In the 2023 PSIP, the Government also highlighted the costs of developing harbours in local islands in order to ease transportation, especially in islands that do not have an airport.
TTR weekly
Over the past few years, the Maldives has seen some major upgrades in terms of infrastructural development with several major projects being carried out such as housing projects in the greater Male’ area as well as in some of the larger cities of the Maldives.
As a small island nation that was extremely underdeveloped and bravely started a tourism industry with no proper facilities, the islands of the Maldives have come a long way in terms of development over the years. Everything from houses to roads and commercial buildings are starting to be on par with global standards as the Maldives has accomplished getting recognised for the beautiful get-away that the country offers.
While a major part of the development surely came from the development of tourism in the country, these developments have not only helped visitors discover the beauty of the country but also helped Maldivians improve their standard of living each passing year.
In recent years the Maldives has seen significant infrastructure developments including airports, roads and ports which have helped the country’s economy boost even further. Some of the major developments that the Maldives has seen in terms of infrastructure include the Sinamale’ bridge which connected Hulhumale’and Hulhule’ Airport to Male’ City, making transportation and access to the airport easier than ever.
In addition to this, several housing projects were also started out in the Maldives, making it easier to find housing in the congested greater Male’ area at more affordable prices. Moreover, in 2022 the international airport of the Maldives also received a much-needed upgrade with parts of the airport expansion project that started out in 2016 finally coming to fruition. One of the biggest highlights of 2022 in terms of completed projects was the ‘Noovilu’ seaplane terminal, making it easier to cater to a large number of guests, especially during the festive season.
With such exciting projects already being completed, there are also several projects that were started in 2022 with little progress by the end of the year such as the Greater Male’ Connectivity (GMC) project, leading many to wonder what plans the Government has in terms of infrastructure for 2023 and what the plans are for the large ongoing projects that are yet to be completed.
PSIP 2023- Ease of transportation
According to the Public Sector Investment Program (PSIP) 2023, the largest portion of the PSIP budget will go towards the GMC project that is to connect Thilafushi, Villimale and Gulhifalhu. The estimated spending for the year through the GMC project includes MVR 591.7 million loan from the Exim Bank of India, MVR 182.3 million in grants from the Government of India, and an MVR 17.9 million from the Maldivian Government budget – bringing the total cost to MVR 792.0 million.
The second biggest budget allocated under the PSIP 2023 is towards the development of airports. The expansion and construction of 5 airports in the Maldives, including Velana international airport is expected to cost a total of MVR 921.9 million.
In addition to this, the Government also highlighted the costs of developing harbours in local islands in order to ease transportation, especially in islands that do not have an airport. With the construction of brand new harbours in some islands and the development of existing harbours, the Maldives International Port Development project comes to a total of MVR 308.1 million.
While the development of the transportation industry in the Maldives is extremely important as the country’s tourism industry grows with each passing year, one thing all these projects have in common is that they’re all fully or partially funded by the Exim Bank of India. This has been a trend that keeps popping up when it comes to debt and borrowing in the Maldives. Statistics by the Ministry of Finance showed that the largest portion of the debt in the Maldives is owed to the Exim Bank of India, and the 2023 PSIP shows that that trend is not going to slow down within 2023 either.
In the transportation sector alone the Maldives has millions owing to the Exim Bank of India with MVR 591.7 million for the GMC project, MVR 617.8 million to be borrowed by the bank for the Maldives international ports development project and millions in the airport development project as well.
While the development of the transportation in the country has been beneficial in terms of economic growth and an improved tourism industry, the proper management of government debt will become more important, in order to sustain macro stability of the economy.
