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UNDP, Econ Min launches Rapid Livelihood Assessment report on COVID-19

Ahmed Aiham
25 August 2020, MVT 20:32
United Nations Development Programme (UNDP) and the Ministry of Economic Development, on Tuesday, released the final report of the Rapid Livelihood Assessment, highlighting the impact of COVID-19 crisis in Maldives. PHOTO: UNITED NATIONS DEVELOPMENT PROGRAMME
Ahmed Aiham
25 August 2020, MVT 20:32

United Nations Development Programme (UNDP) and the Ministry of Economic Development, on Tuesday, released the final report of the Rapid Livelihood Assessment on COVID-19 impacts in Maldives, revealing that Micro, Small and Medium-sized Enterprises (MSMEs) suffered the worst of the economic repercussions this year.

Efforts to compile the final report were concluded following the release of a preliminary assessment early June, with the aim of assisting the government to facilitate a quick economic response.

The report strives to provide recommendations for the country to effectively transition from "immediate response policies" to a "medium to long-term recovery agenda", realigning the island nation's efforts to achieve its Strategic Action Plan, as well as the Sustainable Development Goals (SDGs).

“The impact of COVID-19 on Small Island Developing States, like the Maldives, is more severe because of the country’s high dependence on tourism and the import of oil and food", said Assistant Secretary General and UNDP Regional Director for Asia-Pacific Kanni Wignaraja during the virtual launching ceremony.

The severe economic and social impacts of the pandemic thus hit the country early and hard before the virus directly did", said the Assistant Secretary General, in reference to Maldives closing its air and sea borders to tourist arrivals on March 27.

The Minister of Economic Development Fayyaz Ismail also chimed in, calling the report "integral" to Maldives' initial economic relief response and with regards to future recovery efforts "to create a coordinated and focused approach to build back stronger and more resilient employment and livelihoods".

The assessment was commissioned by the Economic Ministry, with support from UNDP Maldives and delivers key statistics behind the extent of the COVID-19 crisis on the Maldivian economy, while exploring the impact on employment and MSMEs in-depth.

Key findings of the report;

- Data from all economic sectors indicated that 44 percent reported a complete loss of income, 24 percent reported no-pay leaves, and 32 percent were partially salaried.

- According to employment complaints registered at the 'Job Center', 2,400 tourism sector employees faced income insecurity as a result of COVID-19: an estimated average income loss of more than USD 1.9 million per month.

- Over half of employment complaints at the JobCentre were by youth under the age of 30.

- Groups most vulnerable to economic shocks were identified to include young people, employees on probation contracts, third-party contract employees of resort establishments, casual migrant workers, self-employed individuals, and freelancers.

- Studies found that women were disproportionately affected, with a looming possibility that pressures pushing young women out of the labour force permanently.

“It is critical that young people and women are not kept out of businesses or opportunities for future jobs, as a result of the COVID-19 impact,” said UNDP's Resident Representative in Maldives Akiko Fuji.

“This is the time to invest in them to acquire unmet skills and to focus on the potential of the MSME ecosystems to move towards blue and diversified economic development".

To 'Build Forward Better, Bluer and Greener"

The assessment report also contributes to the economic recovery by noting specific recommendations to ‘Build Forward Better, Bluer and Greener', focusing on mitigating the short-term negative impact on employment and MSMEs.

- Scale up higher education and skill development opportunities targeting those affected.

- Harmonize the income support scheme with labour market services and expand the programme.

- Establish a collaborative relationship with active business associations and provide technical capacity for the associations to function effectively and support MSMEs

- Accelerate support for business adaption and speed up digital transformation

- Establish an economic recovery framework based on core principles of resilience, sustainability and inclusion

In order to revive the Maldivian tourism sector, the report advised the government to, in collaboration with all relevant stakeholders, develop a coordinated strategy for the upcoming high season, which includes the creation of a business task force to streamline efforts.

A study conducted by Visa Waiver processing firm 'Official ESTA' revealed that Maldives experienced a 6.9 percent loss of GDP due to the COVID-19 pandemic's impact on the global tourism industry.

Overall, 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.

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