Maldives comprises a chain of more than a thousand coral islands in the Indian Ocean at the southernmost tip of South Asia. More than a third of the population lives in the capital, Malé, with the remaining population distributed between seven administrative provinces on outlying atolls (Maldives Department of National Planning 2010). Due to the country’s unique environment, there is extensive internal migration between provinces and the capital for the purpose of education or employment, and in-migration of international workers to support the burgeoning tourism and construction sectors (UNDP 2010).
Maldives has experienced three significant periods of migration during the past 50 years. The first period, prior to the 1970s, entailed the small-scale movement of workers seeking employment in traditional production and services industries. In the second period, between the 1970s and 1990s, the Government of Maldives opened its economy to the private sector, introduced commercial banks, established and promoted the tourism industry and welcomed foreign labour to the country. The third period began in the 1990s and is characterized by a substantial influx of foreign labour migrants (Rasheed 2003).
Tourism is the heart of the Maldivian economy, attracting 500,000 visitors annually, and accounting for 28 per cent of gross domestic product (GDP) and
more than 60 per cent of foreign exchange receipts. Since the population of the Maldives is only 315,000, comparatively small changes to migratory patterns have significant implications on the economy. Recently, for example, the global economic crisis of 2008 adversely affected the country’s tourism industry, which consequently had a strong impact on the Maldives economy (United States of America Central Intelligence Agency 2011). Fishing remains the second largest generator of foreign exchange and employs about 30 per cent of the country’s workforce (World Bank 2010).
In December 2004, it was officially announced that the Maldives would no longer be classified as a least developed country (LDC). After a transition period, which was postponed due to the major tsunami that hit the Maldives only a few days after the announcement, the country fully graduated from LDC status in 2011 (UN-OHRLLS 2010). In 2004, only 3 per cent of the population lived below the national poverty line. However, there are large disparities between atolls and inequality, as significant as it is, is greater in the Maldives than in neighbouring South Asian countries. The poverty levels are highest on the islands where livelihoods are dependent on subsistence agriculture and fishing (Maldives Department of National Planning 2011). The relatively high level of inequality reflects economic disparities between the capital Malé and outlying provinces. This, in turn, has fostered internal migration as workers migrate in search of better employment opportunities.
The country’s geographic position as a chain of islands spread over a distance of 900 kilometres with the majority of islands lying below sea-level makes it extremely vulnerable to natural disasters and the effects of climate change (ADB and World Bank 2005). The major tsunami that hit countries in South and South-East Asia in December 2004 took a large toll on Maldives, leaving more than one hundred dead, displacing 12,000 persons and causing $300 million of property damage. The GDP contracted 4.6 per cent the following year, but recovered slightly in 2006 on the back of increasing tourism and corresponding demand in the construction sector (UNDP 2010).
In comparison to neighbouring countries, remittances to Maldives are extremely low, the majority of which originates from seafarers working on foreign cargo vessels. In 2010, remittance inflows to the country totalled $3 million, about 0.2 per cent of GDP, the lowest rate in South Asia (UNDP 2010). However, remittances from migrant workers in the country are nearly thirty times higher. Figures for 2009 indicate that foreign workers in the country remitted $116 million abroad (World Bank 2011a).
The Government of the Maldives has in place a legal framework to regulate the entry of foreign labour migrants. The Employment Act (2008) and the Expatriate Employment Regulations (2008), overseen by the Ministry of Employment and Social Security, require employers to place a security deposit to be used to facilitate the repatriation of employees, if necessary (UNDP 2010).