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Maldives (02/06)


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For the most current version of this Note, see Background Notes A-Z.

Flag of Maldives is red with a large green rectangle in the center bearing a vertical white crescent; the closed side of the crescent is on the hoist side of the flag.

PROFILE

OFFICIAL NAME:
Republic of Maldives

Geography
Area: 298 sq. km. (115 sq. mi.), over 1,100 islands; twice the size of Washington, DC.
Cities: Capital--Male' (pop. 70,000).
Terrain: Flat islands.
Climate: Hot and humid.

People
Nationality: Noun and adjective--Maldivian(s).
Population (mid-year 2002): 280,000 (plus 31,000 expatriate laborers who are not counted in the census).
Population growth rate: 1.66%. Population growth rate has dropped dramatically in recent years.
Ethnic groups: South Indians, Sinhalese, Arabs.
Religion: Sunni Islam.
Languages: Dhivehi (official); many government officials speak English.
Education: Years compulsory--none. Attendance--primary (grades 1-5) 99%; secondary: (grades 6-10) 51%, (grades 11-12) 5%. Literacy--98%.
Health: Infant mortality rate--18/1,000. Life expectancy--73 years male; 74 years female.
Resident work force: Community, social and personal services--21%; manufacturing--13%; fishing--11%; tourism--11%; transport, storage, and communication--9%; other--35%.

Government
Type: Republic.
Independence: July 26, 1965 (formerly a British protectorate).
Constitution: November 11, 1968.
Branches: Executive--president, cabinet. Legislative--unicameral Majlis (parliament). Judicial--High Court, Civil Court, Criminal Court, Family and Juvenile Court, and 204 general courts.
Administrative subdivisions: 19 atolls and capital city.
Political parties: Adalath Party, Dhivehi Raiyyethunge Party, Islamic Democratic Party, Maldivian Democratic Party.
Suffrage: Universal at age 21.

Economy
GDP (2004): $695 million.
GDP growth rate (2005 est.): -5.5%.
Per capita GDP (2004): $2,401.
Inflation (2004): 6.4%.
Percentages of GDP (2004): Tourism--32.9%; transport and communications--15.4%; government--12.6%; manufacturing--7.8%; real estate--6.9%; fishing--6.2%; construction--3.6%; agriculture--2.5%; other--12.1%.
Trade (2004): Exports--$123 million: fish products. Major markets--U.S., Thailand, EU, Sri Lanka, Japan (source: Maldives Customs Service). Imports--$641 million: oil, textiles and yarn, prepared foodstuffs, vegetables, animal products, electrical appliances, wood products. Major suppliers--Singapore, Sri Lanka, EU, India, Malaysia, U.A.E.

PEOPLE, HISTORY, AND CULTURE
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 20% of the budget in 2004. 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 seven. Secondary schools (grades 8 through 10) are available in atoll capitals and on the islands with larger populations. Five schools have higher secondary classes, two in Capital Male and in three atolls. 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 provided $17 million for education development from 2000-04. It plans to commit a further $1.5 million for education development, as well as $9 million for an education-related component under an integrated human development project. Over 2000-06, the Asian Development Bank (ADB) committed $7 million to support post-secondary education development in Maldives. ADB has committed $6.5 million for employment skills training over 2004-2009.

GOVERNMENT AND POLITICAL CONDITIONS
A 1968 referendum approved the constitution, making Maldives a republic with executive, legislative, and judicial branches of government. The constitution was amended in 1970, 1972, and 1975 and is again under revision.

Ibrahim Nasir, Prime Minister under the pre-1968 sultanate, became President and held office from 1968 to 1978. He was succeeded by Maumoon Abdul Gayoom, who was elected President in 1978 and reelected in 1983, 1988, 1993, 1998, and again in October 2003. The president heads the executive branch and appoints the cabinet. Nominated to a 5-year term by a secret ballot of the Majlis (Parliament), the president must be confirmed by a national referendum.

The unicameral Majlis is composed of 50 members serving 5-year terms. Two members from each atoll and Male' are elected directly by universal suffrage. Eight are appointed by the president. A special Majlis session began meeting in mid-2004 to review constitutional reform issues. Regularly scheduled Majlis elections took place in January 2005.

The Maldivian legal system--derived mainly from traditional Islamic law--is administered by secular officials, a chief justice, and lesser judges on each of the 19 atolls, who are appointed by the president and function under the Ministry of Justice. There is also an attorney general. Each inhabited island within an atoll has a chief who is responsible for law and order. Every atoll chief, appointed by the president, functions as a district officer in the British South Asian tradition.

On November 8, 1988, Sri Lankan Tamil mercenaries tried to overthrow the Maldivian Government. At President Gayoom's request, the Indian military suppressed the coup attempt within 24 hours. In September 2003, following the death of an inmate, a brief prison riot broke out on an island near the capital Male'. Three other inmates were killed during the incident. In response to the killings of the inmates, brief rioting took place on the streets of Male'. In February 2004, the government prevented an opposition rally from taking place. Several people were arrested but they were all later released. The government also keeps a tight rein on any expression of Islamic extremism.

President Gayoom's commitment to introduce political reforms in June 2004 was widely welcomed. A human rights commission was established, and a Special Majlis, or parliament, was convened to consider changes in the constitution, including the legalization of political parties. In August, however, a demonstration in the capital turned violent and the government declared an emergency and arrested a large number said to be connected to the protest. Some of those arrested were prominent in the reform movement, including several members of the Special Majlis. Most were released a few months later.

The Maldives were badly hit by the Asian tsunami of December 26, 2004, which killed 82 and caused substantial damage to Maldives tourism, housing, and fishing infrastructure. The U.S. provided $1.6 million in immediate relief assistance. Despite the disaster, the Government of the Maldives held parliamentary elections, originally scheduled for December 31, on January 22, 2005. Reform candidates performed strongly. Following the poll, President Gayoom announced plans to establish multiparty democracy within a year.

In June of 2005, the members of the People's Majlis unanimously voted to legally recognize political parties. In order of registration the parties are the opposition Maldivian Democratic Party, the government's Dhivehi Raiyyethunge Party, the Adalath (Justice) Party, and the Islamic Democratic Party. Although no elections have been held after the party system was implemented, members of parliament have declared their political affiliations.

Principal Government Officials
President--Maumoon Abdul Gayoom
Minister of Defense and National Security--Ismail Shafeeu
Minister of Economic Development and Trade--Mohamed Jaleel
Minister of Finance and Treasury--Qasim Ibrahim
Minister of Home Affairs--Ahmed Thasmeen Ali
Minister of Foreign Affairs--Ahmed Shaheed

ECONOMY
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 2004 totaled $695 million, or about $2,400 per capita. While Maldives had experienced relatively low inflation and high real GDP growth in recent years, the December 26, 2004 tsunami inflicted severe damage, estimated at $450 million (approximately 60% of GDP). As a result of interrupted tourist inflows and livelihoods, Maldives' economy fell by about 5% in 2005, though the World Bank predicts positive growth should resume relatively quickly, as the tourist trade picks up.

The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million annually since 1997. The trade deficit ballooned to $386 million in 2004, largely the result of increased oil prices.

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 (UNDP), 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 $210 million a year. Tourism and related services contributed 33% of GDP in 2004.

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 617,000 in 2004. The average occupancy rate is 84%, though this figure will be smaller for 2005 due to the tsunami, with the average tourist staying 8 days.

Fishing. This sector employs about 11% of the labor force and contributes 6% of GDP, including fish preparation. The use of nets is illegal, so all fishing is done by line. Production was about 158,000 metric tons in 2004, 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 94% of all marine product exports. Total export proceeds from fish were about $85 million in 2004. The fishing fleet consists of some 1,647 small, flat-bottomed boats (dhonis). After the dhonis shifted from sails to outboard motors, the annual tuna catch per fisherman rose 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. The December 2004 tsunami inundated several agricultural islands, which could take a significant amount of time to recover. Agriculture provides about 2.5% of GDP.

Industry and manufacturing. The industrial sector provides only about 8% of GDP. Traditional industry consists of boat building and handicrafts, while modern industry is limited to a few tuna canneries, a bottling plant, and a few enterprises in the capital producing PVC pipe, soap, furniture, and food products. Five garment factories that had exported principally to the United States closed in 2005, following the expiration of the Multi-Fiber Agreement (MFA) that had set quotas on developing country garment exports to developed countries. The loss of these factories has not proven an insurmountable hurdle, however, as most of the profits were repatriated and most of the labor was expatriate.

FOREIGN RELATIONS
Maldives follows a nonaligned policy and is committed to maintaining friendly relations with all countries. The country has a UN Mission in New York, with the Permanent Representative to the UN in New York also accredited as Ambassador to the United States, an embassy in Sri Lanka and in the United Kingdom, a trade representative in Singapore, and a Tourist Information Bureau in Germany. India, Pakistan, Bangladesh, and Sri Lanka maintain resident embassies in Male'. Denmark, Norway, the U.K., Germany, Turkey, and Sweden have consular agencies in Male' under the supervision of their embassies in Sri Lanka and India. The UNDP has a representative resident in Male', as do the UN Children's Fund (UNICEF) and the World Health Organization (WHO). Like the United States, many countries have nonresident ambassadors accredited to the Maldives, most of them based in Sri Lanka or India. The Maldives is a member of the Organization of the Islamic Conference (OIC) and the Non-Aligned Movement (NAM).

U.S. MALDIVIAN RELATIONS
The United States has friendly relations with the Republic of Maldives. The U.S. Ambassador and some Embassy staff in Sri Lanka are accredited to the Maldives and make periodic visits. The United States supports Maldivian independence and territorial integrity and publicly endorsed India's timely intervention on behalf of the Maldivian Government during the November 1988 coup attempt. U.S. Naval vessels have regularly called at Male' in recent years. The Maldives extended strong support to U.S. efforts to combat terrorism and terrorist financing in 2001-02.

U.S. contributions to economic development in the Maldives have been made principally through international organization programs. Following the December 2004 tsunami, the U.S. and Maldives signed a bilateral assistance agreement for $8.6 million in reconstruction assistance. This assistance will help in the rebuilding of harbors, sewerage systems, electrical generation facilities and in the development of aid absorption capacity in the Ministry of Finance. The United States has directly funded training in airport management and narcotics interdiction and provided desktop computers for Maldivian customs, immigration, and drug-control efforts in recent years. The United States also trains a small number of Maldivian military personnel annually. About 10 U.S. citizens are resident in the Maldives; some 5,000 Americans visit the Maldives annually. The Maldives welcomes foreign investment, although the ambiguity of codified law acts as somewhat of a damper. Areas of opportunity for U.S. businesses include tourism, construction, and simple export-oriented manufacturing, such as garments and electrical appliance assembly. There is a shortage of local skilled labor, and most industrial labor has to be imported from Sri Lanka or elsewhere.

Principal U.S. Embassy Official
Ambassador--Jeffrey Lunstead

The U.S. Embassy in Sri Lanka is at 210 Galle Road, Colombo 3; tel: +94 (1) 244-8007; fax: +94 (1) 2437-345.



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