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PRESS RELEASE

World Bank Delegation and Maldives President Discuss the Need to Urgently Focus on the Economy

May 29, 2014

MALE, May 28, 2014 — A World Bank Group delegation, led by World Bank Vice President for the South Asia Region Philippe Le Houérou, met Maldives President Abdulla Yameen and agreed that government policy should focus urgently on getting the economy back on track, by fostering growth and consolidating public finance. Their discussion also centered on the need to reduce fiscal deficits, create a favorable investment climate for the private sector and delivery of key public services. It was agreed that the Government and the World Bank Group will work together in developing a national strategy.

The delegation also met with senior officials from the Ministry of Finance and other line ministries, subnational authorities and a broad range of key stakeholders to discuss the country’s development challenges and the opportunities for future partnership with the World Bank Group. The delegation visited Thinadhoo and Maafushi to understand firsthand the challenges of service delivery and economic development in islands distant from Malé. Merza Hasan, Executive Director at the World Bank Board, representing the Maldives also joined the meetings.

This was Le Houérou’s first trip to the Maldives since taking over the position in July 2013. It was an opportunity to understand the challenges faced by the Maldives, to take stock of the partnership between the World Bank Group and the country, and to understand how the World Bank Group can best support the Maldives through the upcoming Country Strategy. 

Maldives has enjoyed economic growth during the last decade and expects to achieve 4.5 percent growth in 2014,” said Le Houérou. “But it still faces challenges, such as balancing public accounts while delivering public services on some 200 islands across hundreds of kilometers of the Indian Ocean.  The issue is how Maldives can make the most of its potential in order to achieve inclusive and sustainable development.

The delegation also comprised Françoise Clottes, World Bank Country Director for Sri Lanka and Maldives, Adam Sack, International Finance Corporation Country Manager for Sri Lanka and Maldives, and Nabil Fawaz, representative from Multilateral Investment Guarantee Agency.

The country has had great success in developing a world-class tourism sector to take advantage of its breathtaking beauty. This sector is expected to continue to grow and remains the main driver of inclusive growth and sharing prosperity, going into the future. ” said Clottes.

The visit was very timely as   the new administration is evaluating options to ensure macro and fiscal stability, provide basic public services, foster economic growth, and address environmental needs.  Building on several decades of partnership, the World Bank Group stands ready to work with the Government and people of Maldives to tackle these concerns.  Whether through financing and technical assistance to Government, private sector investment via the International Finance Corporation, or risk mitigation via the Multilateral Investment Guarantee Agency, the World Bank Group will continue to work with Maldives with the objective to reduce poverty and foster prosperity for all.

The World Bank Group provides most of its financial support for Maldives through the International Development Association (IDA) and IFC, its private sector arm. As of May 2014, the IDA portfolio comprises three projects with a net commitment value of $39 million, supporting education (26 percent of the portfolio), environmental management (34 percent), as well as social protection and pension administration (40 percent).  Two additional projects, focusing respectively on enhancing public finance management and facilitating private sector investment in solar electricity generation are due to be presented to the Board of the World Bank Group at the end of next month.  IFC's committed and outstanding investment portfolio stands at $31 million and $29 million respectively as of May 2014, supporting tourism, housing finance and leasing. IFC has an advisory project that assists with the development of a new Act to regulate non-bank financial institutions.

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PRESS RELEASE NO:
SAR/2014