Economy of Maldives

The industrial sector provides only about 7% of GDP. Traditional industry consists of boat building and handicrafts, while modern industry is limited to a few tuna canneries, five garment factories, a bottling plant, and a few enterprises in the capital producing PVC pipe, soap, furniture, and food products. There are no patent laws in the Maldives.[17]

The banking industry dominates the small financial sector of the Maldives. The country's seven banks are regulated by the Maldives Monetary Authority.[18] The Maldives has no income, sales, property, or capital-gains taxes, and has been considered to have the simplest tax code in the world.[19] The Tax Justice Network gave the Maldives a "secrecy score" of 92 on its 2011 Financial Secrecy Index - the highest score in that category of any actively-ranked country. However, the Maldives' minor market share put it near the bottom of the overall weighted lists.[20] A recurrent trend of Beijing leveraging its economic influence to attain geopolitical goals is observable. This pattern is not confined solely to small island nations in the Indian Ocean, like the Maldives and Sri Lanka, but extends to the wider Indo-Pacific region, encompassing countries with sizable and advanced economies as well.[21] The Maldives government is grappling with concerns about falling into a potential debt entrapment with China.[22]

Beginning in the 1990s, the Port of Male received over £10 million in loans from the Asian Development Bank designated for infrastructure upgraded.[23] The ADB notes that from 1991 to 2011, due to the loans, the ports annual throughput in freight tons equaled 273,000. By 2011 that number reached 1 million.[24] The ADB also provided training for port authority staff to increase efficiency. ADB and the Government of Maldives, in a joint report address ship turn-around, "What used to take about 10 days in 1991 was achieved in 3.8 days by 1997, and about 2.6 days by 2014".[25]

The factors that have led to Maldivians falling into or remaining in poverty are:[33]

1. Geography: Residents of the northern regions of Maldives tend to remain in poverty more than other regions due to the relatively lower level of development in the North;
2. Health: Maldivians who do not work due to poor health remain in poverty possibly on account of lower accessibility to health services in the country;
3. Young household members: Larger proportion of young family members results in a lower overall household income;
4. Female household members: Lower female labour participation rate and therefore, households with a greater proportion of females will have lower household income.

The difficulty of accessing social services and infrastructure in the outer atolls has meant that geography is a key reason for poverty and income disparity in Maldives.[33] In islands far from the capital, there tends to be lack of production, inadequate use of fishery resources, low value chain development and insufficient credit for small-scale producers and entrepreneurs.[36] The scarcity of land and water, the underdeveloped farming practices and absence of support services in atolls has meant low production and thus low incomes in these regions.[36]

The government has recognized these issues of income and gender disparities and with the United Nations Development Programme (UNDP), Maldives has implemented policies that directly address these issues.[37][38] In 2011, President Nasheed said, "The most important facility for a country's development is its people... and since women are half of the population in any country, for a certainty their full participation will speed up the pace of development."[39]