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Tourists Lead Recovery
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MALÉ, MALDIVES
Tourists were beginning to arrive in the Maldives in greater numbers by early March. “Flights are fuller, and hotels are reporting 50% occupancy, up from around 30% after the tsunami,” says Richard Vokes, a director in the Asian Development Bank (ADB)’s South Asia Department, who is helping prepare ADB assistance for the Maldives.
This tiny Indian Ocean nation depends heavily on thousands of tourists, many from Europe, who are drawn to its spectacular atolls, groups of islands set amid sandy beaches, clear shallow waters, and necklaces of coral.
Tourists helped this isolated country with few natural resources to triple its per capita income in 2 decades to reach $2,400 in 2003, enabling it to graduate from “least developed” status last year.
Tourism is by far the biggest contributor to the Maldives’ gross domestic product— demonstrating not so much its strength as the vulnerability of an economy so dependent upon one sector.
That susceptibility was brutally exposed on 26 December 2004 when the high wave washed over a country that is 1.5 meters above sea level at its highest point.
The tsunami affected one third of the country’s 100,000 people. It destroyed many homes and washed topsoil from agricultural plots and home gardens, leaving saltwater covering the earth. Floodwater disrupted the drinking water supply, contaminating wells and infiltrating freshwater aquifers.
The giant wave hit key sectors hard. It cut down fishing, which accounts for half of exports, after sweeping away fishing fleets on more than 50 islands. It affected more than 100 agricultural islands.
But it hurt tourism most of all, causing direct damage of $100 million, according to a joint government-donor assessment. The next worst-hit sector was housing at $65 million.
The tsunami damaged 20% of the country’s 91 resorts—and tourist arrivals plunged. By end-January, the country counted only 7,600 tourists, a big drop from 17,000 at the same time a year earlier.
On the ground, the effects are distressingly clear, as ADB Vice-President Liqun Jin and Mr. Vokes observed during a recent reconnaissance mission.
On Guraidhoo Island, part of the South Malé atoll, lassitude hangs over the main street as shopkeepers wait for tourists, whose numbers had dwindled to a trickle. Fisherfolk sit around idle and dejected because the wave not only destroyed their homes and boats, but also closed down a nearby resort where tourists bought their catch.
The cash-flow situation is serious for a Government faced with escalating costs for the relief effort and sharply reduced income. Mr. Jin was able to reassure the Government in January that ADB will provide swift assistance of $20 million in grants for reconstruction and rehabilitation in 2005.
This is three times the amount of loan assistance that ADB provides to the Maldives in a normal year.
Key to the Maldives’ recovery is the swift return of tourists. “Tourists may stay away, not because they fear another tsunami, but because they may think that services are at a low level because of the disaster,” says Mr. Jin. “It’s important to reopen the damaged resorts and lure the tourists back through advertising.”
Already, he notes, 80% of the resorts are now functioning normally.
"It’s important to reopen the damaged resorts and lure the tourists back through advertising"
Ralf Corsten, a former major tour operator who is now adviser to the World Tourism Organization, believes that, with proper marketing, the Maldives can recover from the tourist downturn in months rather than years.
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