Maldives News Bulletin - Volume 141

Economic diversification has been a central topic for successive Maldivian governments. The need to reduce reliance on the tourism-driven economy became particularly evident during the COVID-19 pandemic when the nation’s primary industry was forced to shut down, leaving no other sectors to cushion the impact. Despite this clear warning, meaningful action to diversify the economy has been lacking—until now.

This administration is demonstrating a concrete commitment to economic diversification. Early in its term, efforts began to establish an international financial sector in the Maldives.

Among the government’s key initiatives is the introduction of international bunkering services, a vital step in diversifying the economy. The first of these services was inaugurated in the northern region of the Maldives, specifically in Hoarafushi, Haa Alifu Atoll. The inauguration ceremony was attended by Minister of Economic Development Mohamed Saeed and the service was inaugurated by five Members of Parliament representing the atoll.

The State Trading Organisation (STO) has taken the lead in providing these international bunkering services. According to STO, the service is already attracting bookings. To facilitate this, the company has introduced two vessels to the Maldives, each with a capacity of approximately 4,000 tonnes.

A symbolic water salute was given to the first ships servicing the bunkering operation. The initial fuel supply was provided to the MSS ship, the YC Barrier, by the Marine Bella—one of the vessels brought in for this purpose.

Leveraging the Maldives’ Strategic Location

The Maldives is positioned along one of the busiest maritime routes globally, with hundreds of ships carrying billions of dollars’ worth of cargo passing daily. Up until now, these vessels have relied on neighboring countries like Sri Lanka, India, and Singapore for bunkering services, due to the lack of “low sulfur fuel” availability in the Maldives.

With the introduction of bunkering services in the Maldives, the country is poised to become a key destination for ships in need of refueling. The necessary low sulfur fuel and diesel will now be readily available within the country.

A New Industry with Major Economic Potential

The government estimates that the new bunkering industry could generate an additional USD 400 million annually, contributing significantly to the Maldives’ economy.

Maldives Ports Limited (MPL) has established Northern Maritime Services to provide various other maritime services related to bunkering. These services include pilotage, docking, crew changes, and vessel maintenance, all aimed at attracting foreign currency into the economy.

The launch of bunkering and related maritime services marks the emergence of a significant new industry in the Maldives. This initiative is expected to become one of the largest contributors to the country’s economy in the years to come, providing a sustainable source of income beyond tourism.

SOURCE : PSM

The Ministry of Climate Change, Environment, and Energy has revealed that a study on a sustainable eco-tourism project in Keylakunu, Haa Dhaalu Atoll, is currently underway.

The government initiated its eco-tourism efforts in January this year and is committed to advancing the project swiftly. To launch the eco-tourism initiative in Keylakunu, the ministry has invited tenders for consultancy to develop a feasibility assessment for the island. Initially, bids were to be submitted by September 22, but the deadline has now been extended to September 26. The bids are scheduled to be opened on the same day.

The eco-tourism development in Keylakunu, which spans 80.23 hectares, was approved by President Dr. Mohamed Muizzu following discussions with the Cabinet. The project will ensure the protection of the coral reefs and lagoons around the island, aligning with environmentally sustainable practices.

Keylakunu and its surrounding lagoon were declared protected areas on December 25, 2018, under a conservation programme that adheres to international standards.

The island is known for its rich greenery, especially on its eastern side, which features mangroves and wetlands. The area hosts a large population of small-leaved yellow mangroves, as well as orange and red mangroves, whose roots form wetland networks. The beaches of the island are also important nesting grounds for a significant number of turtles.

^{SOURCE : PSM}

The Government of India has granted a one-year extension to the USD 50 million Treasury Bill, which matured on 19 September 2024, through the State Bank of India, Malé. This is the second rollover granted by the Indian Government this year, following the first rollover of a USD 50 million Treasury Bill on 13 May 2024.

Government of India’s decision to grant this extension came following a request to that effect made by Foreign Minister Moosa Zameer during the discussions held between the two Governments at the recent visit of the Minister of External Affairs of India Dr. S. Jaishankar to the Maldives from 9-11 August 2024.

The Government of Maldives is highly appreciative of the generous support that the Government of India has been providing to the Maldives in the form of budgetary support. This extension comes at a pivotal moment as the Government of Maldives is implementing a strong fiscal consolidation program to address the pressing economic challenges.

The Government of India has once again demonstrated the high value it places on this enduring partnership. The Government of Maldives looks forward to continuing this collaborative partnership for the mutual benefit and prosperity of the people of both nations.

^{SOURCE : Ministry of Foreign Affairs}

Minister of Construction and Infrastructure Dr. Abdulla Muththalib has emphasised the need for a skilled and youthful generation to ensure economic growth. The remarks were made by the minister during the graduation ceremony for the students of Maldives Polytechnic. The Minister of Higher Education, Labour and Skills Development Dr. Maryam Mariya also attended the ceremony.

In his address, Minister Dr. Muththalib highlighted the importance of vocational training to promote the field of labour. The minister underscored the significance of acquiring skills in various fields, regardless of seeking education in a particular field, in order to utilise the employment opportunities available in the country. He stated that skilled and youthful individuals play a pivotal role in bolstering the country’s economic growth.

Furthermore, Minister Dr. Muththalib emphasised the importance of seeking higher education from fields which can benefit the country. The minister urged all individuals to seek education in fields which may become beneficial in the future, requesting all to learn essential work-related skills.

During the ceremony, Chief Executive Officer (CEO) of Maldives Polytechnic Zooshan Kamaludeen shed light on the ongoing efforts being exerted to further develop Maldives Polytechnic. Highlighting the efforts to change the centre into a college, Zooshan stated that Maldives Polytechnic launched technical courses in Alifushi, Raa Atoll and in Dhidhdhoo, Haa Alif Atoll, aiming to expand its services nationwide.

The ceremony saw the graduation of 431 students from the institute, who were enrolled in 34 various courses offered from Certificate Level 1 to Diploma. This includes 324 male students and 107 female students. It also includes students who completed their studies at campuses situated on four islands. The top 22 students from the courses were awarded as well.

^{SOURCE : PSM}

The Ministry of Fisheries and Ocean Resources has announced that a team from the World Bank will be visiting the Maldives in November, to create a plan to observe the works pertaining to sustainable fishing in the Maldives and areas in which financial assistance can be provided.

The ministry stated that discussions have been ongoing with relevant authorities, to further develop and enhance the fisheries sector. As such, Minister of Fisheries and Ocean Resources Ahmed Shiyam has held discussions with the World Bank’s Singapore-based Practice Manager for Environment, Natural Resources and Blue Economy in East Asia and the Pacific Region Ann Jeannette (AJ) Glauber. The discussions primarily focused on the fields in which the World Bank can provide financial assistance to the Maldives.

During the discussions, Minister Shiyam highlighted the progress of the World Bank-funded TRANSFORM project and explored how the World Bank can further support the development of the Maldives’ fisheries sector. Key topics included innovative solutions to enhance the sector and finding ways to capitalise on the Maldives’ sustainability efforts. The minister stated that the 65% of the unprocessed fishes purchased by the Maldives Industrial Fisheries Company Limited (MIFCO) were exported, revealing the governments’ target to reducing this amount, by increasing the amount of processed fish.

Furthermore, Minister Shiyam disclosed that efforts are underway to establish fish processing factories in three regions across the Maldives. The minister reiterated President Dr. Mohamed Muizzu’s efforts of ensuring that at least 35% of expenses incurred for importing oil used by companies, are changed to renewable energy sources.

The ministry stated that the World Bank can provide financial assistance in areas such as environment and women empowerment, which are linked to the fisheries sector and sustainability of the field. As such, it disclosed that a team from the World Bank will be visiting the Maldives in November, to create a plan to observe the works pertaining to sustainable fishing and areas in which financial assistance can be provided.

Additionally, the ministry held discussions with the International Fund for Agriculture Development (IFAD). The discussions centred on teh areas in which IFAD can provide financial assistance to support the development of the Maldives’ fisheries sector. Minister Shiyam shared President Dr. Muizzu’s vision for fisheries development, particularly focusing on the mariculture sector, as well as the works undertaken by the ministry to achieve this goal. The minister also emphasised the important role of women in small-scale fish processing and highlighted the need for further improvements in the industry.

^{SOURCE : PSM}

Minister of Cities, Local Government, and Public Works Adam Shareef Umar has announced that ID card and passport services will be introduced in all atolls during the current presidential term. His remarks came following the launch of ID card services in Villingili, Gaafu Alifu Atoll, marking the first time such services have been made available outside the capital, Malé.

Minister Adam Shareef highlighted that this expansion aligns with President Dr. Mohamed Muizzu’s pledge to bring essential government services closer to the people through decentralization. The launch in Villingili is a testament to this commitment, he stated.

He further emphasised that establishing a system for councils to manage centralised services like ID card and passport issuance is a key aspect of President Dr. Muizzu’s vision. This move demonstrates the increasing empowerment of local councils under the president’s leadership. The minister reiterated that ID card and passport issuance services will be rolled out across all atolls during this term.

Minister Adam Shareef also mentioned that local councils have shown strong interest in fulfilling the president’s promise of providing these services in provincial areas, with many councils offering substantial cooperation in this effort.

The minister noted that this collaboration between the government and local councils reflects the creation of an environment where both can work effectively together, further strengthening multi-party democracy in the Maldives.

^{SOURCE : PSM}

Vitol, a key partner assisting the State Trading Organisation (STO) in launching bunkering services in the Maldives, has praised the government’s decision to enter the sector. In an interview following the inauguration of the international bunkering service in the northern Maldives, a Vitol representative described the move as a strategic and wise decision by both the Maldivian government and STO.

The Vitol representative emphasised the company’s extensive experience in the bunkering industry and expressed confidence that this collaboration with STO would lead to an environmentally friendly and profitable project. He highlighted the Maldives’ strategic geographical location, noting its potential to benefit significantly from expanding its oil business into bunkering.

Vitol is actively supporting STO in various aspects of providing bunkering services and is also promoting the Maldives within the global banking industry.

In addition, Vitol plans to promote the Maldives as a bunkering destination at the Singapore International Bunkering Conference (SIBCON), one of the world’s largest bunkering events, next month. The representative emphasised that this event will provide significant exposure for the Maldives within the sector, potentially attracting considerable interest and investment.

^{SOURCE : PSM}

Chief Executive Officer (CEO) of Maldives Ports Limited (MPL) Mohamed Wajeeh Ibrahim has revealed that the sea-to-air cargo services have been expanding, noting that this is a significant initiative to bolster economic growth.

MPL has been providing sea-to-air cargo services in collaboration with Turkish Airlines and Qatar Airways. It has entered an agreement pertaining to the provision of sea-to-air cargo services with the two airlines as well.

Speaking about the positive response received following the launch of sea-to-air cargo services, MPL’s CEO Wajeeh stated that within two days, seven 40-foot containers were dispatched to Europe. He noted that this was a business conducted in several countries, highlighting numerous opportunities to expand the services. Wajeeh acknowledged the government’s support in facilitating the expansion of services and the effective arrangements made by airports to ensure efficient provision of services.

MPL introduced sea-to-air cargo services in March, with the first shipment sent in May. The first shipment was a garment shipment from Bangladesh. The shipment was sent to Germany via Turkish Airlines.

Sea-to-air transshipment services were introduced with an aim to shorten the duration involved in shipping merchandise by sea and provide prompt assistance. This Hybrid Model aims to meet demands within the commercial industry efficiently. The key benefits the Maldives will receive from this service are the increased number of flights to various countries, especially European destinations, resulting from this service, typically offered by foreign countries to expedite the export process.

^{SOURCE : PSM}