Maldives seeks UN aid as coronavirus cases rise

Maldives has asked the United Nations for assistance, as coronavirus cases increase in the island nation.

In a phone call Thursday, President Ibrahim Mohamed Solih asked UN chief Antonio Guterres to provide aid to the Maldives and other small states from a new multi-partner trust fund established by the UN for Covid-19 response.

Announced last week, the UN COVID-19 Multi-Partner Trust Fund prioritises three critical areas of action: stop the outbreak, protect the vulnerable, and build resiliency.

It is anticipated that the fund, modelled on a similar trust fund that helped countries recover from the 2014 West African Ebola outbreak, will need $1 billion in the first nine months.

The president’s plea follows a similar request previously made by foreign minister Abdulla Shahid.

In a phone call Wednesday, the minister told the United Nations Development Fund chief Achim Steiner that the Maldives will be soon submitting proposals to access resources under the agency’s Covid-19 response package.

The request for assistance under the UNDP’s Covid-19 Integrated Response Offer will focus on both the immediate requirements of the health emergency, as well as long-term economic recovery, Shahid added.

Meanwhile, President Solih welcomed the UN chief’s initiatives to restructure debt repayment windows and to forgive debts for countries with vulnerable economies.

“He also highlighted that SIDS such as the Maldives are predominantly dependent on international tourism and trade, and are therefore disproportionately impacted by the measures that have to be imposed to effectively contain Covid-19,” a statement issued by the President’s Office read.

Maldives has sought assistance from several international aid agencies and financial institutions, including the International Monetary Fund (IMF).

The country has since received $20 million from the OPEC Fund for International Development, $17.3 million from the World Bank, $600,000 from the Asian Development Bank, and $3.28 million from the European Union.

The coronavirus outbreak has hit the Maldivian economy hard, as travel restrictions and other preventive measures affect the country’s lucrative tourism industry, which contributes the bulk of the island nation’s state revenue and foreign reserves.

Before the pandemic, the government had been bullish about tourism prospects, targeting two million, high-spending holidaymakers this year after last year’s record 1.7 million.

However, tourist arrivals saw a year-over-year decline of 22.8 per cent in the first 10 days of March. Officials say the number of tourist arrivals to the Maldives could drop by half in 2020.

All international airlines have suspended scheduled operations to the Maldives, as the island nation enforced a blanket suspension of on-arrival visa in late March in a bid to combat the spread of the novel coronavirus.

Even before the visa suspension, the Maldives had closed its borders to arrivals from some of the worst-hit countries, including mainland China, Italy, Bangladesh, Iran, Spain, the United Kingdom, Malaysia and Sri Lanka. Visitors from three regions of Germany (Bavaria, North Rhine-Westphalia and Baden-Württemberg), two regions of France (Île-de-France and Grand Est) and two regions of South Korea were also banned from entering the country.

All direct flights to and from China, Italy, South Korea and Iran were also cancelled.

Cruise ships and foreign yachts were also banned from docking at any of the country’s ports.

With arrival numbers falling and the visa suspension in effect, several resorts across the Maldives had been closed.

Tourism has been the bedrock of the Maldives’ economic success. The $5 billion-dollar economy grew by 6.7 per cent in 2018 with tourism generating 60 per cent of foreign income.

However, the government is at present projecting a possible 5.7 per cent economic contraction this year — an estimated $778 million hit.

The Maldives has announced an MVR 2.5 billion stimulus plan, which includes MVR 1.55 billion ($100 million) in emergency loans for businesses to meet short-term working capital needs.

In addition to the emergency financing, the government’s stimulus plan is complemented by a package of financial measures, including a six-month moratorium on principal and interest repayments for personal, business and housing loans sanctioned by commercial banks.

The government is also subsidising utility bills in March and April.

Those that lose jobs due to the coronavirus pandemic will also be paid unemployment benefit for a period of three months.

Meanwhile, the central bank has announced a $150 million facility for banks to ensure healthy foreign currency reserves.

The facility is arranged through a $400 million stand-by currency swap signed by the Maldives Monetary Authority (MMA) and Reserve Bank of India (RBI) last year, he said.

If required, minimum reserve requirement of banks will also be slashed from 10 to five per cent to allow banks to increase lending.

On March 8, Maldives reported its first cases of the novel coronavirus, as two hotel employees tested positive for Covid-19 at a luxury resort in the archipelago.

Eighteen more cases — all foreigners working or staying resorts and liveaboard vessels except five Maldivians who had returned from abroad — were later identified.

A seven-case cluster, detected in capital Male over the past two days, confirmed community transmission of the coronavirus and put the number of confirmed Covid-19 cases in the Maldives to 27.

However, 16 out of the 27 have made full recoveries.

The Maldives announced a state of public health emergency on March 12, the first such declaration under a recent public health protection law.

The public health emergency declaration has allowed the government to introduce a series of unprecedented restrictive and social distancing measures, including a nationwide closing of schools, colleges and universities. Non-essential services and public places in the capital such as gyms, cinemas and parks have also been shut.

Restaurants and cafes in the capital have been asked to stop dine-in service and switch to takeaway and delivery.

A nationwide shutdown of all guesthouses, city hotels and spa facilities located on inhabited islands is also in effect.

Following the confirmation of community transmission, a nationwide lockdown has been ordered, as health authorities conduct contact tracing in Male and scramble to contain a widespread outbreak.

The lockdown bans all public activity and transport in capital Male and its suburbs of Hulhumale and Villimale for a day. Any movement in and out of the city and its suburbs as well as the neighbouring industrial islands of Thilafushi and Gulhifalhu are also banned.

Inter-island transport across the archipelago of 1,192 coral islands is also banned.

Public gatherings, including ceremonies and parties of all kinds, sporting events, and picnics, are also covered under the ban.

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