The government of the Maldives and the World Bank have signed two agreements totalling USD68 million to accelerate fiscal reforms, boost the private sector and increase competitiveness in the fisheries sector.
The agreement was signed by Minister of Finance Ibrahim Ameer and World Bank Country Director Faris H. Hadad-Zervos. The agreements include the Transforming Fisheries Sector Management in South-West Indian Ocean Region and Maldives Project (TransFORM) and the Maldives Competitiveness and Growth Project (MCGP). The two projects aim to support critical reforms to state-owned enterprises (SOEs) and to strengthen the competitiveness of small and medium enterprises (SMEs) and the fisheries sector in the Maldives.
Speaking at the ceremony, Minister Ameer said that the government is working on a comprehensive plan to improve the functioning of SOEs and diversify the economy. He said the two projects will help create more opportunities for businesses, strengthen the fisheries sector, and bring about important reforms that ensure long-term financial and economic stability.
Also at the ceremony, Country Director Hadad-Zervos said the Maldives has leveraged its beauty and natural assets to drive its impressive growth primarily through tourism. He also said the two projects will contribute to the country's aim to evolve this growth through greater diversification, transformation within sectors, and resilience against climactic and fiscal shocks.
The TransFORM project is a USD64.8 million initiative, out of which USD53 million is allocated to the Maldives, aimed at improving fisheries management in the South-West Indian Ocean region. Fisheries, especially small-scale fisheries, play a significant role in the livelihoods of an estimated 35 million people in the regional countries of whom 14.3 million people live in low-elevation coastal areas, and 3.3 million are directly employed in marine fishing. The project focuses on sharing knowledge and data to make better decisions and strengthen the country's ability to govern and protect the fisheries sector. It aims to support other island nations in the South-West Indian Ocean region and make the Maldives a regional leader by providing knowledge and assistance. Promoting sustainable and inclusive practices to expand and diversify the fisheries industry, removing barriers to business competition, and training at least 40,000 people from the coastal communities with a special focus on encouraging more women to participate in fisheries management are also proposed interventions.
The USD15 million MCGP project aims to assist in encouraging greater private sector participation in the economy and in enhancing the management and operation of specific SOEs. The MCGP aims to make the 40,000 registered SMEs in the Maldives more competitive by improving digital financial systems to make it easier for them to access loans. It will also provide support to selected innovative SMEs to help them grow and develop new environmentally friendly products that can compete in emerging markets, encouraging other existing small businesses and potential entrepreneurs to develop and contribute to a vibrant SME ecosystem.