Maldives has registered impressive improvements in human development as reflected by on-track reduction in infant mortality, maternal mortality, and education attainment. However, sustaining the progress will be a key challenge particularly due to the increasingly tight fiscal space. The population is still vulnerable to shocks such as from natural disaster, climate change, health risks, and joblessness due a reduction of fishing stock.
In particular, there were two major deficiencies with the previous pension provisions which were not only limited to government employees, but also not designed to provide a secure and adequate stream of pension income after a certain age. In the absence of any safety net for the elderly and the vast majority of workers not participating in a pension scheme of any kind, the old age group were likely poor and vulnerable. In addition to low coverage, the social protection programs were also fragmented and not optimally implemented due to capacity constraints.