United Nations in Maldives: COVID-19 Socio-economic response and recovery framework

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The COVID-19 pandemic and the subsequent global recession is creating an unprecedented health and socioeconomic impact on the Maldives. The number of infected cases has increased to 3809, with 16 deaths, as of 31 July 20201 . The sudden halt of international tourism brought an unprecedented economic shock, severely weakening the fiscal and external position, threatening the economic and developmental gains in the Maldives2 , increasing food insecurity due to disruptions in the supply chain.

Social and livelihoods costs to people are immense: children’s learning are being severely affected, and people have lost incomes and require urgent protection.

As the crisis continues to prolong, it deepens the impact of social and economic aspects, and UN Maldives is at the forefront of supporting the government’s efforts to recover better. This Socioeconomic Response and Recovery Framework (hereafter ‘the Framework’) is developed in parallel with the Government’s National Resilience and Response Task Force, firmly anchored to the national recovery measures, and cognizant of the government’s Strategic Action Plan. The Framework will be a living document, concurrently following the outcomes and recommendations from the ongoing sectoral and target group assessments and priorities defined by the government.
The Framework pays special attention to Maldives’ unique vulnerabilities as a Small Island Developing State (SIDS); the impact on livelihoods; Micro, Small and Medium Enterprises (MSMEs); the tourism sector; and the vulnerable groups that are defined in the UN Maldives’ report on ‘Addressing the SocioEconomic Impact of COVID-19 on the Maldives’; and ensures that recovery is sustainable and inclusive, green, resilient and cohesive.

Vulnerabilities as a SIDS. As a small island state, Maldives’ unique physical, demographic, economic and social features have been laid bare by the pandemic. Insularity and smallness in terms of geographic area and population size, and a narrow revenue base, inhibit a high degree of openness which results in frequent exposure to external shocks. 3 Geographical spread has led the concentration of development in the capital city of Malé, changing the rural and urban dynamics with the high rate of internal migration to greater Malé, resulting in major social dislocation and disparities in access to basic services. COVID-19 has highlighted the underlying vulnerabilities of the tourism-led economic model4 , which has brought Maldives increased economic growth over past three decades, against the backdrop of a growing migrant population that filled the human resources gap, alongside widening inequalities and vulnerabilities, both in terms of income and access to basic services5 . Climate vulnerability such as water insecurity has become an immediate health risk in the atolls, which depended on emergency water supplies.

Accordingly, this Response and Recovery Framework takes a full consideration of the following vulnerabilities of Maldives as a SIDS:
- Narrow economic base with high dependency on tourism
- Substantial reliance on food, medicine and health equipment, and oil imports; and limited local food production
- Limited fiscal space, reserves, and risk in debt sustainability
- Climate vulnerabilities, stress on natural resources; such as land, water and biodiversity
- Small national workforce, limited skill sets, and heavy reliance on migrant workforce
- Geographical dispersion and high cost of service delivery
- Space constraint, high population density, limited urban accommodations.