The brewing conflict in Eastern Europe has cast a looming shadow over the entire world, spreading unease and fear of war on a global scale.
Source - Reuters
Russia has recently launched attacks on multiple targets in Ukraine, bombing military barracks in Mykolaiv and laying siege to the city of Mariupol. Dozens of military personnel were injured or killed in the attack on Mykolaiv while the destruction of Mariupol included a theatre and a maternity ward, with an unconfirmed number of casualties. Many residents of Mariupol have also been forcibly relocated to Russian territory.
The adverse effects of these horrific events are spreading to the rest of the world and the global economy, in part due to the sanctions placed on Russia by other Western countries. Russia is one of the world’s leading exporters of gas and oil, but the USA has implemented a ban on Russian oil imports with the United Kingdom close behind as they aim to cut down Russian oil imports to zero by the end of the year. Russia is also responsible for 30 percent of the world’s wheat and barley exports, as well as a large portion of wood, aluminium and nuclear technology exports. It is to be expected that the sanctions and war will impact these markets as well, and a widespread price spike for all of these commodities will be felt worldwide.
The Maldivian tourism industry is yet another industry that will be impacted if the ongoing conflict continues. Maldives has welcomed 350,721 tourists within the first quarter of 2022, and Russian tourists accounted for 14 percent of inbound tourists as of 14 March 2022. Russia holds the highest market share in the first quarter of 2022, and Ukraine is ninth in ranking with a 2.3 percent market share. However, most Russian-based airlines have shut down all international flights within the past two weeks, and Russia’s national airline, Aeroflot, has done the same except for flights to Belarus since 8 March, and flights to Uzbekistan and a few other neighbouring countries since 16 March. In the next few weeks, or even months, the Maldives will have significantly fewer tourists from Russia as long as these restrictions are in place, and the impact of losing the biggest source market of the quarter is yet to be seen.
The travel restrictions and complications brought about by this armed conflict has indefinitely halted a potentially substantial source market in Ukraine. Though the immediate impacts are not as significant in numbers when compared to Russia, Ukrainian tourists have been travelling to Maldives in growing numbers over the last few years and may have been able to make a considerable impression on the Maldivian tourism market. However, the potential growth was stopped in its tracks when the attacks began and Ukrainian airspace became increasingly dangerous.
Moreover, in light of the conflict raging on and the sanctions, the value of Russia’s currency plummeted to an all-time low. One Russian Ruble (RUB) was worth USD0.0072 on 7 March 2022. Though it has been steadily regaining its value since the drop, as of 21 March 2022 RUB1 is USD0.0096, which is still lower than it had previously been. The Ukrainian Hryvnia (UAH) has also faced a drop in value during the conflict. Prior to the invasion, UAH1 was worth USD0.035, and the value dropped to USD0.033 on 24 February 2022.
For potential tourists, travelling to the Maldives has become a much more expensive endeavour, and there is a big possibility that the middle-class Russian and Ukrainian tourists who used to frequent Maldivian shores would no longer be able to afford travel to the Maldives.
The Maldivian tourism industry could potentially lose two major source markets indefinitely while this conflict goes on, and other markets must be researched and engaged in order to compensate for that loss. The Maldives Marketing and Public Relations Corporation (MMPRC) is reported to be working on getting other markets to counteract the shortage if the Russian market is unable to be reactivated soon.
Nevertheless, this material loss cannot be compared to the lives and livelihoods that have been lost as a result of this brutal struggle between Russia and Ukraine. President Ibrahim Mohamed Solih has announced the country’s collective support for the Ukraine and the Maldives has joined the 141 nations in the UN calling for the immediate conclusion of the atrocities being committed against innocents and the withdrawal of Russian troops from Ukraine. The thoughts and prayers of the Maldivian people go out to all those affected — we hope and pray that the violence comes to an end soon.
