The Role of Local Food in Maldives Tourism - Scholarly Commons ...

4.3 Economy
The Republic of Maldives is categorised as a SIDS with limited resources for economic
development (Domroes, 2001). With no land-based natural and mineral resources, the
economy of the Maldives is mainly dependent on tourism and industries that rely on its
marine resources, such as fishing (The World Bank, 2006). Over 90% of government
tax revenue comes from import duties and tourism-related taxes. Tourism accounts for
28% of Gross Domestic Product (GDP) and more than 60% of foreign exchange
receipts. Fishing is the second leading sector and made up 6% of the GDP in 2007
(Maldives Monetary Authority, [MMA], 2008). Agriculture and manufacturing
continue to play lesser roles in the economy, constrained by the limited availability of
cultivable land and the shortage of domestic labour (The World Bank, 2006).
As illustrated in Figure 4.4, GDP growth averaged over 7.9% per year for more than a
decade, except in 2005 when the GDP contracted by 5.5% as a result of the 2004 Asian
Tsunami (The World Bank, 2006). The Tsunami left 108 dead and 15,000 displaced
(Carlsen, 2006), and property damage exceeded US$470 million (ADB, 2005).
Figure 4. 4 GDP and GDP growth rates
Source: (MPND, 2007a)
In 2007, GDP totalled US$855 million with a per capita GDP of US$2,806 (MPND,
2008) – this was the highest in the region (The World Bank, 2006). The local currency
is Rufiyaa, which is equal to approximately Rf. 12.00 per US$ 1.00 (MMA, 2008). In
the United Nation’s Human Development Index (UNHDI), the Maldives stands at 100th
out of 177 countries, with a value of 0.741. The adult literacy rate is 96.3% (UNDP,
2008).
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