The separate tab titled "Commentary" is designed to host comments and observations that have not fully matured or have not been completed as finished and polished articles. Therefore, in order to commence the Commentary Section, the Economic Desk is happy to offer its general view, the main premise on which its specific observations and commentary on the Fourth Tourism Masterplan would be made.
The Draft of the Fourth Tourism Masterplan is now loaded on the website of the Ministry of Tourism Arts and Culture and open for comments at http://www.tourism.gov.mv/article.php?aId=1056
This being the document that would define the development of the Tourism Industry in the Maldives for the next 5 years and more the members of the Economic Desk believe that the industry, analysts and commentators should time take time to review and comment on the Masterplan now.
Members of the Economic Desk, has decided that it too, would put forward its observations on the Fourth Tourism Masterplan in writing to the Ministry. We look forward to making this submission to the Ministry shortly.
Commentary on the DRAFT Fourth Tourism Masterplan
Tourism is now and since the 1990’s has been the biggest industry of the Maldives and accounts for around 45% of GDP directly. However, the tourism industry very directly also energizes other industries raising the tourism contribution to close to 80% of GDP according to some analysts. These include the transport industry; the growth of which may be almost exclusively related to the expansion of the tourism industry into the atolls, the fisheries and agriculture industry with sales targeted directly to resorts and the construction industry fuelled by resort construction.
The Maldivian Economy is today, being buffeted by several unfavorable forces. These include
1. Decline in Primary Industries with fisheries dropping to around 1% and agriculture only doing marginally better.
2. High Debt and unmanageable deficits resulting in inflation and currency devaluation
3. High Unemployment with 19,000 new people entering the job market in the period 2006 – 2010 while the economy actually shed jobs resulting in 20,000 people being unemployed and an exceptionally high rate of Unemployment at 28%.
4. The Economy increasingly becoming a Single Sector Economy with the total Economy and the fate of the Maldivian Nation and its people progressively being leveraged on the travelling patterns of the luxury traveler.
We believe that it is against this backdrop that the Fourth Tourism Masterplan; the document that would define the personality of the Tourism industry in the short and medium term, should be reviewed and commented on.
Our Comments, therefore, could be broadly categorized into two distinct, yet related categories;
1. Commentary regarding how the Fourth Tourism Masterplan need to address and be responsive to the specific economic circumstance that we are facing as a nation
2. Comments and suggestions regarding the contents of the Masterplan, viz
a. The Key outcomes (page 26/27 of the pdf /pages 18/19 of the document)
b. The Strategic Action Plan (page 29 of the pdf /pages 21 of the document)
c. The Strategies and Action Points (page 30 - 70 of the pdf /pages 22 – 62 of the document)
While it is important to recognize and caution against the over-dependence of an entire economy on a single sector; especially that of a high premium tourism industry, the country does not seem to have any other options today. The Fisheries industry, on which the economy once depended on, although showing some modest signs of recovery is still way below the highs experienced in the mid 2000’s and is performing below 2% GDP contribution. The construction industry is heavily dependent on the tourism industry and the present growth in the industry is very much driven by huge public sector investments in housing which is financed by long term foreign loans, build by imported raw material using foreign labor resulting in very little retention in the economy; except of course the housing units and is not expected to continue for the medium term. The other Industry that is showing some dynamism is the transport industry, which is being propelled by the development of tourist resorts in the outer islands. Meanwhile, the economy is facing chronic issues including worsening unemployment, growing debt and devaluing currency none of which seem to be have simple solutions.
Therefore, while the issue of the economy being increasingly leveraged on the tourism industry is a legitimate concern, the nation needs vigor in the economy and dynamism in the corporate sector and the only option seems to be the tourism industry at least in the short term.
A rising tide floats all boats, according to an old adage. Thus maybe what we need to figure out is a mechanism whereby the tourism industry, even more than now, integrates and loops back and therefore energizes key aspects of the economy especially those in critical condition today.
The Economic Desk’s main comment on the Tourism Masterplan is that the plan needs to be fully contextualized and developed in such a manner that this energizing happens. That the broad themes and strategies should be designed to mitigate rising unemployment and energizing small businesses.