MALE’, February 6, 2024 – World Bank Vice President for South Asia, Martin Raiser, today concluded his four-day visit to the Maldives. During this visit, he reaffirmed the World Bank’s support for the country’s development agenda that builds on more than four decades of strong partnership. He also highlighted the urgent need for fiscal reforms in the face of significant risks stemming from rising spending, limited foreign exchange reserves, high debt, and elevated global interest rates.
In Male’, Raiser met with his Excellency President Dr. Mohamed Muizzu, Honorable Minister of Finance Dr. Mohamed Shafeeq, Honorable Minister of Climate Change, Environment and Energy Mr. Thoriq Ibrahim, and Honorable Minister of Economic Development and Trade Mr. Mohamed Saeed, other cabinet ministers and development partners.
“Maldives has achieved impressive development results, including in improving access to health, education, housing and other public services,” Raiser said. "However, large fiscal and external deficits put these gains at risk and require urgent measures to contain untargeted spending, raise more revenues and manage debt more prudently. This is essential to create the space for sustained investments in people, nature and infrastructure that the Maldives needs to grow and thrive.”
The first-ever Human Capital Review for the Maldives, launched by the government and the World Bank on February 6, indicates that while the country’s human capital is higher than its regional, small-island nation and income comparators, regional and gender inequities persist. Given the need to control public expenses, such inequities can no longer be addressed simply by spending more overall. Instead, greater prioritization of spending, targeting of subsidies according to need, and efforts to improve the quality of services particularly in the less advanced islands, will be required to ensure further progress. Raiser offered the Bank’s technical and financial support for such efforts.
Raiser’s visit also focused on addressing climate impacts that present an existential threat to the country’s nature and infrastructure. He stressed the intertwined nature of the economic and climate crises and the importance of working together with the government, development partners and the private sector to identify opportunities for investments that generate triple dividends in economic, social and environmental terms.
The World Bank and Maldives share a strong partnership of over 45 years. The current World Bank program in Maldives includes 10 projects financed by the International Development Association (IDA), one regional project and one IDA guarantee operation for a total net commitment of $217 million. The projects are focused on renewable energy, competitiveness and growth, youth resilience and employability, digital development, urban development, solid waste management, COVID-19 response, fisheries, labor, health, education, and social protection. The World Bank also provides analytical support in macrofiscal monitoring, policies and analysis, financial sector, social protection, and poverty.