Given the concentration of the economic activity in few areas, the report highlights that to be able to sustain growth, the country needs to diversify the economy, specially in light of its expected graduation from least developed country (LDC) status in 2011, and to create a viable tax structure. Diversifying the economy would require significant private sector involvement, for which a conducive business environment also needs to be created, the report notes.
The Secretariat report also states that the Maldives' tariff remains unduly complex and its level and structure is a major potential distortion to the allocation of resources and domestic efficiency, and an impediment to the competitiveness of the economy.
The report, along with a policy statement by the Government of Maldives, will be the basis for the second Trade Policy Review (TPR) of the Maldives by the Trade Policy Review Body of the WTO on 26 and 28 of October 2009.#
TRADE POLICY REVIEW: MALDIVES
Economic diversification is needed to sustain growth
Special Correspondent - 2009-10-27 05:36
The Maldives is a physically and economically small, vulnerable developing country, heavily dependant for its prosperity on international trade. Real GDP growth averaged 7,4% between 2003 and 2008, driven mainly by the tourism sector. However growth is expected to contract by 1,3% in 2009 due to a decline in tourism activity, according to a WTO Secretariat report on the trade policies and practices of the Maldives.