Young girls are kept in school longer by new governmental initiatives aimed at providing higher education for women.

Photo by Yassin Hameed. Courtesy Portrait Gallery, Maldives

Male’ is one of the most congested cities in Asia, with a total population of 70,000 people in less than one square mile.

Photo by Yassin Hameed. Courtesy Portrait Gallery, Maldives

It would seem to be Mission Impossible: take an archipelago of nearly 1,200 islands, with a population spread across 199 of them; take a capital where a quarter of the country’s population lives in less than one square mile. Now make it a success in the age of technology and economic globalization. This is the challenge that Maldivian president Maumon Abdul Gayoom and his government are taking on, and despite the odds they are achieving success.

The key to the country’s geographical challenges, Gayoom believes, is regional development. Make it possible for some of Male’s 70,000 people to move to other islands, develop all the nation’s resources instead of just those close to the capital, and the Maldives disparate geography turns from a problem into an opportunity. “So we began a program of decentralization,” Gayoom says, “to have schools, hospitals, health centers in the islands as well as garment factories. And we also expanded tourism so that there are resorts in many of the atolls now outside the Male’ area.”

The Maldives’ far-flung island settlements present a unique challenge to the country's development process, and building of an efficient, cost-effective transport and communications network, remains essential both for the task of nation building and to lay the foundation of a unified market.

Minister for Planning and Development Ibrahim Hussein Zaki explains that the present distribution of population across those islands, most of which have populations of fewer than 500, is not conducive to equitable and sustainable development. “Looking after 199 islands is like looking after 199 countries, you have to provide all the basic means to each one of them, and that is not sustainable,” he says.

He notes that in many of the islands the per-capita cost of providing basic infrastructure such as schools, health care facilities, public buildings and harbors is far too high to produce a scale economy. “You have to integrate them,” he explains, “so the economy of scale comes into play.” At present the cost of providing and maintaining socio-economic services in the Maldives is often 500 percent higher than in continental developing countries and a number of island states.

Creating ‘focus islands’
The government’s population and development consolidation strategy prioritizes the regions by promoting decentralized development processes and providing a socio-economic infrastructure to go with them. Under this strategy, the Maldives has undertaken a mega-regional development project with the assistance of the Asian Development Bank that aims to identify areas with economic and growth potential that may be used as urban service centers. Meanwhile, a population redistribution program is bringing people and development together, moving them into areas with more employment opportunities and better access to services.

Regional development is being fostered to ensure that people enjoy equal opportunities to benefit from national development. “The idea is to divide our 20 atolls into five regions. Every region will include three or four atolls, and every atoll will have two or three growth centers,” Zaki explains. “Every region will have a port, an airport, a hospital, secondary schooling. So we are making it easier for the private sector to start businesses in these centers and encourage immigration like Male’s.” The target is, he says, for every region to have a population of roughly 50,000.

The disparity between Male’ and the outer islands continues to be a key issue. Male’s residents earn on average three times the income of those on the outer islands; something the government is also aiming to change. There is also a marked discrepancy in the availability of physical and social infrastructure such as schools, markets, health care facilities, sanitation and energy. “The project is expected to have a significant impact on improving living conditions on the atolls and reducing regional disparities between Male’ and the atolls,” Zaki stresses.

Over the last year the government has established regional development and management offices in the Northern and Southern Development Regions, which include three and four atolls respectively.

“Our development efforts will concentrate in these two regions, but we plan to establish regional offices in the remaining three by early next year,” Zaki adds.

The cost of the first phase of the project amounts to 70 million dollars, “which means that seven atolls are being taken care of,” he says. “We need at least 120 to 150 million dollars to eventually consolidate the whole project.” So far, the government has been able to secure from 40 to 50 million for the first phase with multilateral assistance from the Asian Development Bank and the Islamic Development Bank. “We are looking for other sources of funding, such as the World Bank, but we believe we are very much on course for success,” Zaki says.

The national perspective
With regional development as the foundation of the process, there is also the question of overall economic development. The Maldivian economy is based on two principal industries: fisheries and tourism, both of which rely almost completely on the international economy for their growth and development. They are also the largest employers and the source of livelihood for the large majority. But they are, nonetheless, fragile.

“The country heavily depends on these two industries for fiscal revenues, foreign exchange earnings, employment and growth, and both face stiff international competition,” says Minister of State for Finance and Treasury Mohamed Jaleel. External price fluctuations are also common for the fisheries’ product, exposing the economy to periodic contractions in earnings, as was the case in the year 2000. Tourism is even more vulnerable to the global economic climate as well as to a number of natural and manmade threats; even a negative media report could have a debilitating effect on the country's tourism industry.

“The external orientation of the economy and its narrow base render the country vulnerable to the vagaries of the international economy, which have shown their potential to damage people's income and employment prospects,” Minister Jaleel says, adding that the Maldives has maintained an extraordinary double-digit economic growth rate for the last 10 years, but due to the loss incurred by the events of September 11, it has come down to about seven percent.

Articulating the policy
In order to cope with such degree of vulnerability, the diversification of the economic base is essential to ensure a stable economy that can help realize the long term goals of Maldives Vision 2020, an all-encompassing plan developed through island, regional and national consultations that articulates a well-considered and realistic vision for the Maldives to become an economic leader amongst middle-income developing countries.

The Maldives economic and strategic plan recognizes a “strong need” to diversify into new economic sectors to earn more foreign exchange, for example into commercial port and logistic activities. It also emphasizes taking appropriate measures to save foreign exchange, such as the upgrading and expansion of agricultural activities. “The amount of items we import is enormous,” Zaki says. “Out of every dollar earned by the tourism industry only 17 cents are retained in the country, while the balance goes out. So it is important to produce more here and rely less on imports.”

The country's strategic economic plan establishes that by capitalizing on the expansion of traditional economic clusters, namely tourism, fisheries and agriculture, Maldives will branch out into new ones like port and logistic services, information and communication technology and offshore banking and finance.

“These new areas will complement the traditional ones and help them become modern and progressive, to ensure stability and sustainability of the whole Maldivian economy,” Zaki says. He adds that tourism and fisheries are key drivers of other economic activities, namely transport and communications, distribution, construction and real estate, and that it is crucial to continue upgrading these supporting sectors to ensure the growth of the core ones.

“For the first time, we are looking at land as a trading asset,” he says. “In this country land was regarded as a social issue until now. But we have decided to go for a 180-degree turn, and to look at it as an economic asset.”

Playing on existing strengths
Another of the nation’s idiosyncratic strengths is its steady accumulation of a wealth of techniques in aquatic and marine science and the technology, human skills and expertise relating to it. Without being consciously nurtured, Maldivian fishing methods, boat-making craft and other local knowledge, technologies and practices have proven to be impressive by any standard, as well as economically profitable and environmentally friendly. According to the government’s plan, “this can be the basis for the export of specialist knowledge and services in the future.”

Minister Zaki strongly believes that political and social stability are important for business, as well as ensuring an environment that is favorable to expanding the scope of international business activity. He notes that such stability enables the government to take a long-term view by investing in infrastructure and the training of human resources. “The government’s efforts to strengthen macro-economic fundamentals and develop new financial and commercial institutions, along with its privatization program of public sector companies, will finally create sustained growth,” he says.

Cultivating new skills
Economic growth, in the end, can be measured in human terms. It takes human skills to achieve, and its successes can be counted in towns and roads built, businesses making profits, and individual income levels rising. Those human skills are where the government knows it must concentrate its efforts. It is faced with a riddle: economic diversification is needed to provide jobs to the new generation of Maldivians, while at the same time the nation has to rely for the most part on expatriates for the educated workers it needs to execute its plans.

It is recognized that the Maldives’ human resources are not sufficiently developed to sustain a dynamic, knowledge-based economy. Maldivian entrepreneurs say that the absence of an adequately trained, skilled and motivated national workforce hinders private sector growth.

The challenge facing the government now is to provide the necessary human capital for full employment in both the existing and newly emerging sectors of the economy. Minister of Human Resources, Employment and Labor Abdullah Kamaludeen stresses the importance of quality schooling and appropriate skills training for the emerging workforce, so that the rapidly growing numbers of new entrants to the labor market will be skilled enough to take up the opportunities offered by the growing economy. “On the other hand,” he notes, “we must diversify our economic base to provide sufficient job opportunities to our youth.”

The Maldivian population is still growing at one of the highest rates in the world: close to half of the population is under 14 years of age. Over the next five years, an unprecedented number of school leavers are expected to look for work and further educational opportunities.

Meanwhile, the swift pace of economic growth and development has created resource gaps in the areas of upper and middle management, medical, educational and other professional services, intermediate skills and even unskilled labor. This niche has been readily filled by an influx of expatriate labor, largely from the countries of South Asia. About 27,000 expatriate workers are currently employed in the Maldives, only between 10 and 15 percent of whom constitute skilled labor.

“This suggests that there is scope to train and upgrade the skills of local labor to eventually take over the skill-intensive jobs currently performed by foreign workers,” Kamaludeen says. He adds that the large expatriate community siphons out a significant portion of the limited foreign currency earned by the country, as well as creating social problems.

Educating a new generation
Educationally, the news is not all bad. The nation has seen significant achievements in the area over recent years, raising its literacy rate to over 98 percent. Today primary education is universal and around 7,000 students finish secondary school every year.

W. Lewis Amselem, Deputy Chief of Mission at the US Embassy in Sri Lanka, also accredited to the Maldives, says the country lacks higher education opportunities. “People come out of the equivalent of US high school with nowhere to go, unless they can get some kind of education overseas. President Gayoom and others are desperate to have increased Western educational opportunities for their high school graduates.”

Minister of Education Mohamed Latheef says that the range of secondary education will be increased in the future to accommodate the present and future demands of the economy and society. Post-secondary and tertiary institutions will follow suit. “The existing Maldives College of Higher Education will grow into the University of Maldives in the earliest possible time frame; maybe five years from now,” he says, “so that the educational aspirations of young Maldivians can be fulfilled in their home country.”

Overall, the Maldives’ government has articulated clearly the problems it has to solve. To do so, it knows, requires action on many fronts, simultaneously. Opportunities have to be created, and those who are to benefit from them have to be made ready and able to do so. If knowing the enemy is half the battle, the government is doing well: now it has to make sure it can live up to the challenges it has set itself.