Covid-19 pandemic is one scenario that nobody has prepared for. Unsurprisingly even the strongest of economies are bleeding to this unforeseen disease and small economies like that of Maldives is hurting even more, and there is very little that can be done to avoid a complete economic crisis.
Despite being one of the most preferred travel destinations in the world, the Maldives economy is surprisingly very weak. One might think where is all the money that flows into the Maldives, and that is a topic for another day. I am looking into how the Maldives economy, in general, will be like post-COVID-19.
In April 2020 IMF forecasts Maldives GDP growth would experience a negative growth in 2020 by as far as 8%
Unemployment at mind boggling rate.
With the sudden decline of the largest economic sector, tourism, and many other businesses, directly and indirectly, working with the tourism sector over 20% of the nation’s workforce is employed which is a steep figure from 5-6% of previous years.
However, the estimated current unemployment rate of over 20% is likely to go down post-COVID-19. With the reopening of tourism properties and supporting businesses, many are likely to return to work.
But the question is, how long will it take for resorts to reopen and start hosting tourists again? While some resorts have already started preparations for reopening by September of this year the world economy especially the main tourism market of the Maldives (Europe) is the deciding player in the fate of thousands of jobs in the sector.
By now it is certain that almost all tourism players will cut labor costs by laying off all non-essencial staffs in the near future as tourist arrival estimates do not look any better for the remainder of 2020. We have seen mass layoffs from resorts as little as within 3 weeks of reporting the first domestic case of Covid-19 in the country. Therefore it is all but a time factor that remains between currently paid employees in the sector and their jobs.
It is difficult to comprehend the effect of this mass unemployment which is most certainly upon us. However, it is not the end of the world (I hope not), and if we look harder we’ll always find ways to get back on our feet. Here are some of the industries that are estimated to grow during and post Covid-19.
- Logistics & Courier
Food is one industry that will have some role in any scenario making it the perfect businesses to get in to. Though I do not recommend anyone to invest in this sector at this moment to start from scratch as there is more to operating an f&b business than it seems. However, employment in the industry will assure a secure dependable income source.
Almost every 2nd business license given by the Ministry of Economic Development in the past 3 months has been for a food-related business.
Businesses in importing or retailing meat and frozen food products surprisingly did not experience mass losses as much as other businesses when their primary market of resorts collapsed almost instantly. The increase in demand from retail customers turned out to be extremely profitable for many such businesses.