Maldives construction industry projects $40 mln coronavirus losses
The Maldives construction industry stands to lose some $40 million in three months as the novel coronavirus pandemic wreaks havoc on the global and local economy, a representative body said Tuesday.
In a report assessing the impact of the pandemic on the country’s second biggest economic sector, Maldives National Association of Construction Industry (MNACI) said construction activity has gone down by 50 per cent.
All new public investment projects budgeted for the year have been cancelled, resulting in a direct loss of MVR 7.2 billion ($466 million) to the construction industry, the association said.
“From the local survey report, it is estimated that the industry will face a loss of MVR 205 million monthly over the upcoming months, in terms of project interruptions, food and accommodation of work force and related expenses,” the report read.
“Local contractors are struggling to get paid for the pending invoices from the government authorities.”
The construction industry employs 5,000-7,000 locals, and 40,000-50,000 foreign workers — the largest expatriate workforce in the country.
“Contractors are unable to pay rents and staff salaries and the employees are suffering without being able to pay their rents and manage livelihood. Some of the employees have already lost their jobs while others’ wages have been reduced,” the report read.
The 384-member association proposed a three-tier recovery, which focuses on ensuring the continuity of the industry through stimulus funds and easing regulatory approvals, restarting the industry safely by creating awareness amongst workers and easing procurement, and transforming the industry through rapid mobilisation techniques and better construction models.
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 13 per cent economic contraction this year — an estimated $778 million hit.
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 six-case cluster of locals, detected in capital Male on April 15, confirmed community transmission of the coronavirus. Several more clusters have since been identified, bringing the total number of confirmed case in the Maldives to 250.
No deaths have been reported and 17 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 stay-at-home orders in capital Male and its suburbs, a ban on inter-island transport and public gatherings across the country, and a nationwide closing of government offices, 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.
Photo: Mihaaru News