Archives

A time to reflect: 25 years of President Gayoom's rule - Dr. Abdullah Waheed

"My main objective has been to raise the standard of living of the people," President Gayoom said in a recent interview to the BBC, "and I think I have been fairly successful in that." Many would agree. As the Maldives prepare to celebrate 25 years of his rule, it is one of the most prosperous countries in the region.

In 1978 the GDP per capita of Maldives was a mere US$200. Today it is over US $2,200. Following the introduction of planned development, the economy grew at a phenomenal rate throughout the 80s. In the 90s, GDP growth lost some of its momentum when the original advantage of starting from a low base was lost. However, even in the closing years of the 90s, the GDP of Maldives grew at an average annual rate of 6.8 percent. This was significantly higher than the South Asian average of 5.9% and the Least Developed Countries average of 4.5%.

More remarkable than the actual growth was the radical transformation in the character of the economy. In the 1970s, the Maldives economy had been a subsistence economy based almost entirely on fisheries. But by the year 2000, other sectors had expanded so much that the contribution of fisheries to the GDP was a mere 6%. This was not because of any absolute decline in fisheries, but because of the sustained expansion of the tourism sector and its spin-offs in sectors such as transport and communication. Tourism's contribution to the GDP was about 34 percent, while the contribution of the transport and communication sector was about 16 percent.

Did this make any difference in the lives of the Maldivians? Let me quote just one statistic, electricity consumption, which is widely regarded as a proxy for affluence. Electricity consumption in Male increased from 20 million KWh in 1990 to 90 million KWh in 2000 - a more than 4 fold increase. While accurate figures are not available for the late 70s, the estimated consumption then was a mere 3 million KWh, a figure that is thirty times less than the current figure. Outside Male, electricity was available in less than 5% of the islands in the late 70s compared to 100% today.

The Maldives has carefully planned and successfully developed the tourism sector as the engine of economic growth. The blue print for success was the Tourism Master Plan which introduced a whole new concept in resort development. The 15 new resorts developed under phase I of the Master Plan had a uniform theme based on environmental protection and preservation, making the Maldives' tourism products greener. It was also based on designs and architecture that reflected, to a large extent, Maldivian culture and tradition, thus making the products unique, more country specific and thus less prone to competition.

The tourism sector contributed an average of 33.4 percent of GDP during the late 90s. Tourist arrivals continued to increase at an average of 8.5 percent per year, teaching a total of over 467,000 visitors in 2000. Tourist bed-nights also increased by about 6 each year during this period.

Even if fisheries now contribute a relatively less percentage to the GDP, Maldives continues to attach a very high priority to it. This is partly because over one quarter of the local labour force is employed in the fisheries sector, being the main provider of employment in a number of atolls. This priority is reflected in the growth of the sector in absolute terms. The fish catch increased to 124,000 metric tones in 1999. The sector's gross earnings steadily increased during the 90s.

The government's policy of a larger role for the private sector in fisheries has paid rich dividends. The secondary production in fisheries that increased during the late 90's was primarily due to private sector initiatives. This increase is secondary production was, to a large extent, responsible for the growth in the contribution of the manufacturing sector to GDP. This trend is expected to further accelerate following the recent opening of fisheries zones to the private sector. The private sector is also largely responsible for the improvements in technology in recent years, such as the introduction of large fishing vessels of over 20m, expanding the catching capacity of the harvesting fleet.

Growth in tourism and the affluence it brought have spawned an entire new sector in the economy - the construction sector. At the risk of being labelled an exaggeration, one may state that more construction has occurred in the Maldives in the last 25 years than in the last 25 centuries. This sector now contributes between 2 and 4% to the GDP. It has also introduced important reforms such as reduction of environmentally harmful practices such as coral harvesting. In 1999, The State Trading Organisation (STO) commissioned a cement-packing plant on the Industrial Estate Island of Thilafushi. The opening of this factory reduced the price of cement in the country by 10 percent and also reduced environmental concerns in Male arising from storage of large amounts of cement on the island.

Time was when the airstrip in Hulule welcomed just one flight per month in 1966, carrying about 40 passengers from Colombo. By 2000, annual international passenger movements at Male' International Airport has crossed the 1 million mark. International aircraft movements grew to nearly 10,000. The country is being served by more than 30 airlines. In the domestic aviation scene, passenger movements approximate half a million.

Telecommunications is perhaps the sector that experienced the fastest progress in recent decades, internet and GSM digital cellular mobile services coming in quick succession. In May 2000 the Maldives became the first South Asian country to provide a telephone within walking distance of each inhabitant. Residential telephone service is available on most of the densely populated islands. Thus Maldivians are today among the most well connected in the region.

Education in the Maldives has taken a quantum leap during the last 25 years. Gross Enrolment Ratio (GER) in preschool enrolment reached 85% in 2000. The Net Enrolment Ratio (NER) for the seven years of basic education is over 99%. Even in secondary education, apart from two regional secondary schools, over 20 schools in the atolls have been registered as GCE O' Level Centres by 2000. In the area of higher education, the Maldives College of Higher Education offers several diploma and degree level academic programs.

The health sector also has made spectacular progress since 1978. Infant mortality has come down from 120 per thousand to about 18 per thousand, the life expectancy has risen from about 48 years in 1978 to 73 years. Maldives has successfully combated communicable diseases such as leprosy, TB and filaria, and eliminated malaria. For the first time in recent memory, the country is free of the epidemics of diarrhoea that plagued the country year after year.

One of the biggest obstacles to development that Maldives faced was the geographical fragmentation of its people. In the late 90s, an ambitious program was launched for Population and Development Consolidation. It aimed at minimising the serious diseconomies of scale faced by the country in the provision of socio-economic services, by promoting economically viable population concentrations on large islands. The project is aimed at developing two regions, one in the north, Northern Development Region (NDR) and one in the south, Southern Development Region (SDR) of the country. The Hulhumale Development Project now well under way will prove to be one of the biggest landmarks in the country's road to population consolidation.

While the Maldives has done remarkably well in the closing decades of the 20th century, there is a large agenda before it in the 21st century. The economic base is narrow and there is an urgent need to diversify and expand the economy by further developing existing industries and by exploring new economic activities, while ensuring the sustainability of physical and natural resources. While the private sector already plays a large part in the economy, its role needs to be further increased, especially in expanding the economic base.

The country's biggest asset is its people. While Maldives has increased the number of people who graduate from schools, their contribution to the economy needs to be maximised, providing relevant training and employment opportunities. Perhaps the one area that needs the biggest attention is the improvement of legislative, regulatory, governance and administrative reform to facilitate rapid economic and social development.

In meeting these challenges and making way towards its 2020 goals, the Maldives has one distinct advantage over its neighbours; socio-political stability and cohesiveness based on shared social, cultural and religious values. Maldives must consolidate this stability further by ensuring the democratic participation of all in the development process.

www.crescat.com

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries

Produced by Lake House
Copyright © 2003 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager