JOINT PRESS RELEASE

MINISTRY OF ECONOMIC DEVELOPMENT AND UNDP MALDIVES

June 4, 2020: The first phase of a rapid livelihood assessment to understand impact of the COVID-19 crisis in the Maldives has revealed the upshots of the complete closure of the Maldives tourism industry on employment, livelihoods and the potential knock-on effects on families and communities.

With repercussions of COVID-19 felt immediately across sectors from tourism to trade, the COVID-19 crisis impacted the livelihoods of many, hitting the most vulnerable the hardest. In response, the government carried out the rapid livelihoods assessment to gain an understanding of the socio-economic impacts of the pandemic, to support timely economic response planning for the Maldives.

“The COVID-19 pandemic and the ensuing economic downturn has been unprecedented at many levels. The rapid livelihood assessment undertaken with the assistance of UNDP and partner institutions is an important step forward in understanding the ground impact on livelihoods and businesses. This study would also be central in designing policy initiatives aimed at the long-term recovery of the Maldivian economy and worker’s welfare,” stated Uz. Fayyaz Ismail, Minister of Economic Development.

The report is commissioned by the Ministry of Economic Development and the Government of Maldives with support from UNDP Maldives. The broader rapid assessment aims to understand the extent and nature of impact of the COVID-19 crisis on the Maldives economy, and to explore the impact on employment and Micro, Small and Medium Enterprises (MSMEs).

UNDP Maldives provides a technical lead in close collaboration with relevant government and non-government partners, including private sector partners, drawing from global experience in carrying out similar impact assessments during crises.

UNDP’s ‘Human Development Dashboards on Vulnerability to Pandemics’ released in May revealed Maldives as one of the highest vulnerable during the pandemic, as a country heavily dependent on tourism. Tourism being the bread and butter of Maldives, the country is among the worst affected  globally during the crisis, which saw impacts on global travel as well as strict containment measures put in place locally: the Maldives tourism industry completely closed for three months until July 2020 - a move unprecedented in the country’s history.

The tourism sector was targeted in the first phase of the assessment as the largest industry and employer in the country, and as the sector most exposed to the external shock. The study analyzed existing data and reached out to employers, employees, Government and private sector stakeholders, business and employee associations relevant to the sector via phone and online to conduct surveys and interviews.

The findings revealed that the halt in tourism due to the COVID-19 crisis has had a grave impact on lives of tourism workers, and increased vulnerability across many dimensions. The following outlines some of the key findings of the assessment:

·         More than 45,000 employees in tourist resorts alone are being affected as a direct result of COVID-19, including approximately 22,000 local employees in the payroll of resorts.

·         Job loss and redundancy was mostly observed amongst those on probation contracts and amongst younger age groups. Job security beyond July is uncertain for majority of the resort employees given that operations are not expected to normalize for a longer period than initially anticipated.

·         Services of freelancers, seasonal workers and local vendors providing goods and services to resorts have been temporarily stopped, majority of whom work on mutual understanding basis indicating high prevalence of loss of work amongst informal sector.

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

·         Resort payroll employees who lost jobs and are on no pay will experience an average income loss ranging from US$ 600 to US$ 1,000 per month for the period April – June 2020, compared to the same period last year.

·         Employees on reduced pay are likely to experience an income loss of 60 percent for the period April -June 2020.

‘While vast number of workers have been affected by the COVID-19 crisis, the assessment indicates that job losses were greatest amongst younger people and employees under third party contract services of resorts. I hope the report is useful to policy makers, the industry and society in building the tourism sector back better so that young people, both men and women, can see their future of work,’ said Akiko Fujii, UNDP Resident Representative in Maldives.

The phase I assessment also outlines insights and recommendations broadly for the government and for employers in the tourism sector for addressing the needs of employees when resuming operations and adapting in the ‘new normal’, and to address underlying systemic issues on employment to ‘build back better’ in the longer term. Some of the immediate response measures include development of a joint tourism recovery plan collaboratively by the Government and the businesses to mitigate the prolonged negative impacts of the crisis on employment; exploring alternative models for operations and employment under the new normal including adopting occupational health and safety standards for the tourism sector in line with international best practice; and implementing  strategies targeted at employees during the waiting period including short term training, personal development coaching and psychosocial support. The ‘build back better’ responses include upskilling the Maldivian tourism workforce, facilitating labour governance reforms; strengthening labour market services and social protection measures, integrating contingency planning and financing for future crises.

Rapid Livelihood Assessment - Impact of the Covid-19 Crisis in the Maldives ASSESSMENT PHASE I can be viewed at: https://trade.gov.mv/news/rapid-livelihood-assessment-medundp

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NOTE: The Rapid Livelihoods Assessment is being conducted with support from the National Bureau of Statistics, Maldives National University, Ministry of Tourism, Ministry of Fisheries, Marine Resources and Agriculture, Ministry of Youth, Sports and Community Empowerment and the Ministry of Arts, Culture and Heritage.

MEDIA CONTACT

MED

Shuhad Ibrahim, shuhad.ibrahim@trade.gov.mv

UNDP

Aminath Sanu Ibrahim, aminath.ibrahim@undp.org

ABOUT MED:

Ministry of Economic Development is entrusted with the mandate to develop and promote inclusive and sustainable economic growth to Maldives, through prudent policies and favorable business climate. It is the objective of the Ministry to create opportunities for the growth of enterprises and individuals. Please visit www.trade.gov.mv for  the Ministry’s current initiatives and activities or follow at @MoEDmv

ABOUT UNDP:

UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people and planet. UNDP has been present in the Maldives since 1978. We continue to remain with the people of Maldives and will work to urgently and effectively assist in the national response to COVID-19 as part of our mission to eradicate poverty, reduce inequalities & build resilience to crises and shocks. Learn more at www.mv.undp.org or follow at @UNDPMaldives