THE CURRENT CHALLENGES IN ECONOMIC

ACTIVITIES IN MALDIVES DUE TO COVID-19 & THE

WAY OUT VIA ISLAMIC SOCIAL FINANCE

MARIYAM RAFAA ABDUL LATHEEF - 2100181 1

 INTRODUCTION
• One of the industries which was most exposed to COVID-19 crisis from its onset in February 2020.

• On February 03, 2020 the boarders of Maldives restricted passengers who have China as their
port of embarkation or have transited in China during their travel regardless of the nationality,
except for citizens of Maldives.

• The first confirmed positive cases in Maldives were identified as two tourists on March 2020.
Maldives declared the state of public health emergency on 12th March 2020.

• The Health Protection Agency and Ministry of Tourism then restricted the travel movement from
tourist establishments known as resorts, to all inhibited islands of the Maldives and vice versa .

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 INTRODUCTION
• During the month of March, there was a nation-wide shutdown of all guesthouses and
city hotels and there was a ban on all tourist excursions across the country. In order to
prevent the transmission of the COVID-19 virus, several restrictions were placed on
tourist related travels within the two years.

• On 15th July 2021, the boarders opened and 40 resorts resumed their operations and
opened for tourists.

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ECONOMY WIDE IMPACT OF COVID-19

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 COVID-19 IMPACT ON TOURISM
INDUSTRY
• Reports by Guesthouse Association of Maldives indicates that the guesthouse segment of
tourism industry will incur an aggregated loss of $28.9 million in the next six months.

• The Maldives Association of Travel Agents & Tour Operators (MATATO) reported in March
2020 that the 135 active tour operators expects to lose a total revenue of $100 million in
the next 6-8 months.

• The resort management survey indicates that an average revenue loss of $4 million is
anticipated during the resort closure period. However, this varies significantly across
resorts, depending on their Average Daily Rate.

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 RESEARCH METHODOLOGY
• This research will be based on qualitative and quantitative data.

• Primary Date collection can be done by phone survey with management level
respondents and in-depth key informant interviews with resort employees

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RESUMING TOURISM UNDER THE NEW NORMAL
• On March 2020, Bank of Maldives, Ministry of Tourism and Maldives Association of Tourism Industry (MATI)
together introduced a short-term financing facility which was upto $2 million for tourism establishments.

• The COVID-19 Recovery Loan Scheme under the government’s ERP included a maximum loan amount of
MVR 7.7 million for resorts and MVR 500,000 for guesthouses.

• On May 2020, President announced the deferment of all resort lease payments for 06 months to be paid
back within a year, starting from June 2021 in quarterly or monthly payments.

• The Ministry also urged establishments to reinstate laid off workers.

• To restore confidence in the Maldives tourism industry, business actors and tourism-related business
associations held several online marketing events with virtual tours to actively engage tourists and tour
operators throughout the world.

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 ISLAMIC SOCIAL FINANCING
• Islamic social financing such as Sadaqah (Charitable giving), Waqf
(Endowments and trusts) and Zakat (Obligatory almsgiving) will help
to address the challenges faced during COVID-19, while achieving the
SDGs.