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Maldives Economic Vision 2013 - 2018Building a Sustainable & Vibrant Economy

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Lets Turn Challenges intoOpportunities

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Maldivesopen“The challenges facing our economy today can be overcome only through strategic and operational policy reforms. We must reinforce the pillars of the national economy. Policy reforms must be timely and decisive. Our economic base must be widened and volume of trade enhanced. Boosting the income of our fishermen and farmers is an immediate priority. The industry and talent of our youthful populations must be tapped adequately towards this economic transformation, and this objective can only be achieved through the provision of gainful employment to the many disenfranchised youth. Empowering the youth will be an overarching theme of my presidency.” - Inaugural Address by His Excellency President Abdulla Yameen Abdul Gayoom ( November 17, 2013 ).

TurningChallenges intoOpportunities

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Maldivesopen

Quick FactsKey EconomicIndicators

» Straddling the Equator, due south-west of the southern tip of India.

» Area: 859,000 sq. km. (including EEZ) » Number of islands: 1,192 » Number of inhabited islands: 194 » Population: 350,759 (2012 est.) » Life expectancy: 73.8 years » Infant mortality: 9 per 1000 live births » Literacy rate: 98.2 percent » Language:

- Dhivehi (native)- English (business language)

» Communication: - 621,043 cellular phone lines

(double the population)- 130,191 subscribed Internet customers

» GDP: US$2,292 million (Maldives Monetary Authority, 2013) » GDP per capita: US$6,567 (World Bank, 2013) » Inflation: 10.8 percent (2012) » Total exports: US$167 million (2012)

- Tourist arrival: more than 1,000,000 (End of November 2013)- Resorts in operation: 105 (End of June 2013)- Bed capacity: 22,942 (End of June 2013)

» Exchange Rate: US$1 = MVR15.42

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Progressive InvestmentClimate

Maldives is a haven for foreign investors with liberal economic policies and political stability.

Incentives for investors include import duty concessions, foreign ownership and no restrictions on repatriation of earnings and / or profits.

Availability of international arbitration in dispute settlement.

Progressive InvestmentClimate

Maldives is a haven for foreign investors with liberal economic policies and political stability.

Incentives for investors include import duty concessions, foreign ownership and no restrictions on repatriation of earnings and / or profits.

Availability of international arbitration in dispute settlement.

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Vision to become a high income, resilient and inclusive economy.

Lay the foundation to diversify the economy to new sectors and industries.

Establishment of free trade/economic zones.

Diversifying financial services sector through the development of a modern legal regime for financial services; attracting international banks and other financial institutions; building reputation of Maldives’ financial services and attracting investment funds/venture capitalism.

Government’sEconomic Vision

Tourism & Hospitality

» Develop 50 new resorts in the next five years.

» Introduce vertical tourism. » Position Maldives as a “Vacation

Home”. » Harness untapped markets. » Develop live-aboard marina

infrastructure. » Develop medical tourism with world

class facilities. » Establish Maldives as an attractive

destination for passenger liners. » Introduce educational tourism.

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The world’s top, award-winning luxury holiday destination.

Fisheries » Strengthen the concept of eco-friendly/dolphin-

friendly fishing in the Maldives. » Major exponent of “Pole and Line” sustainable

fishery. » Establish collection, packaging and distribution

mechanisms for local fresh produce to encourage individual and community level farming.

» Diversify the fishing sector by opening up of EEZ. » Invest in targeted mariculture. » Certified highest standard processor and exporter

of value added skipjack and yellowfin tuna to major European, American, Middle Eastern and Far East markets.

Maldives pole-and-line skipjack fishery was awarded Marine Stewardship Council (MSC) certification.

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Transport » Establish a transhipment port in the north. » Upgrade the international airport in Hulhule’ as

a regional transit hub with the ability to service Airbus A380.

Shifting to Clean EnergyThe Maldives’ vulnerability to climate change is one of its biggest development challenges. The Government aims to draw up a framework to generate 70 per cent of its energy use by clean energy sources, by 2020.

Objectives of shifting to clean energy:- Mitigate against climate change in the Maldives,- Reduce dependency on imported fossil fuels for power generation,- Increase energy security, and- Reduce dependency on foreign economies.

Major components of the project include:- Identify potential energy alternatives,- Scale-up investment in renewable power generation,- Promote environment-friendly technologies for households, industry and business. - Promote energy efficiency and conservation through standards, regulations, pricing policies and public awareness, and- Introduce demand management measures.

Zero import duty for renewable energy products.

Maldives has the largest seaplane fleet in the world.

Fisheries » Strengthen the concept of eco-friendly/dolphin-

friendly fishing in the Maldives. » Major exponent of “Pole and Line” sustainable

fishery. » Establish collection, packaging and distribution

mechanisms for local fresh produce to encourage individual and community level farming.

» Diversify the fishing sector by opening up of EEZ. » Invest in targeted mariculture. » Certified highest standard processor and exporter

of value added skipjack and yellowfin tuna to major European, American, Middle Eastern and Far East markets.

Maldives pole-and-line skipjack fishery was awarded Marine Stewardship Council (MSC) certification.

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Transport » Establish a transhipment port in the north. » Upgrade the international airport in Hulhule’ as

a regional transit hub with the ability to service Airbus A380.

Shifting to Clean EnergyThe Maldives’ vulnerability to climate change is one of its biggest development challenges. The Government aims to draw up a framework to generate 70 per cent of its energy use by clean energy sources, by 2020.

Objectives of shifting to clean energy:- Mitigate against climate change in the Maldives,- Reduce dependency on imported fossil fuels for power generation,- Increase energy security, and- Reduce dependency on foreign economies.

Major components of the project include:- Identify potential energy alternatives,- Scale-up investment in renewable power generation,- Promote environment-friendly technologies for households, industry and business. - Promote energy efficiency and conservation through standards, regulations, pricing policies and public awareness, and- Introduce demand management measures.

Zero import duty for renewable energy products.

Maldives has the largest seaplane fleet in the world.

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Key EconomicInitiativesSpecial Economic Zones (SEZs)Objectives of creating the SEZs:

» Promote and facilitate industrial, economic, social and infrastructure development.

» Create investment opportunities and increase foreign earnings.

» Increase employment opportunities for the Maldivian youth.

» Increase productivity of goods and services.

Government will provide special incentives and concessions for those investing and doing businesses in the SEZs.

SEZs will have the following facilities:

» Business incubation units. » Export processing zones. » Free trade areas and industrial parks. » Regional headquarters. » ICT parks. » Agricultural free trade zones. » Tourism research centres.

Potential business and economic activities targeted to the SEZs include:

» Premium class tourist hotels (vertical tourism) and resorts.

» Conference and event facilities. » Sea sports tourism. » Medical tourism. » Yacht and cruise tourism infrastructure. » Family tourism. » Production activities such as manufacturing of

goods, technological products and agricultural equipment and tools.

» Industrial activities such as metal and steel work. » Poultry farming. » Service sectors such as transportation, logistics,

warehousing, education, health, housing, basic necessities, infrastructure suppliers and support centres, sports, financial districts and off-shore banking.

» Infrastructure development such as building roads, bridges, airports and seaports, utilities, telecommunication and waste management.

iHAVAN – Integrated Development ProjectWith the shift in wealth and markets towards Asia, the Maldives is well placed at the heart of the Indian Ocean. The country is strategically located on the major shipping route of the Indian Ocean.

» Situated at 7°0’27”N Latitude and 72°0’52”E Longitude, the northern most atoll of the Maldives archipelago in North Thiladhunmathi.

» iHavan has enormous advantages for global trade and commerce – more than 2 billion people live within four hours’ flight time.

» Goods worth more than US$18 trillion are transported by sea across this region every year.

» Over 70,000 ships cross the Indian Ocean every year. » Every year, more than 5 billion barrels of the Arabian

Gulf Oil en route to Asia are transported in oil tankers that travel just north of iHavan.

» iHavan offers development of 5,700 hectares of land along with natural deep harbours.

iHAVAN – Integrated Development ProjectWith the shift in wealth and markets towards Asia, the Maldives is well placed at the heart of the Indian Ocean. The country is strategically located on the major shipping route of the Indian Ocean.

» Situated at 7°0’27”N Latitude and 72°0’52”E Longitude, the northern most atoll of the Maldives archipelago in North Thiladhunmathi.

» iHavan has enormous advantages for global trade and commerce – more than 2 billion people live within four hours’ flight time.

» Goods worth more than US$18 trillion are transported by sea across this region every year.

» Over 70,000 ships cross the Indian Ocean every year. » Every year, more than 5 billion barrels of the Arabian

Gulf Oil en route to Asia are transported in oil tankers that travel just north of iHavan.

» iHavan offers development of 5,700 hectares of land along with natural deep harbours.

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Major components of iHavan include: » A container transshipment port with break-bulk and warehousing, » An airport catering for passenger and cargo traffic, » An international shopping and commerce hub, » A cruise liner terminal, » A yacht marina, » An oil storage and bunkering facility, » Real estate development, and » Conventional and vertical tourism services.

iHavan will be demarcated as a Special Economic Zone that, allows comprehensive incentives for investors.

Offering unrivalled strategic access to the global growing consumer markets, iHavan will include incentives to attract regional officers of multinational corporations. Top executives will have the best of all worlds – bureaucracy-free work environment, advantageous location and the opportunity to reside in a tropical-paradise.

iHAVAN

iHavan will be demarcated as a Special Economic Zone that, allows comprehensive incentives for investors.

Offering unrivalled strategic access to the global growing consumer markets, iHavan will include incentives to attract regional officers of multinational corporations. Top executives will have the best of all worlds – bureaucracy-free work environment, advantageous location and the opportunity to reside in a tropical-paradise.

iHAVAN

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Cruise Terminal » Develop a Cruise Terminal and establish

boutique shopping and tourist related facilities in close proximity to the terminal.

Luxury Yacht Marinas

» Establish luxury yacht marinas in the north, centre and south of the Maldives, to maximize advantage as a premium tourist destination.

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Male’–Hulhule’ Bridge » Improve the connectivity and mobility of the population of greater-Male’ region. » Facilitate the development of Hulhumale’ to its full potential. » Develop through PPP and the proponent shall engage in the designing, building, financing,

maintenance and operation of the bridge. » Investor will have the provision of relevant commercial development rights. » Investor can propose added incentives required for the feasibility of the project.

Cruise Terminal » Develop a Cruise Terminal and establish

boutique shopping and tourist related facilities in close proximity to the terminal.

Luxury Yacht Marinas

» Establish luxury yacht marinas in the north, centre and south of the Maldives, to maximize advantage as a premium tourist destination.

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Male’–Hulhule’ Bridge » Improve the connectivity and mobility of the population of greater-Male’ region. » Facilitate the development of Hulhumale’ to its full potential. » Develop through PPP and the proponent shall engage in the designing, building, financing,

maintenance and operation of the bridge. » Investor will have the provision of relevant commercial development rights. » Investor can propose added incentives required for the feasibility of the project.

Expansion of Ibrahim Nasir International Airport (INIA)

» INIA is the main gateway into the Maldives. » Government seeks investors in envisaged further development phases of INIA, with Maldives

Airports Company Ltd (MACL), a government corporation as the operator of INIA.

Expansion of Ibrahim Nasir International Airport (INIA)

» INIA is the main gateway into the Maldives. » Government seeks investors in envisaged further development phases of INIA, with Maldives

Airports Company Ltd (MACL), a government corporation as the operator of INIA.

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Expansion of International & Domestic Airports

» Develop new domestic airports and upgrade the existing international and domestic airports.

» Major expansion projects include:- Upgrading Gan International Airport – extend and

resurface airport runway, expand apron, build new taxiway, establish a seaplane base, promote as boutique airport for private jets.

- Redeveloping Hanimaadhoo International Airport as a multi-modal international transport hub – expand the runway and build new terminal facilities.

Multi-Speciality Hospital

» Super speciality medical facility with a range of critical care services to cater demand of locals and visiting tourists.

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Maldivian Youth Resource Institute of Arts & Design (MYRIAD)

» Project will combine fine arts, performing arts, music and design – both traditional and contemporary.

» Project will be based in a prospective site in Hulhumale’. » MYRIAD will have an amphitheatre, gallery spaces, studio/workshop spaces, auditoriums and

showrooms. » A hotspot for excursion visitors to Hulhumale’.

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Maldivian Youth Resource Institute of Arts & Design (MYRIAD)

» Project will combine fine arts, performing arts, music and design – both traditional and contemporary.

» Project will be based in a prospective site in Hulhumale’. » MYRIAD will have an amphitheatre, gallery spaces, studio/workshop spaces, auditoriums and

showrooms. » A hotspot for excursion visitors to Hulhumale’.

IT Technopolis » Establish an IT park in Hulhumale’ with special

economic privileges. » Develop physical and IT infrastructure and

supporting facilities. » Develop an IT Training Institute. » Develop a mechanism to provide incubator

services and seed funding system to match local and foreign investors and provide funds and office space for start-ups.

IT Technopolis » Establish an IT park in Hulhumale’ with special

economic privileges. » Develop physical and IT infrastructure and

supporting facilities. » Develop an IT Training Institute. » Develop a mechanism to provide incubator

services and seed funding system to match local and foreign investors and provide funds and office space for start-ups.

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New National Stadium » Establish a world-class multi sports stadium that caters

for local and international sporting events. » Stadium complex will be used as a training facility for

international athletes.

National Aquatic Centre

» Establish an environmentally sustainable aquatic centre with modern services.

» The National Aquatic Centre will have an Olympic-sized, competition heated swimming pool, practice pool, diving pool, spectator seating, fitness centre, plant and equipment rooms, kiosk and café seating, office accommodation, roof garden and shopping space.

Challenges » Maldives has an extremely high dependency on imported

petroleum. » The 2012 fuel imports bill of US$488 million amounted to 22

percent of annual GDP. » Expenditure on fuel rose by 33 percent in 2012 compared to 2011. » The largest proportion of fuel is used for electricity generation and

in the transportation sector.

Source: Maldives Economic Diversification Strategy – Aug 2013

Petroleum product imports, 2000-2012

» Due to the prevalent financial situation, the country lacks appropriate funding to implement key developmental projects proposed by the Government.

» The Maldives needs technical and financial assistance from friendly countries and donor agencies to overcome the economic challenges faced by the country.

» The Government welcomes corporate investments in implementing key development projects.

Quantity of fuel imports by type, 2012

70% Diesel337.531 MT

2% Propane10.019 MT

8% Petrol38.008 MT

20% Jet Fuel93.865 MT

Challenges » Maldives has an extremely high dependency on imported

petroleum. » The 2012 fuel imports bill of US$488 million amounted to 22

percent of annual GDP. » Expenditure on fuel rose by 33 percent in 2012 compared to 2011. » The largest proportion of fuel is used for electricity generation and

in the transportation sector.

Source: Maldives Economic Diversification Strategy – Aug 2013

Petroleum product imports, 2000-2012

» Due to the prevalent financial situation, the country lacks appropriate funding to implement key developmental projects proposed by the Government.

» The Maldives needs technical and financial assistance from friendly countries and donor agencies to overcome the economic challenges faced by the country.

» The Government welcomes corporate investments in implementing key development projects.

Quantity of fuel imports by type, 2012

70% Diesel337.531 MT

2% Propane10.019 MT

8% Petrol38.008 MT

20% Jet Fuel93.865 MT

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» Strategic location. » Political stability. » Government driven projects. » Safe and fair business environment. » Investment promotion – incentives,

concessions, cross subsidies, leverages and government guarantees.

» Liberal tax regime. » International arbitration in dispute

settlement. » Full repatriation of earnings and / or profits. » World’s top luxury tourist destination. » Young and dynamic workforce. » Highest literacy rate in South Asia.

Why Invest inMaldives

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CORPORATE DEVELOPMENT SECRETARIATTHE PRESIDENT’S OFFICE Boduthakurufaanu Magu, Male’ 20113,Republic of Maldives. Phone: +960 332 3701 Fax: +960 332 5500Email: info@presidencymaldives.gov.mvWebsite: www.presidencymaldives.gov.mv

MINISTRY OF ECONOMIC DEVELOPMENTBoduthakurufaanu Magu,Male’ 20125,Republic of Maldives.Phone: +960 332 3668Fax: +960 3323840Email: info@trade.gov.mvWebsite: www.trade.gov.mv

INVEST MALDIVESMinistry of Economic Development,Boduthakurufaanu Magu,Male’ 20125,Republic of Maldives.Phone: +960 332 3668Fax: +960 3323840 E-mail: info@investmaldives.orgWebsite: www.investmaldives.org

EXTERNAL RESOURCE

MANAGEMENT DIVISIONMinistry of Finance & Treasury,Ameenee Magu,Male’ 20379,Republic of Maldives.Phone: +960 334 9225/+960 334 9200Fax: +960 332 4432E-mail: admin@finance.gov.mvWebsite: www.finance.gov.mv

MINISTRY OF FOREIGN AFFAIRSBoduthakurufaanu Magu,Male’ 20307,Republic of Maldives.Phone: +960 3323400Fax: +960 3323841 E-mail: info@foreign.gov.mvWebsite: www.foreign.gov.mv

MINISTRY OF TOURISM5th Floor, Velaanaage, Ameeru Ahmed Magu,Male’ 20096,Republic of Maldives.Phone: +960 3323224/+960 3323226Fax: +960 3322512 E-mail: info@tourism.gov.mvWebsite: www.tourism.gov.mv