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Geography, agriculture and economy

Geography

The Republic of Maldives is an island nation that lies in the Indian Ocean, south-southwest of India. It consists of a chain of 26 atolls that include some 1,190 islands, covering an area of about 90,000 km². Most islands are small, flat and low-lying, with an average elevation of 1.6 m above sea level. The country is vulnerable to the effects of climate change and rising sea levels.

The tsunami that swept through the Indian Ocean in 2004 flooded at least one third of the territory of 112 islands and totally destroyed 20 islands, changing the country’s geography.

The estimated population of about 310,000 in 2007 is growing at the annual rate of 1.7 per cent (World Bank 2008). Some 200 islands are inhabited, and 90 per cent of the islands have a population of less than 1,000. About 30 per cent of the total population lives in the capital, Malé. There is a strong flow of internal migration from the islands to the capital.

Agriculture

Vegetation is limited in the salty soil along the coasts, but farmers grow crops inland. About 2,780 ha, on both inhabited and uninhabited islands, are cultivated or cultivable. Almost 1,000 ha of that total are on 32 uninhabited islands that the government is leasing out for the development of commercial agriculture.

Crop production is an important source of income and employment for island communities. The agricultural crop sector has expanded at an impressive rate, but growth has not kept up with gross domestic product (GDP). Agriculture’s share of GDP fell from 7 per cent in 1984 to 2.7 per cent in 2003. Domestic production in 2007 met only about 10 per cent of the country’s food requirements, and the balance is imported. Most agricultural production depends on family labour, particularly women’s labour.

The fisheries sector has expanded rapidly also, but growth is less than that of overall GDP. Fisheries’ share of GDP dropped from 22 per cent in 1978 to 9.3 per cent in 2004. Recently, liberalization and restructuring of the fisheries sector have led to substantial increases in catches and significant growth in exports. The sector employs about 11 per cent of the work force, and it accounts for 60 per cent of exports. It is the main source of income for 20 per cent of the population. Tuna makes up about 90 per cent of the total fish catch.

Economy

The economy has showed an impressive growth rate, with an increase in GDP per capita of as much as 60 per cent in the decade up to 2006. Gross national income per capita in 2007 was an estimated US$3,200. (World Bank)

Economic growth was disrupted by the 2004 tsunami, which damaged critical infrastructure and housing and undermined the basic livelihoods of almost one third of the population. The tourism sector, an important source of employment, income and investment, was hardest hit. Immediately after the disaster the government launched a relief and rehabilitation effort with support from international donors. The government’s efforts put extra pressure on public finances, but overall the macro-economic effects of the tsunami were limited and mainly short-term.

By 2006 the economic sector had staged a remarkable recovery and average annual growth of GDP for the two-year period 2005-2006 was between 7 per cent and 8 per cent. In 2008 GDP was US$1.0 billion, and the annual growth rate of GDP was 5.5 per cent.


Source: IFAD