Maldives

Maldives comprises 1,191 islands in the Indian Ocean. The earliest settlers were probably from southern India. Indo-European speakers followed them from Sri Lanka in the fourth and fifth centuries BC. In the 12th century AD, sailors from East Africa and Arab countries came to the islands. Today, the Maldivian ethnic identity is a blend of these cultures, reinforced by religion and language.

Originally Buddhists, Maldivians were converted to Sunni Islam in the mid-12th century. Islam is the official religion of the entire population. Strict adherence to Islamic precepts and close community relationships have helped keep crime low and under control.

The official and common language is Dhivehi, an Indo-European language related to Sinhala, a language of Sri Lanka. The writing system is from right to left. English is used widely in commerce and increasingly as the medium of instruction in government schools.

Some social stratification exists on the islands. It is not rigid, since rank is based on varied factors, including occupation, wealth, perceived Islamic virtue, and family ties. Members of the social elite are concentrated in Male'.

The early history of the Maldives is obscure. According to Maldivian legend, a Sinhalese prince named KoiMale was stranded with his bride--daughter of the king of Sri Lanka--in a Maldivian lagoon and stayed on to rule as the first sultan.

Over the centuries, the islands have been visited and their development influenced by sailors from countries on the Arabian Sea and the Indian Ocean littorals. Mopla pirates from the Malabar Coast--present-day Kerala state in India--harassed the islands. In the 16th century, the Portuguese subjugated and ruled the islands for 15 years (1558-73) before being driven away by the warrior-patriot Muhammad Thakurufar Al-Azam.

Although governed as an independent Islamic sultanate for most of its history from 1153 to 1968, the Maldives was a British protectorate from 1887 until July 25, 1965. In 1953, there was a brief, abortive attempt at a republican form of government, after which the sultanate was re-imposed. Following independence from Britain in 1965, the sultanate continued to operate for another 3 years. On November 11, 1968, it was abolished and replaced by a republic, and the country assumed its present name.

Environmental Concerns
There is growing concern about coral reef and marine life damage because of coral mining (used for building and jewelry making), sand dredging, and solid waste pollution. Mining of sand and coral have removed the natural coral reef that protected several important islands, making them highly susceptible to the erosive effects of the sea. The practices have recently been banned. In April 1987, high tides swept over the Maldives, inundating much of Male' and nearby islands. That event prompted high-level Maldivian interest in global climatic changes, as its highest point is about 8 feet above sea level. The Asian Brown Cloud, a U.S.-sized area of pollution over the Indian Ocean, has the potential of wreaking havoc on the tourism- and fishery-based Maldivian economy.

Investment in Education
The government expenditure for education was 18% of the budget in 2002. Both formal and nonformal education have made remarkable strides in the last decade. Unique to Maldives, modern and traditional schools exist side by side. The traditional schools are staffed by community-paid teachers without formal training and provide basic numeracy and literacy skills in addition to religious instruction.

The modern schools, run by both the government and private sector, provide primary and secondary education. As the modern English-medium school system expands, the traditional system is gradually being upgraded. By early 2003, every inhabited island was equipped to provide primary school education up through grade five. Fewer islands have secondary schools for grades six through 10, and the only high school (grades 11 and 12) in the Maldives is in Male'. Only around 5% of students go to high school, but literacy is high at 98%.

Seven post-secondary technical training institutes provide opportunities for youth to gain skills that are in demand. The World Bank has already committed $17 million for education development in 2000-04, and plans to commit further $15 million for human development and distance learning during this period. Over 2001-03, the ADB has committed $7 million to support post-secondary education development in Maldives.

The Maldivian economy is based on tourism and fishing. Of the Maldives' 1,191 islands, only 200 are inhabited. The population is scattered throughout the country, with the greatest concentration on the capital island, Male'. Limitations on potable water and arable land constrain expansion.

Development has been centered upon the tourism industry and its complementary service sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and used to improve technology in the agricultural sector.

GDP in 2002 totaled $640 million or about $2,200 per capita. The Maldives has experienced relatively low inflation in recent years. Real GDP growth averaged about 10% in the 1980s. It expanded by an exceptional 16.2% in 1990, declined to 4% in 1993, grew to 10% in 1998 and has since leveled to the 5% to 7% range.

The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million since 1997. The trade deficit declined to $208 million in 2002 from $233 million in 2001.

International shipping to and from the Maldives is mainly operated by the private sector with only a small fraction of the tonnage carried on vessels operated by the national carrier, Maldives Shipping Management Ltd. Over the years, the Maldives has received economic assistance from multilateral development organizations, including the UN Development Program, Asian Development Bank, and the World Bank. Individual donors--including Japan, India, Australia, and European and Arab countries (including Islamic Development Bank and the Kuwaiti Fund)--also have contributed.

A 1956 bilateral agreement gave the United Kingdom the use of Gan--in Addu Atoll in the far south--for 20 years as an air facility in return for British aid. The agreement ended in 1976, shortly after the British closed the Gan air station.

Economic Sectors

Tourism. In recent years, Maldives has successfully marketed its natural assets for tourism--beautiful, unpolluted beaches on small coral islands, diving in blue waters abundant with tropical fish, and glorious sunsets. Tourism now brings in about $198 million a year. Tourism and related services contributed 31% of GDP in 2002.

Since the first resort was established in 1972, more than 87 islands have been developed, with a total capacity of some 19,000 beds. The number of tourists (mainly from Europe) visiting the Maldives increased from 1,100 in 1972 to 280,000 in 1994. In 2000, tourist arrivals exceeded 466,000 and is expected to top 500,000 in 2003. The average occupancy rate is 69%, with the average tourist staying 8 days and spending about $396.

Fishing. This sector employs about 11% of the labor force and contributes 7% of GDP or 10%, including fish preparation. The use of nets is illegal, so all fishing is done by line. Production was about 164,003 metric tons in 2002, most of which was skipjack tuna. About 50% is exported, largely to Sri Lanka, Japan, Hong Kong, Thailand, and the European Union. Fresh, chilled, frozen, dried, salted, and canned tuna exports accounted for 84% of all marine product exports, split fairly evenly between the products. Total export proceeds from fish were about $56 million in 2002. The fishing fleet consists of some 1,647 small, flat-bottomed boats (dhonis). Since the dhonis have shifted from sails to outboard motors, the annual tuna catch per fisherman has risen from 1.4 metric tons in 1983 to 15.9 metric tons in 2002.

Agriculture. Poor soil and scarce arable land have historically limited agriculture to a few subsistence crops, such as coconut, banana, breadfruit, papayas, mangoes, taro, betel, chilies, sweet potatoes, and onions. Almost all food, including staples, has to be imported. Agriculture provides about 3% of GDP.

Industry and manufacturing. The industrial sector provides only about 9% 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. The vast majority of Maldivian exports to the United States are garment products.