The World Bank, on Monday, approved additional financing of USD 21.6 million, to further help Maldives mitigate the economic impact of the COVID-19 crisis on poor and vulnerable workers and their families.
According to the bank, the additional financing will be utilized to expand the country's existing COVID-19 Emergency Income Support Project, which was approved by the World Bank’s board of executive directors in June 2020 with funding of USD 12.8 million.
It will help finance the extended duration of the government’s COVID-19 Income Support Allowance scheme by continuing to provide temporary support of up to MVR 5,000 (approximately USD 322) per month to workers who have lost their jobs or income as a result of the coronavirus pandemic, the bank added.
“Given the continued high prevalence of infection worldwide, as well as in Maldives, hotels and resorts are forecasting weak demand through the peak northern winter season. Some have ceased operating, and many workers are now either on leave without pay, with reduced pay, or their services have been terminated. The employment impact of the crisis is likely to persist well into 2021,” said the World Bank Country Director for Maldives, Nepal and Sri Lanka Faris H Hadad-Zervos.
“Extending the COVID-19 Emergency Income Support Project with more funding will help workers in Maldives continue to receive sufficient income to meet their basic expenses.”
In April 2020, The World Bank estimated that Maldives will be the worst hit country in the economic regression caused in the South Asian region by the global COVID-19 pandemic.
As per the bank's calculations, the collapse of the tourism industry in Maldives will result in gross domestic output contracting by as much as 13 percent, while these numbers stand at 5.9 percent and 2.2 percent for Afghanistan and Pakistan, respectively.
The bank responded to Maldives' economic contraction by extending a USD 7.3 million COVID-19 Emergency Response and Health Systems Preparedness Project in April 2020.
In addition, USD 10 million was granted in contingency financing, under Disaster Risk Management Development Policy Financing with a Catastrophe Deferred Drawdown Option, and Pandemic Emergency Facility of USD 952,000 was also made available to support Maldives.
Currently, the World Bank portfolio in the Maldives consists of 10 active operations with total net commitment of USD 148 million.