Govt disburses MVR 164.3 mln as Income Support

Ministry of Finance disclosed that a total of MVR 164.3 million was disbursed as Income Support by December 10 this year.

According to the ministry's latest statistics, the allowance has been distributed among 13,177 individuals so far.

The Maldivian government introduced the Income Support Allowance to provide a temporary monthly allowance of up to MVR 5,000, to individuals that lost their employment or income as a result of the ongoing COVID-19 pandemic.

Implemented by the Ministry of Economic Development in collaboration with the National Social Protection Authority (NSPA) and Maldives Pension Administration Office (MPAO), the allowance was initially paid out for three months, across April to June, to eligible individuals.

The allowance was then extended from July through September. In October, Finance Minister Ibrahim Ameer announced that Income Support will be provided until the end of 2020.

The World Bank also approved financial assistance of USD 12.8 million to support the government's Income Support scheme last June. The assistance comprises a USD 6.4 million grant and a USD 6.4 million credit from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries.

The restrictions on local and global travel and tourism as a result of the COVID-19 pandemic had severe repercussions on the Maldivian economy, with many losing their jobs and local companies struggling to stay afloat.

In mid-April, the World Bank estimated that Maldives will be the worst-hit country in the South Asian region, in the ensuing economic regression caused by the pandemic.

In a bid to counteract the financial impact of COVID-19, the Maldives government also introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs.

Maldives estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry, the economic backbone of the country.

Although authorities have noted a significant reduction in tourist arrivals compared to pre-COVID figures, there has been a gradual increase with the establishment of travel bubbles between Maldives and other countries, as well as greater connectivity in terms of flight operations.