Case Study of the Republic of Maldives

1. Introduction

The Republic of Maldives is a gathering of 1192 small islands in the Indian Pacific Ocean. A total of 88 uninhabited islands had been converted into exclusive resort islands (MTPB, 2008).The development of tourism has been growing rapidly in the last 20 years and tourism is the main, and almost only source of revenue and foreign exchange on the island today. Small island states and dependencies are over represented as tourist destinations and often have very little other form of economic activity and therefore often become depended on tourism for economic development (Weaver, 2006).

This paper will explore current issues facing the Maldivian tourism and how tourism development theory is being put into practice. The aim of this project to analyse an overview of the destination, tourism destination market to describe majority of tourists who goes to destination and the current issues relating to Maldivian tourism.
Such issues includes environmental change influences sea level rise and the impact of tsunami to the Maldivian tourism and country as well as the Maldivian’s hyper dependency on tourism economy and the experiences of leakages.

2. An overview of the Republic of Maldives

The Republic of Maldives comprise a total area of 298sq km scattered across a total of 1192 small islands, located between 7’N and 1’S in the northern Indian Ocean (Domroes, 2001). The Maldives came under the influence of the Portuguese, the Dutch seaborne empires and the British protectorate until the year of 1965 (Wikipedia, 2008).

The rapidly increasing population estimates approximately of 300.000 is dispread among 202 islands are heavily populated and approximately of 1000 small islands are available for proposed development projects (Morner, Tooley and Possnert, 2003). The Maldivian ethic identity is cross-culture reflecting the people who settled on the islands. There is few indigenous called Vedic however the earliest settlers were from South India and Sri Lanka. Official religion is Islam which are required to entire inhabitants of the Maldives and common and official language is Dhivehi which an Indo-European language with some similarities with Elu (Wikipedia, 2008).

Traditionally, fisheries and agriculture plays an insignificant role in the economy and is primarily associated with coconuts production and bulk of tropical fishes in the Maldives (Domroes, 2001). The first resort were opened in 1972 with Bandos island resort and Kurumba village which 1192 international tourists visited by end of the year (Ghina, 2003). The development of tourism has fostered the growth of the Maldivian economy with contributing majority of both direct and indirect employment and income generation opportunities (Weaver & Lawton, 2006).

3. Destination markets

The white sandy beaches, clear lagoons, beautiful coral reefs, mangroves presents variety of recreational activities that highlights scuba diving, snorkelling, swimming, fishing, sailing and wildlife in the Maldives and their resort islands (MTPB, 2008). Sun, sea and sand tourism market has rapidly increased due to launching long – haul and non stop flights from Europe and Asia (Domroes, 2001).Sun, sea and sand tourism market has significantly increased, due to launching long-haul and non stop flights from Europe and Asia. As a result, the year of 2006, the Maldives estimated 650,000 international tourists (MTPB, 2008).

The Maldivian tourism is seen as unique therefore attractive destination to international tourism market. A total of 86 uninhabited had been converted into luxury resort islands. Resort islands have been exclusively developed with very high standards of accommodation, facilities for recreation, food and leisure and services in exotic uninhabited islands. The due to complete package organised by European, Asian tour companies that is it guarantee of privacy on the island, therefore it attracts only upmarket international tourists (Domroes, 1999). The destination advertises the typical image of island life style for international tourists. In addition, Lockhart and Drakakis-Smith (1996) argued that the Maldivian tourism offers ideal image of island experience via common elements of island tourism such as physical separateness, a favourable climate and physical environment.

However, the Maldivian tourism market has become strongly depend upon external decision markers such includes European tour companies which accounts for 70 to 75 per cent of arrivals (Domroes, 2001). German tourists accounts 20 to 25 percent followed by Italian, British, French and Switzerland tourists generates the rest of European visitors to the Maldives. Whilst Asia generates 20 to 25 percent of arrival with majority of tourists are from Japan (MTPB, 2008).

4. Destination Issues

4.1 Tsunami

The Maldives is extremely vulnerable to sea level rise due to its low elevation. As water heats up it expands and threatens the coastline and even the existents of some of the islands (Agnew and Viner, 2001). A total 202 of the islands are inhabited and 88 uninhabited islands had been converted into exclusive resort islands (MTPB, 2008). Neither of islands is over 2meters above sea level which makes the Maldives to expose natural disaster, the effects of climate change and especially of sea level rise and tsunami(Ghina, 2003).

In waters regularly being affected by earthquakes the Maldives are very vulnerable to tsunamis (Obura, 2006). The tsunami of late December 2004 hit all of the 1192 islands and severely damaged 39 and completely destroyed 14 islands (Pardasani, 2006). When the tsunami hit it caused erosion to the beaches and coastlines, salinized the groundwater and damaged most of the livelihood on the island which was mostly made up of fishing and tourism (Obura, 2006).
It also spread waste and sewage all over the islands and into the waters that needed to be cleaned up fast to prevent risk of public health (Chatterjee, 2006). United Nations agencies in the Maldives report that 8% of the population are being evacuated and as more than 19% of the population are without drinking water ( Pardasani, 2006). The tsunami is not the first, and probably not the last to hit the islands. Although being the largest, this was the third largest tsunami to hit the islands since 1938 (Obura, 2006).

4.2 Dependency on tourism for the economy

Traditionally, fisheries and agriculture plays an insignificant role in the economy and is primarily associated with coconuts production and bulk of tropical fishes in the Maldives (Domroes, 2001). The Maldives are considered small island developing state and less developed country which has limited economic resources (Shareef and McAleer, 2005). Tourism in the Maldives has grown from 1097 tourists in 1972 (Ghina, 2003) to 485 000 tourists in 2004 and contributed 46.4% directly to the GNP the same year (Weaver and Lawton, 2006).

Tourism has been developed to become a key industry to the Maldives in terms of 90% foreign exchange earning and 40% of government revenue as well as major source of employment with more than 50% of the workers working in the tourism sector (Ghina, 2003). Tourism is therefore the main, and almost only source of revenue foreign exchange on island. Despite the evidence, the Republic of Maldives can be said to be hyper -dependent on tourism (Weaver, 2006).

Many developing countries are promoting tourism for economic benefits and economic benefits are the adverse social, cultural and environmental impact to the country (Liu and Var, 1986). Khan (1997) argue that mass tourism development in the third world improves the local economy by creating job opportunities, improving the quality of life, creating educational opportunities and entering modern society such as infrastructures and transportations.

Distribute justice and self reliance however is questioned to the Maldivian tourism. A total of 88 uninhabited resort islands are operated and owned by foreign investors under the Maldivian government policies and regulations (Domroes, 2001; MTPB, 2008). However, contribution of economic benefits are relatively small, because of high import demands and significant leakages (Brown et al, 1997) Moreover, this particular tourism development experiences more for the benefits to capitalist tourism generating by foreign operators and investors and not for the host communities (Khan, 1997). Most of necessities goods are imported, including food, consumer goods, construction material, and recreational products from more developed countries to the Maldives which results in local economy is leaking out over major proportion of tourism expenditure (Shareef and McAleer, 2005).

5. Strategy plan for stated issues

5.1 Maldives disaster management centre

After the tsunami of 2004 the government has set up the National Disaster Management Centre to facilitate and assess emergency events. The recovery and reconstruction program and management structure were implemented by the Maldivian government to respond faster to the future natural disaster influences the country (Tsunami Maldives, 2005).

The main object of national recovery and reconstruction program is to plan and coordinate of the redevelopment to revitalise damaged area, infrastructure and building includes of housing by natural disaster such tsunami on islands as well as revival of livelihood and economy sustainability to the island. Moreover, to meet people of the Maldives and tourists needs and demands, the government invested US$374.9 million divided into 4 major units includes the National Disaster Relief Coordination Unit (NDRC), the National Economic Recovery Unit (NERU), The Housing and Infrastructure Redevelopment Unit (HIRU) and the Transport and Logistic Unit (TLU) to redevelop the Republic of Maldives (Tsunami Maldives, 2005).

5.2 The impact of Maldivian tourism after tsunami

The economic impacts from tsunami tragedy to the Maldives were comparatively higher than the most other countries affected by the disaster. This is because mainly to the fact that one way or another tourism related business in the Maldives estimates more than 70 percent economic activities (Ghina, 2003). According to Tsunami Maldives (2005), 7,568 tourism related workers temporary unemployed or lost their jobs.

The usage of bed capacity after the tsunami was low of 10 to 15%, therefore, tsunami resulted in 19 out of 88 inhabited resort islands were in need of repair to operate according to Chatterjee (2006) .Tourism revenue is heavily hit which resulted in extremely high on livelihood. However, the government started to adjust its marketing approach to include not only high class/ upmarket tourist, but also budget travellers in order to increase international visitor’s numbers to recover from the tsunami tragedy since 2005 (Chatterjee, 2006). The government also plans to release 35 new islands for tourist resort development which 20 islands to tender bids and 15 islands to be awarded to a public company for new concept of tourism development for future sustainability in the Maldives (MTPB, 2008).
As all results, the Maldives has enjoyed a massive recovery in tourism after tsunami disaster. The number of international arrivals is expected to increase impressively in 2006 driven by strong growth in middle-class and economical travellers, in particular France, Germany and UK, where the Maldives yet remains a favourite holiday destination for European (MTPB, 2008). In addition the revenue form tourism related economy represented almost 20% of GDP in 2005, the tourism related revenue had generated 66% of total exports and government expenditure on tourism was expected to reach MVR 519million in 2006 (Pardasani, 2006).