The Maldives' economy has been growing at roughly 4% in past years. What are the challenges and the opportunities that lie ahead?

President Abdulla Yameen has embarked on an ambitious economic agenda to transform the economy, with a focus on infrastructure. As a result we are spending close to $800 million on modernising our international airport and we are grateful to a number of GCC member countries that have contributed to financing this project – including the Abu Dhabi, Kuwait and Saudi funds and the Opec fund. Without them, we would not have been able to develop our airport to this level. Once the airport is complete, we will be able to cater to around seven million tourists. At the moment we cater for 1.3 million, so this will provide a big boost to Tourism. It's a chicken and egg situation: potential for industry growth will remain limited unless we further develop the airport; and if we have a good airport, it fosters a climate where the resorts, and the industry, can continue to grow. So we are focusing on both the airport and resort development. In the south, with a private investor, we have developed Gan airport into an international airport. Some of our guests like to come by private jet and land at Gan airport and go on to their resorts from there. But we need to develop more resorts in the south for the airport to truly reach its potential – and more resorts also mean the activity is enhancing the industry, and creating jobs and other related opportunities for the communities and the nation. At the same time we are also developing the bridge between Hulhumalé and Malé and connecting the population centres of the capital city; this has been financed by the Chinese government with the work being carried out by a Chinese company. This will increase the mobility of people and goods and boost the economy in the Greater Malé region. President Yameen's target is to pull around 75% of the population within the Greater Malé region, by providing world class facilities and services, so we are developing infrastructure first followed by incentives to move there. We have an ambitious housing development plan – more than 15,000 housing units, including social housing, luxury housing and also infrastructure. The second phase of Hulhumalé includes the "Youth City" where young people will have access to better accommodation and recreation, and sports, facilities.


What has been built there already is incredibly impressive…

The Saudi fund has financed infrastructure projects, but we are also attracting foreign investors to invest in housing. They can come with a proposed development and get structured financing options all the way to the end user. When I was at the Ministry of Finance I had this desire – and it's also a pledge of this government – of having an international finance centre as part of the second phase of Hulhumalé. This will happen. It will be called the Maldives International Finance Center and two companies – Hazana Maldives and the Maldives Center for Islamic Finance (MCIF) – have already been invested with the responsibility of developing it. Part of it will be an Islamic finance centre.


How do you think the key agreements recently signed between the Maldives government and the UAE will help enhance and propel the different investment opportunities in the Maldives for GCC investors?

The agreements will boost trade between the two countries, as well as investment. Agreements like the double tax avoidance agreement, so if you get taxed in the Maldives you won't get taxed in the UAE, reinforces the message that the Maldives is a very open economy – I feel that if we want to attract investors from other countries, we need to have such agreements in place.

What are the main intersections of interest between the Maldives and the Gulf region, particularly the UAE and Saudi Arabia? How is the Maldives a natural ally for the GCC?

I would look at the incentives we have here for foreigners. We have legislation for Special Economic Zones, for significant investments, where we provide incentives for business profit tax (BPT) and also offer the possibility of owning land. If you invest in a Special Economic Zone, there is a reduction in the amount of tax you pay on goods and services or in terms of BPT. Also, if you invest over $1 billion, you have the possibility of land ownership. Normally, foreigners do not get ownership – they can get a 50-year or a 99-year lease – but if they invest over $1 billion, they have the possibility, on meeting certain conditions, of land ownership. There are already certain areas designated for Special Economic Zones. One is iHavan – we have already done a feasibility study which shows great potential and viability as a project. The key message would be to come and invest in the Maldives, in the Special Economic Zones, with all the benefits it entails.


Why should people invest in the Maldives and not in other areas nearby? What makes the Maldives special?

Our geographical location. We are equidistant from Singapore and Dubai, which are major finance centres. We also have a very young, vibrant population. Maldivians are very highly educated and the government is investing a lot on education. Every year the state provides around 1,500 loans for Maldivians to study abroad or anywhere in the Maldives. If we can have this International Finance Centre, it can employ highly skilled Maldivians – business graduates, lawyers, economists… High net worth individuals can set up their businesses here which will translate to revenue growth which then boosts the economy. These investors can maybe spend a period of time annually here or even make Maldives their 'home' and they can have their company set up, with qualified Maldivians working for them, while enjoying year round good weather – the Maldives' all year sun, always not too far away from the sea and sand, provide for exceptional conditions. That's the kind of model we're thinking of. You don't see this environment in other countries, so our natural beauty gives us a competitive edge. We also don't have the typical four seasons – we have the Four Seasons resort but we don't have your typical four seasons! We can do business throughout the year as we don't have really cold weather or really warm weather.

The Minister of Economic Development has recently announced that the Maldives Investment Forum will take place in Dubai on December 18 of this year. What sectors of the economy would you like to promote to the GCC investors participating in the forum?

Dubai is the largest importer for the resorts here because it is so close and also because of the price competitiveness and the quality of the goods. Travellers and consumers around the world are increasingly discerning and brand aware and brands which are present in Dubai are recognised for quality and stature. With the investment forum, investors from the GCC will be able to promote their businesses there. We have a high demand for construction all over the Maldives, so we need materials from Dubai and other GCC countries. We can also look at duty free zones like there are in Dubai. Near Hulhumalé a Thai company is creating several islands and duty free zones are one key component of this development. We have many other islands where we can develop shopping complexes and duty free zones. We can also create artificial land very easily. The Maldives Transport and Contracting Company has recently acquired a dredger and will soon start reclaiming lagoons in a big way. Then maybe we can reclaim land for development.


The Maldives government has recently said that tourism is the golden egg of the country's economy and has a multiplier effect that affects other sectors, both directly and indirectly. How do you see that?

We need to develop more flights to and from the GCC countries. At present we have Dubai, Saudi Arabia, Abu Dhabi and Qatar. But we could also start air connections to other GCC countries, maybe Kuwait or Bahrain. That's one industry that can spill over. And there's also Islamic finance. Middle Eastern countries have very good Islamic finance products and they can create the same products here in the Maldives. GCC countries can also help train Maldivians. People in the GCC also like Islamic resorts, so we can develop Sharia-compliant resorts for people who don't want to go to conventional resorts adding a different aspect to the tourism product we currently have.

What about the setting up of manufacturing and food processing facilities to diminish the reliance on imports? Is that a potential opportunity for GCC investors?

Yes, but we have to look at price competitiveness. There is room for light industries in the Maldives and there is already space in Hulhumalé designated for that. GCC companies can look at coming in by doing feasibility studies. If we can source the raw materials at a cheaper rate, we can be price competitive. We welcome investors from the GCC to come and put up light industries in the Maldives – in processing or packaging or similar.


What would be you sales pitch to GCC investors and visitors? Why should they work here, invest here, live here, bring their families here and spend their holidays here?

In terms of culture we are very close. We are also an open economy and travellers from GCC countries get a visa on arrival. They get 30 days automatically. We provide Islamic tourism if they don't like conventional tourism. It's also not very far – just a four-hour flight away – and our temperature is almost constantly lovely. If you look at the doing business indicators, we are quite high up because we don't have a lot of red tape. We are still trying to streamline our procedures and hopefully we can shorten the period for registering companies so that GCC companies can come here and enjoy all that we have to offer. We are open to all GCC member countries, their people and their governments to invest here.