Maldives request IMF's aid to combat COVID-19

Maldives requested for the International Monetary Fund (IMF) aid in managing the country's finances amidst COVID-19 pandemic.

Speaking at the press briefing on the Asia Pacific, Director for Asia and Pacific Department Changyong Rhee confirmed that they received a request from Maldives for USD 30 million from IMF's Rapid Credit Facility (RCF).

Rhee further expressed hope that they can discuss the request with the board within the next two weeks, and process it soon.

Additionally, he spoke about ways in which the Maldivian economy can be diversified.

"As for the question about diversification, in our last Article IV missions, our team discuss about the several ways to diversify their economy, including to make agriculture sector more adapted to the, you know, the tourism sector. And then also some fisheries, investment in fisheries to increase the value added or as export."

According to him, reforming fundamental structures such as increasing the quality of education and providing energy stability in the region need to be continued.

Governor of Maldives Monetary Authority (MMA) Ali Hashim declared on April 8 that local economic growth might reach negative nine percent in the estimated worst case scenario of the economic recession caused by the global pandemic COVID-19.

The "worst case scenario" is that the whole country stays under lockdown until the last quarter of the year, with no tourist arrivals. According to the Governor, a solution must be found in the tourism sector to improve the country's economic growth, as 30 percent of direct revenue and 60 percent of indirect revenue is generated by the industry alone.

With over 70 percent of the country’s GDP attributed to revenue generated by the tourism industry, Maldives’ economy continues to face severe repercussions due to travel restrictions imposed over the COVID-19 outbreak. It is estimated that the country will face a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency.

In a bid to counteract the financial impact of the COVID-19 pandemic on the local economy, Maldivian government introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs. The administration has asserted that it will prioritize companies that do not terminate staff members in providing the recovery loans allocated for struggling businesses.