By: Enrico Gaveglia, UNDP Resident Representative in the Maldives

Since 1978, core investment in the United Nations Development Programme (UNDP) has been the foundation of its presence and impact in the Maldives. This support has allowed contributing donors to stand alongside the people of the Maldives—bridging them to remote island communities, guiding them through a dense history of profound challenges, as the country made major strides toward sustainable development. The story of core-funded UNDP leadership is one of trust, innovation, and relentless commitment. Generation after generation, UNDP has remained a steadfast partner to a nation that, in the 1970s, was among the most isolated in the world.

From the start, the continuous blend of institutional and programmatic core resources has served as a nurturing incubator for downstream project initiatives, supporting Maldivian communities as they navigate the challenges of climate change and scarce natural resources—realities inherent to a Small Island Developing State. In the 1970s, this support was crucial in tackling the cholera epidemic and addressing severe shortages of basic necessities. Over the years, it has continued to reach remote communities, delivering essential supplies and strengthening access to fundamental needs such as basic healthcare, clean water, nutrition, and education. At the same time, it played a transformative role in revolutionizing the fishing industry through investments in mechanization—bringing prosperity to a nation whose origins are deeply rooted in fishing. Since the 1980s, the Maldives has been globally recognized as one of the world’s most stunning tourist destinations. UNDP support that accompanied the establishment of the first international airport paved the way for a thriving tourism industry—one that now welcomes millions of visitors each year.

UNDP core funding has added to the resources supporting the Maldives’ democratic journey, helping advance reforms that facilitated the country’s first democratic elections, the ratification of its constitution, and the establishment of independent governance institutions such as the Supreme Court, the Elections Commission, the Human Rights Commission, and the Prosecutor General’s Office. From promoting gender equality to advancing environmental conservation, UNDP’s core-funded initiatives, alongside its programme portfolio, have included the development of gender quotas for local councils, the establishment of the Maldives' first UNESCO World Biosphere Reserve, and support to the successful management of the COVID-19 pandemic—a crisis that laid bare the country’s economic fragility, driving its Debt-to-GDP ratio past 110% by 2022 and making urgent the need for deeper, systemic changes in public finance management.

It is also due to this steady presence, coupled with new partners who have since arrived on the shores of the Maldives, both within and outside the UN, that the country has successfully transitioned to an upper-middle-income status. As a result, UNDP core resources have diminished due to a flawed formula that relies on GDP per capita as a measure of economic growth, failing to account for the realities of the Maldives' Multidimensional Vulnerability Index.  Nevertheless, UNDP has continued to invest in critical work that focuses on big-picture strategies to plan and shape the future, maximizing every core resource with a new grand bargain aimed at improving the efficiency and effectiveness of its operations. UNDP has shifted its focus to building the Maldives' capacity for broader strategies, moving beyond individual projects to invest in long-term policy reforms. For some, this approach is a unicorn within the UN system in Maldives, but the reality is that there is simply not enough grant funding to sustain actual execution of projects on the ground in a meaningful way.

Gaining momentum with the adoption of its 2022-2026 support offer to the Maldives, UNDP is responding to the country's growing debt crisis, which, like many other Small Island Developing States (SIDS), has been exacerbated by deepened fiscal constraints. As a result, a new priority has emerged: UNDP's core-funded efforts have since focused on mobilizing development finance rather than grant funding. For an upper-middle-income country with limited market options beyond tourism, this challenge has been monumental. With traditional aid and programmatic resource streams declining—now accounting for just 4% of the national budget—the government has found in UNDP not only a new frontier of policy expertise but also important support to convene capital market investments. UNDP is blending through its core allocation every available grant to help unlock resources and drive transformative change in a rapidly evolving global economic landscape.

In 2021, UNDP’s strategic core investment allowed the development of a unified framework for tapping into both domestic and international funding, ensuring that resources were directed toward long-term national goals and the achievement of the Sustainable Development Goals (SDGs). This collaboration led to the launch of the Integrated National Financing Framework (INFF) in 2023, making the Maldives the first Small Island Developing State (SIDS) to adopt such a model. The INFF introduced a new way of thinking: treating all development finance as climate finance and urging both development partners and public administrators to reorient financial markets and state spending toward sustainability. By prioritizing this approach, the country now has the means to ease its debt burden.

UNDP moved quickly to assist the government in setting up two key frameworks to channel both public and private financing toward sustainability. The first, with the ‘SDG Taxonomy’, the Ministry of Finance is able to classify $3.3 billion in public funds across its entire budget, directing resources toward targeted environmental and social objectives. Additionally, the first Sustainability Framework introduced by the Capital Market Development Authority has the potential to re-orient the country’s $2.2 billion capital market, toward greener, well-governed, and socially viable investments. These tools, now embedded in the Maldives’ regulatory framework, have the power to reshape the country’s national financing architecture.

In 2024, with support from UNDP core resources, Maldives developed its first ESG reporting framework with support from UNDP - an instrumental first step in developing the country’s governance systems for sustainable finance. UNDP is currently supporting its institutional adoption by providing capacity support for financial regulators and the private sector. UNDP is also supporting the Maldives Stock Exchange in a visioning exercise to position itself as a Sustainable Stock Exchange and explore its potential to issue sustainability-linked service offers.

UNDP’s core-funded technical assistance, working alongside financial regulators seeking ways to leverage development aid to attract private capital, flourished in a first blended blue finance facility, designed to encourage banks to offer low-interest loans and support private debt issuers funding blue economy projects. Here, core funding becomes strategic, unlocking domestic capital previously held back by the financial services sector through concrete de-risking measures paired with grant allocation. Additionally, UNDP is collaborating with the Maldives’ central bank to develop its first parametric insurance product. The initial framework for a reef protection instrument is already in place, aimed at safeguarding parts of the country’s coral reefs, which make up over 3% of the world’s total. These efforts are set to unlock more private capital for sustainability projects, saving $20million spent yearly from national resources on climate pressure felt by island’s communities, while de-risking investments through a stronger insurance market.

These strategic core investments have positioned UNDP as a key player in development finance in the Maldives, an area traditionally dominated by international financial institutions. This growing trust became evident in 2023 when the government sought UNDP’s support to manage rising healthcare costs, which account for 14% of the national budget. In response, UNDP combined core-funded technical advisory services with the government’s own budget allocation to offer cost-saving options for improving medicine procurement, providing access to higher-quality medicines, and enhancing health financing strategies. 

Furthermore, 25% of UNDP’s global $5 billion offer is directly funded by host governments, with the Maldives aligning itself with its middle-income and upper-middle-income peers. This collaboration creates much-needed fiscal space, prompting the government to request that UNDP expand its services. The new initiative involves setting up a national procurement body within the Ministry of Finance to centralize state purchases and streamline public spending. With orders placed through UNDP, the Maldives can benefit from an unparalleled global economy of scale, built on UNDP’s core-funded presence in 170 countries and territories.

It is safe to say that UNDP’s core investment has not only reshaped but will continue to reshape the Maldives’ socio-economic and financial landscape. UNDP’s core support has unveiled a story of unparalleled resilience in the Maldives. In a world that is now more than ever fragmented and polarized—where development planning is sourced to algorithms and bilateral cooperation is regressing into a narrative of donations, and many feel distant from the efforts of those dedicated to eradicating poverty, inequality, protecting the planet, and ensuring health, justice, and prosperity for all; Maldives has in UNDP and its multilateral membership a genuine ally. UNDP unwavering commitment to Maldivians, its constant presence in success and challenges it is after all and at the core a better deal for this beautiful nation.