In the midst of the worldwide coronavirus outbreak, various countries around the world are offering tax relief and coronavirus stimulus packages to support their local economies. On March 15th, Bank of Maldives in association the Tourism Ministry and Maldives Association of Tourism Industry (MATI), announced a short-term financing solution to support the tourism industry. Are these viable to help the Maldives’ economy recover over the next few months?

PUBLISHED April 10, 2020

Yoosuf Riffath
President
Association of Travel Agents
It depends on the interest percentage they take, then it will be fine and will help the industry recover. Also how it applies to travel agents will matter. Not everyone will have a good financial record as per requirement, but a relief package must look into way in which it can help the industry.
We rely on the tourism sector for the sustenance of our economy. Government’s stimulus package is timely in order to keep the economic engine running. However, each entrepreneur should reassess their business model, focus on business continuity and protect workers to minimize the overall economic impact and support recovery.
This sudden wave hits badly to community tourism. Guesthouse industry is still in infant age. None of us has huge saving unlike other related sectors. Most of us are already trapped with bank loans with high interest rate. Guesthouses are located
in local islands & within the local community.

Local tourism distributes revenue starting from airport transfer to excursion boats, grocery stores, souvenir shops, local cafe’s & restaurants. We won’t overcome this situation without state support. This will collapse thousands of small investments along with guesthouses. Considering to all these factors, government should include prominent amount of funds to secure guesthouses & related businesses. I believe we should get grants along with low interest rate loans & flexible terms for pending utility bills to utilise the best out of cash flow.
In this kind of situations. The government should understand the impact on our vulnerable economy.

Private sector cannot use funds under loan or commercially at this stage. It will not sustain private businesses in any mean.

Funds has to be on zero interest and government has to carefully analyze which sector can bring back cash flow fast to the economy to sustain our Nation.
Situation is critical and action delay will hit on more loss to the economy.
It’s a matter of planning and implementation. I think they should be provided a little more and be encouraged to grow. Guest houses, liveaboards and travel agents remain a very crucial part of our tourism. Local SMEs should be protected.

They employ majority of the local workers and most vulnerable people. With local SMEs, our GNP grows. They should be supported and protected. Regulators should also ensure competitive fair-trading opportunities for local SMEs and it is part of their fundamental rights. If we can do things right, For Maldives, I feel (God willing) the recovery from covid-19 would be easier than the Tsunami (2004) we experienced.
The unprecedented impact of Covid-19 has brought even the most developed countries around the globe down to their knees. Maldives being a nation heavily dependent on tourism and having a huge dependency on imports is going to be impacted a lot. The short-term financing solutions which BML announced will definitely assist some companies who are eligible to get the loans but in order to ensure businesses (especially small and medium size businesses) survive and get through this period we need the government to take extraordinary measures to inject cashflow into the businesses at a very low interest rate, with a good grace period and with minimum eligibility requirements. We greatly appreciate government’s work in pushing all commercial banks to grant moratorium to existing loans. We hope this will be followed by the government’s planned economic relief package which will be essential for the survival of many businesses.