One of the primary reasons for relying on foreign workers is the inadequacy of the Maldivian labor market, which fails to cater to skilled and low-skilled labor.
Source: Ministry of Higher Education
According to Ministry of Economic Development, the Maldivian economy exhibited remarkable resilience in 2021, bouncing back strongly from the adverse impacts of the COVID-19 pandemic., the number of employees under the Maldivian pension system increased to 119,062 by May 2022, a growth of 6 percent from the previous year. Similarly, as per Maldives Bureau of Statistics (MBS), the working age population (15-64 years) in Maldives stand at 390,592 in 2022. However, subsequent data has shed light on several challenges faced by the Maldivian Labor Market.
MALDIVIAN LABOR MARKET – A SNAPSHOT
Migration - boon or bane?
The local media has been actively reporting on the fact that nearly one-fourth of the Maldives population, approximately 26 percent comprises foreigners, translating to 1 foreigner for every 3 Maldivians. Additionally, the media has shed light on the issue of workers' remittances. The latest statistics published by the Maldives Money Authority (MMA) for April 2023 have indicated that the current total for workers' remittances stands at USD 598.7 million, compared to USD 556.6 million in 2022.
According to International monetary Fund (IMF), although migration may be politically controversial, it is economically rational. High-skilled migrant workers bring diverse talent and expertise which supplement the stock of human capital in the country. At the same time, low-skilled workers fill essential occupations for which locals are in short supply and allow locals to be employed at higher-skilled jobs. Moreover, the gains are broadly shared by the population though higher per capita GDP and standards of living. Thus, overall, migration contributes to spur innovation and economic growth.
Despite the burgeoning number of foreign workers, which presents social and economic challenges, particularly for a small island nation like Maldives, it is imperative to delve into the reasons why the demand for foreign workers remains unquenched.
Maldivian labour market issues
One of the primary reasons for relying on foreign workers is the inadequacy of the Maldivian labor market, which fails to cater to skilled and low-skilled labor. While there are challenges on both the demand and supply sides of the market, the subsequent discussion focuses on key issues that have been identified.
1. Skill Gap (Hard and Soft): in 2021 MFR chronicled the issue of the skill gap in the tourism industry. However, this issue is persistent across multiple industries. As the saying goes, 'hard skills will get you the interview; soft skills will get you the job', both of these skills are equally important. Yet, Maldivian education system focuses less on skills and heavily on knowledge, leading to a gap in this area.
2. Work Experience: education alone does not suffice anymore. As explored here, the sole focus on book learning to prepare entrants to the job market may be myopic and needs swift rethinking. Recruiters seek candidates with experience, but this has also become a sort of gatekeeping for fresh graduates.
3. Compensation and Benefits: Maldives’s public sector is on the pay harmonization track, though the same cannot be said for the private sector. Although the future appears to be promising, benefits wise there is much to be done. For instance, one effective way to encourage women to enter the labor market is by implementing flexible work practices.
4. Brain Drain: Brain drain occurs when highly skilled or educated individuals from one country migrate to another seeking better job opportunities or working conditions. Many Maldivians who have travelled abroad for studies have opted to migrate in order to get a quick and better return on their educational investment. This has been largely due to the poor pay, working conditions and growth opportunities in Maldives.
5. Inclusivity: the harsh reality as a nation is, we lag behind in disability inclusion. It is simply much more than hiring people who are differently abled. A workplace that is inclusive values all of its employees based on their strengths and provides equal opportunities for success, learning, fair compensation, and advancement to employees with disabilities, whether their disability is visible or not. Authentic inclusion involves accepting and celebrating differences.
6. Willingness: it is a common trend observed in many countries that the native population tends to prefer skilled work as opposed to low skilled work. This is not unique to Maldives and hence there are jobs and industries Maldivians opt out from.
7. Discrimination: at the end of the day, despite having the right qualification and experience, some organizations prefer foreign workers over locals for an array of reasons. This is mostly so in the private sector.
In order to address the issues in the labor market, both public and private sector must work together to develop capacity. While some countries are opting to indigenization of the work force, MFR also explored the topic, capacity development and some tools which can be used to do so. Maldivian government has commenced on this effort with the apprenticeship, training and upskilling program under the Maldives COVID-19 Emergency Income Support Project which was introduced on 26 April 2022.
