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ADB President Reaffirms Strong Support to Maldives

News Release | 26 August 2019

MALÉ, MALDIVES (26 August 2019) — Asian Development Bank (ADB) President Mr. Takehiko Nakao today met with Maldives President Mr. Ibrahim Mohamed Solih, Speaker of the Parliament Mr. Mohamed Nasheed, Finance Minister and ADB Governor Mr. Ibrahim Ameer, and other senior officials during a 2-day visit in which he committed to strong ADB assistance to the country.

Mr. Nakao noted that economic growth in Maldives over the past 5 years has been robust, averaging 6.4%. ADB forecasts gross domestic product (GDP) growth to maintain an average of 6.4% during 2019–2020 on the back of continued expansion of tourism and construction.

Maldives attained upper middle-income status in 2010. The country’s GDP per capita reached $10,449 in 2018, up from an estimated $200 in 1978. Life expectancy is now more than 78 years, and the literacy rate is almost 100%.

“I commend the government for Maldives’ remarkable economic and social progress over the last few decades,” Mr. Nakao said. “ADB reaffirms its support to help address the country’s key development challenges, which include a dispersed population spread over several islands, a narrow economic base, and vulnerability to climate change.”

Mr. Nakao advised that the government needs to exercise fiscal prudence in light of the country’s weakened fiscal and external position and increasing debt. Maldives’ fiscal and external current account deficits have widened to 5.5% of GDP and 25% of GDP, respectively, while debt levels have risen, reaching 72.1% of GDP in 2018.

Under its country operations business plan for 2020–2022, ADB will continue to invest in climate-friendly infrastructure, including a waste-to-energy facility in Thilafushi and a liquefied natural gas project, with an indicative cumulative assistance amount of almost $120 million.

ADB has been supporting the Government of Maldives since 1978 when it became a member. Over those more than 40 years, ADB has committed loans, grants, and equity investments in the amount of $277 million and technical assistance worth $29 million. These were to support energy, including renewable, harbors, development of the Maldives National University, and small and medium-sized enterprise finance. This year, ADB has committed $10 million for the South Asia Subregional Economic Cooperation National Single Window Project to support improvement in international trade procedures using a unified information and communications technology portal.

Mr. Nakao visited Malé North Harbor supported by ADB’s Domestic Maritime Transportation Project, which was designed to increase harbor capacity, and the State Electric Company Limited power plant supported by ADB’s Third Power System Development Project, which extended power generation and distribution in Malé. He also visited the Greater Malé Environmental Improvement and Waste Management Project in Thilafushi, which is establishing modern waste management systems.

Tomorrow, Mr. Nakao is scheduled to take part in the High-Level Policy Dialogue at the Resilient Atoll Nations in Productive Oceans Conference, supported and financed by ADB. The 3-day event on 27 to 29 August brings together experts and high-level government officials from the four atoll nations—Kiribati, Maldives, the Marshall Islands, and Tuvalu—to share experiences on managing disasters and adapting to climate change.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.