The pandemic pushed many workers from the formal sector to informal sector with women dominating this switch.
Maldives’ First Informal Sector Survey Report Launched
July 25, 2022
Male’, 25 July 2022: The prevalence of informal sector employment remains highest among women compared to men, with 71% of informal sector workers reporting that they earned less income than what they earned pre-pandemic, the first structured study in the Maldives to examine the impact of the COVID-19 pandemic on the nation’s informal sector has found.
The study, Informal Sector Survey 2021: Rapid assessment of the impact of COVID-19 on informal sector, developed by the Maldives Bureau of Statistics (MBS) with technical support of the United Nations Development Programme (UNDP) in the Maldives, was launched today. It compares a sample of informal employment pre- and post-pandemic, looking at loss of income and employment across industries and gender.
Informal sector plays a key role in the Maldives by providing employment opportunities, especially within the atoll populations. According to the Household Income and Expenditure Survey (HIES 2019) - a household sample survey conducted regularly by MBS, the informal sector provided employment for 19% of the population. 43% in the sector are reported to be self-employed women, putting them in a vulnerable position when a crisis unfolds.
Informal sector neither has employment security nor social security, which exacerbates the workers’ social and economic exposure, particularly for women who require special attention in national efforts to create livelihood opportunities and need a reasonable safety net which goes beyond income. There’s an urgent need for effective, targeted, and sustainable measures to address the adverse livelihoods impact on informal sector workers due to crises such as COVID-19.
“In this regard, the findings of this survey can serve as a valuable contribution to deepen the national understanding of the impact of the health crisis on the informal sector and the effectiveness of policy measures taken. The study may also guide fiscal policies targeted to the informal sector in the future,” said Aishath Hassan, Chief Statistician of MBS.
The survey found that loss of income across all industries has been significant, with women particularly unable to go back to previous employment. It not only produced evidence of the pandemic pushing workers from the formal sector to the unofficial economy - with women dominating the switch, but also women-led informal enterprises were found to be less likely to formalize their businesses owing to barriers such as inability to find the time to commit to task due to competing household or family demands, or lack of awareness of business registration and tax registration processes which prevent them from registering in the appropriate national mechanisms.
“From supporting the Rapid Livelihoods Assessment immediately in the aftermath of the pandemic, to partnering to conduct a dedicated gender analysis of this sector, it is a distinct effort of UNDP to support the Maldives in reshaping social and economic recovery with the most vulnerable in primary focus. In particular, this study aims at enhancing ongoing dialogues where policies need to be able to capture pandemic recovery efforts to mitigate effects on women. The results of the survey sheds light into the effectiveness of countercyclical measures deployed in the Maldives, which would be helpful for the design of social protection measures responsive to crises. Rebuilding the economy to generate green, resilient, and inclusive development cannot succeed without full consideration of the challenges of the informal sector,” said Enrico Gaveglia, UNDP Resident Representative in the Maldives.
The study provides four general recommendations for policymakers: first, establishment of an informal sector monitoring mechanism; second, strengthening social protection for the informal sector; third, introduce measures to retain workers and keep Small and Medium-sized Enterprises (SMEs) afloat; and fourth; strengthen access to finance for the informal sector.
The launching ceremony of the informal sector survey findings also saw the handover of 20 tablets by UNDP to facilitate digitalized data collection for Census 2022 by the Maldives Bureau of Statistics. The assets transferred represent the assistance of UNDP to the Government of Maldives to support the collection and portrayal of a comprehensive snapshot of the economic, social, and cultural make-up of the country through the Census, which will guide the planning and development processes of the country.
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