Over 22k Maldivian resort workers face job loss or pay cuts, says bleak UN study

Some 22,000 Maldivians employed in the Indian Ocean tourist paradise’s resorts have lost their jobs or faced income losses due to the coronavirus pandemic, a UN body has said, painting a bleak picture on short term job security and employability in the island nation’s main economic sector.

UNDP said the number would increase to 45,000 plus with the inclusion of foreign employees.

A large number of people working for third-party service providers of the resorts — mostly foreign migrant workers undertaking elementary work such as gardening, cleaning and maintenance — are also affected.

Freelancers, seasonal workers and local vendors providing goods and services to resorts have also lost their income due to the suspension of their services.

Resort employees are either laid off or sent home on no pay. Some are also retained with reduced pay.

“Job loss and redundancy was mostly evident amongst those on probation contracts and amongst younger age groups,” the assessment report, released Thursday, read.

“For those employees who have been retained, a large proportion of employees have lost their incomes completely as majority are put on no-pay for the for the period April-June 2020.”

Employees who lost jobs and are on no pay are expected to experience an average income loss ranging from $600 to $1,000 per month — over 60 per cent of their monthly income — at least until the end of June.

Affected resort workers told the UNDP’s researchers that they would not be able to manage household expenses beyond the first month as they did not have any savings.

“Some of the coping strategies stated indicated reducing household expenses such as postponing renovation planned for their house, postponing holidays, temporary relocation of family from Male to home island due to unaffordability of rent in the greater Male region, postponement of personal loan payments,” the report read.

Bleak forecast

Resorts will be reopened in July with minimal operations and with a skeleton staff structure, UNDP warned, adding that a large number of employees that are currently retained up to the end of June risk losing their jobs after July as resorts may not be able to retain them.

According to the UNDP, short term employability and income opportunity within the tourism industry is uncertain for many including those in job transition.

“Those in job transition phase, have lost jobs, are on no pay, are unemployed and seeking for new jobs and are new entrants to the labour market are amongst those are unlikely to secure employment or incomes in the short term, from the tourism industry,” the report said.

“Freelance service providers and community vendors of goods and services are undergoing multiple challenges with no formal recognition and loss of income affecting their livelihood and wellbeing during this period.”

The Maldives is preparing to reopen its borders to visitors in July.

The country’s tourism ministry has drafted and invited comments from industry stakeholders on its own guidelines on reopening the borders.

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.

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.

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

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.

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 1,883.

Seven deaths have been reported and 717 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.

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