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Virus crisis forces Maldives to cut public sector wages
Maldives is cutting wages and other benefits in the public sector and state enterprises for at least three months, as part of austerity measures to mitigate the impact from the novel coronavirus pandemic.
Finance minister Ibrahim Ameer told reporters Thursday that 25 per cent from wages between MVR 20,000-25,000 ($1,290-$1,613), 30 per cent from wages between MVR 25,000-60,000 ($1,613-3,871), and 35 per cent from salaries above MVR 60,000 ($3,871) in the public sector will be cut.
These cuts will not affect employees receiving wages below MVR 20,000 ($1,290), but will only apply to basic salaries of contract staff and top officials such as permanent secretaries in the civil service and officials from other state institutions and independent bodies, he said.
Caps will also apply to limit allowances and other benefits to public sector employees.
Take home pay will be capped at:
- MVR 25,000 ($1,613): for basic salaries below MVR 10,000 ($643)
- MVR 30,000 ($1,935): for basic salaries between MVR 10,000-15,000 ($643-967)
- MVR 35,000 ($2,258): for basic salaries between MVR 15,000-20,000 ($643-1,290)
- MVR 40,000 ($2,581): for basic salaries between MVR 20,000-25,000 ($1,290-1,613)
- MVR 45,000 ($2,903): for basic salaries between MVR 25,000-30,000 ($1,613-1,935)
“From our estimates, these pay cuts will allow us to save some MVR 15 million ($967,993) per month from state expenditure,” Ameer said.
The finance minister said a 32 per cent cut will be made from the basic salaries of managing directors, deputy managing directors and chief executives of state-owned companies. They will not be receiving the MVR 11,500 ($742) board allowance either, he added.
The government had earlier announced plans to shave MVR 5 billion ($324 million) off state expenditure and reduce the total state expenditure for the year to MVR 30 billion ($1.944 billion) from the approved MVR 38.7 billion ($2.5 billion).
Previous austerity measures include a 20 per cent cut on salaries and allowances of all political appointees, and 30-70 per cent cuts across travel, training, renovations and capital equipment budgets.
A 36 per cent reduction has also been made to capital grants allocated to local councils under a recent legislative amendment to give more powers and financial flexibility to the local administration in the islands.
The Public Sector Investment Programme has also been put on hold.
The Maldives is also looking to secure a freeze on loan repayments worth MVR 4 billion ($259.2 million) under a recent debt moratorium agreed by the world’s wealthiest countries in the G20 grouping.
The Maldives is looking to borrow $233.37 million from international lenders to plug the gap in balance of payments stemming from the coronavirus pandemic.
Funds already pledged by international lenders include $28.9 million from the International Monetary Fund (IMF), $20 million from the OPEC Fund for International Development, $17.3 million from the World Bank, and $3.28 million from the European Union.
In the meantime, the government will borrow MVR 4.2 billion ($272 million) under an overdraft facility at the central bank to cover state expenses and maintain public services amidst the coronavirus pandemic.
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 618.
Two deaths have been reported and 20 have made full recoveries. Five remain in intensive care.
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.
The Global Wellness Institute (GWI), a leading non-profit research organisation for the global wellness industry, announced a strategic collaboration with JOALI BEING, marking the Maldives as the 11th country to feature on GWI’s Geography of Wellness platform. JOALI BEING, which opened in 2021, is a pioneering wellbeing resort designed around biophillic principles and focused on delivering transformative, holistic wellness experiences.
The Maldives, as an island economy, has emerged as a premier destination for luxury wellness tourism and spas. The country’s wellness economy comprises two major segments: wellness tourism, valued at $1 billion following an impressive annual growth rate of 35.4% from 2022 to 2023, and the spa sector, valued at $448 million, with an exceptional 63.7% growth rate over the same period.
Through this collaboration with JOALI BEING, GWI has made detailed data on the Maldives’ position within the $6.3 trillion global wellness economy accessible to stakeholders interested in investing in the country’s expanding wellness tourism and spa industries. GWI’s chair and CEO, Susie Ellis, emphasised that by sponsoring the Geography of Wellness report, JOALI BEING is playing a pivotal role in shaping the future of wellness tourism in the region. This collaboration aims to help the Maldives capitalise on the rising demand for wellness travel while maintaining competitiveness in the evolving wellness tourism sector.
Özgür Cengiz, global director of wellness development at Gürok Tourism Group, which operates JOALI BEING, expressed pride in the partnership with GWI. Cengiz highlighted the Maldives’ long-standing association with luxury and natural beauty and noted that the collaboration integrates data-driven wellness insights to enhance its global appeal. By aligning offerings with emerging trends such as nature connection, eco-wellness, and transformative travel, the initiative seeks to attract high-value travellers while promoting sustainability and community development.
The Maldives, spanning 1,192 islands across 26 atolls, is celebrated as a quintessential island paradise with jewel-like islands, white sands, turquoise waters, and luxury wellness resorts. Nature-centred wellness experiences, including encounters with vibrant coral reefs teeming with sea turtles, manta rays, and whale sharks, highlight one of the world’s richest marine ecosystems. The Maldivian way of life fosters a deep connection to nature, with a diet rich in tropical fruits, herbs, and fresh seafood contributing to holistic wellbeing. Environmental sustainability remains a key priority, with government-led initiatives aimed at protecting coral reefs, mangroves, and seagrass beds to ensure harmonious coexistence with tourism.
The Maldives’ traditional healing practice, Dhivehi beys, combines indigenous plant-based remedies with global influences to restore balance within the body. Emphasising harmony among the body’s ‘humours’ of hot, cold, and dry, Dhivehi beys uses natural herbs for healing. The government has recognised its cultural significance and is actively integrating this ancient tradition into tourism, allowing visitors to experience it alongside the country’s natural beauty.
The Global Wellness Economy: Maldives report provides critical data for industry stakeholders and is available for free download.
The Global Wellness Institute (GWI) is a nonprofit organisation recognised as a leading global research and educational resource for the wellness industry. It introduces major industry initiatives and hosts regional events to unite leaders in shaping the future of wellness. GWI aims to improve global health by educating institutions, businesses, and individuals on preventing disease, reducing stress, and enhancing overall quality of life, with a mission to empower wellness worldwide.
Bandos Maldives recently announced the commencement of the Festive Season with a grand evening featuring the traditional Jolly Mix and the ceremonial lighting of the Christmas Tree. This event marks the beginning of a magical holiday celebration on the island.
Guests can enjoy the spirit of the season through a variety of festive activities planned daily. The lineup includes engaging activities for both children and adults, meaningful coral planting experiences, a traditional Maldivian feast, and thrilling land and sea games. These events are designed to create unforgettable memories for all visitors.
The tropical paradise of Bandos Maldives offers a warm and joyous holiday experience, filled with wonder and the true essence of the season.
Conveniently located just 7 kilometres from Malé International Airport, Bandos Maldives is a pristine coral island spanning 18.66 hectares in the heart of North Malé Atoll. For half a century, it has embodied its ethos as ‘the island of hospitality,’ making it a premier travel destination in the Maldives.
Set amidst the crystal-clear turquoise waters of the Indian Ocean, the resort features 220 accommodations, along with three vibrant bars and four restaurants. Guests can relax at the Orchid Spa or stay active at the state-of-the-art Clubhouse sports complex, which includes beach volleyball, tennis, steam baths, a sauna, and a modern fitness suite. For diving enthusiasts, Dive Bandos, one of the Maldives’ longest-established dive centres, offers safe and thrilling underwater adventures.
Sun Siyam Iru Fushi has introduced an exciting new activity for ocean enthusiasts: Conservation Snorkelling. Led by the resort’s resident marine biologist, Mohamed Shah, this immersive experience allows participants to contribute to marine conservation efforts while exploring the vibrant underwater ecosystem of the Maldives. Combining education, exploration, and action, the initiative offers an enriching opportunity for visitors of all ages.
Participants engage in collecting critical data on coral health and fish populations using underwater fish guides, coral health charts, and writing slates, while learning to identify various fish species. They assess reef conditions and contribute to the protection of the local marine environment. The findings are then discussed with Mohamed Shah, providing deeper insights into the marine life of the Iru Fushi lagoon and house reef.
This activity is a key component of Sun Siyam Cares, the resort’s initiative focused on environmental protection and community support. Families, young couples, and other guests can participate in global conservation efforts through the Coral Watch citizen science project. The activity is open to strong swimmers aged eight and above who feel comfortable snorkelling.
“At Sun Siyam Iru Fushi, we strive to protect the stunning natural environment around us,” said Abdullah Atham, Resort Manager. “Through activities like Conservation Snorkelling, we encourage guests to explore and actively contribute to ocean conservation.”
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