the points of action emphasised at the meeting to tackle impact of the pandemic and climate change are as follows:[8]
In this context, Maldives has taken the concerns and vulnerabilities faced by small island nations to various forums in recent months such as CFAM Meeting. It asked for various support mechanisms including the Disaster Risk Finance Portal, and called for sovereign debt relief and access to international finance markets.[9]At the 75th Session of the UN General Assembly (UNGA) on 29 September 2021, Maldives also asked for the extension of G20’s debt service suspension initiative until the end of 2021.[10]
Climate Change
Another concern of Maldives, as a small island nation is climate change. In his speech at the 75th UNGA, the President of Maldives described the current global response to climate change as lukewarm and that can pose an existential threat to countries such as Maldives. Maldives has been advocating for implementation of Paris Agreement and trying to bring the focus of big countries on climate emergency faced by Small Island Developing States (SIDS). In its effort to address the issue, Maldives supported the Commonwealth Blue Charter, trying to phase-out single-use plastics by 2023 and have decided to work with Commonwealth Clean Ocean Alliance to combat marine plastic pollution. However, according to the Maldivian government, the global pandemic has halted efforts at tackling climate emergency, having disastrous consequences for Maldives as its highest land elevation is only 1.2 meters and 98 per cent of its national territory consists of the ocean.[11] Therefore, at the virtual Climate Vulnerable Forum, Maldives called for access to adequate, predictable and sustainable finance for vulnerable communities.[12]
Maldives as an active member of Alliance of Small Island States (AOSIS), also endorsed a new Leader’s Declaration on 22 September 2021, focussing on three main issues impacting SIDS, which are “climate change, sustainable development and the ocean”.[13] The declaration most importantly asked ‘G20 countries to take account of their subsidies to the fossil fuel industry, which generates the majority of global greenhouse gas emissions”[14]. The AOSIS a coalition of Small Island and low lying coastal countries, has been acting as a negotiating voice for SIDS within the UN. Maldives is also looking forward to play an important role in upcoming UN Climate Change Conference (UN CCC COP 26) to be held in Glasgow (31st October-12 November) in ensuring the concerns of SIDS are taken seriously by the global community. According to Maldives Parliament Speaker Mohamed Nasheed, climate change impact can lead to default on debt, mainly because, many member countries of Climate Vulnerable Forum (CVF) pays twenty percent of respective country’s’ budget for debt repayment and another thirty percent on adaptation’.[15]
Conclusion
Maldives, in recent months, has actively advocated in various forums about its immediate concerns on climate change and impact of pandemic on small economies. This has been evident from various statements given in forums such as Commonwealth, Bahrain Visions Forum 2020, at the UNGA and at Climate Vulnerable Forum Leaders’ Summit to name a few. Measures taken at vaccinating the population and opening of borders may help in economic recovery but how sustainable these measures will be in the future is the main concern of Maldives. Meanwhile, Maldives will try to advocate consistently at the global stage about the impact of climate change and will try to ensure global focus on issues faced by SIDS countries.
*****
*Dr. Samatha Mallempati, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
End Notes
[1]Ministry of Foreign Affairs, Republic of Maldives, “Statement by HE Abdulla Shahid, Minister of Foreign Affairs at the Commonwealth Foreign Affairs Ministers Meeting”, 14 October 2021, https://www.foreign.gov.mv/index.php/en/mediacentre/speeches/5872-statement-by-he-abdulla-shahid,-minister-of-foreign-affairs-at-the-commonwealth-foreign-affairs-ministers-meeting. Accessed on October 17, 2021.
[2]The World Bank, “Maldives Development Update April 2021: A Digital Dawn”, https://thedocs.worldbank.org/en/doc/93bdbd79b45eeb504743f4514f1095e1-0310062021/original/April-2021-Maldives-Development-Update.pdf. Accessed on October 18, 2021.
[3]Ibid.
[4]Ministry of Foreign Affairs, Republic of Maldives, “Spokesperson updates media on the latest developments in the government's activities”, 23 August 2021, https://presidency.gov.mv/Press/Article/25041. Accessed on October 18, 2021.
[5]Ibid
[6]Ministry of Tourism, Republic of Maldives, “Maldives Tourism Updates, 16 September 2021, https://tourism.gov.mv/dms/document/d00f579f136bd69fdbb9f6c8482c8bbd.pdf. Accessed on October 15 2021.
[7]The World Bank, “World Bank Committed to Support Maldives Post-COVID Recovery”, 27 April 2021, https://www.worldbank.org/en/news/press-release/2021/04/27/world-bank-committed-to-support-maldives-post-covid-recovery. Accessed on October 14, 2021.
[8]Communiqué from the Small States Forum October 2021, 17 October 2021, https://www.worldbank.org/en/news/statement/2021/10/17/communique-from-the-small-states-forum-october-2021. Accessed on October 19, 2021.
[9]Ministry of Foreign Affairs, Republic of Maldives, “Statement by HE Abdulla Shahid, Minister of Foreign Affairs at the Commonwealth Foreign Affairs Ministers Meeting”, 14 October 2021, https://www.foreign.gov.mv/index.php/en/mediacentre/speeches/5872-statement-by-he-abdulla-shahid,-minister-of-foreign-affairs-at-the-commonwealth-foreign-affairs-ministers-meeting. Accessed on October 17, 2021.
[10]Ministry of Foreign Affairs, Republic of Maldives , “Statement by His Excellency Abdulla Shahid, Minister of Foreign Affairs at the General Debate of the 75th Session of the United Nations General Assembly”, 29 September 2021, https://www.foreign.gov.mv/index.php/en/mediacentre/speeches. Accessed on October 16 2021.
[11]Ministry of Foreign Affairs, Republic of Maldives, “Statement by His Excellency Abdulla Shahid, Minister of Foreign Affairs at the Virtual Climate Vulnerable Forum Leader’s Event”, 7 October 2021, https://www.foreign.gov.mv/index.php/en/mediacentre/speeches. Accessed on October 16, 2021.
[12]Ibid
[13]Alliance of Small Island States, “Launch Of The Alliance Of Small Island States Leaders’ Declaration’, 22 September 2021, https://www.aosis.org/launch-of-the-alliance-of-small-island-states-leaders-declaration. Accessed on October 17, 2021.
[14]ibid
[15] Srinivasan Meera, “Climate Vulnerable Nations will go to COP26 with a View to restricting Debt”, The Hindu, 25 October 2021, P.13.