New prospects in island nation
Over 1,000 tropical islands in the Indian Ocean make up the Republic of the Maldives. These islands are the main source of income for the country. Maldives has successfully marketed its natural assets through promoting cultural tourism, which contributes nearly 29 percent to the total GDP, along with a considerable share obtained from fisheries. Interestingly, the major development in these islands is brought about by Foreign Direct Investments.
Maldives follows a non-aligned policy and maintains friendly relations with all the major global economies. As a result, FDI from India, Sri Lanka, America and Europe has contributed tremendously to the construction, communication and transportation sectors of the economy. Pakistan has no presence in these islands. However, as part of growing bilateral ties between Pakistan and Maldives, the island nation is offering Pakistan a number of its tropical islands for investment. The potential opportunities available to Pakistan include: Tourism industry - development of exotic holiday resort islands Property development in capital Male and nearby islands Air and sea transportation Marine-based industries such as fish processing, aquaculture and marine culture Infrastructure development Buy out shares in existing businesses Investment participation in new companies Services sector offering resort management; sea and air transportation; accounting and management and manufacturing.
Out of the 1,190 islands only 200 are inhabited while the rest have been opened to foreign investors. Pakistan has been offered to invest in and construct resorts, guesthouses and 2-3 star hotels. The average occupancy rate of these resorts is guaranteed to be nearly 70 percent as Maldives is growing to be a tourist hub in the South Asian region. In the previous year alone, as many as 700,000 tourists from different countries visited the Maldives, giving a boost to the economy that relies heavily on tourism.
Basically Maldives lacks indigenous resources. The level of tourism offers great potential of Pakistani exports to Maldives in many areas, as the present value is at around $6 million. The poor soil and scarce arable land have limited agriculture to a few subsistence crops such as coconut, banana, breadfruit, papayas, mangoes, taro, betel, chillies, sweet potatoes and onions. Almost all food, including staple items, has to be imported to feed the growing number of tourists. Therefore, Pakistan has the opportunity to easily capture a faithful market for its agricultural crops, especially rice.
Construction materials from Pakistan like silt, cement and marble are also imported by Maldives and considered to be of high quality. Recently, Pakistan installed a cement plant in Maldives and has offered to export construction items to the country without quota.
Negotiations over a direct consignment line from Karachi to Maldives indicates an effective strategy towards boosting trade links. The productive dialogue between the two countries reveals that Pakistan does not want to limit bilateral relations to tourism, fisheries and construction only, but plans to extend technical assistance as well.
The role of Trade Development Authority of Pakistan and Chambers of Commerce is crucial in achieving successful trade, as the Maldivian government is also willing to organize an exhibition, especially for showcasing Pakistani products. In addition, Maldives will be hosting the 17th South Asian Association for Regional Cooperation ( SAARC) this year. This will be beneficial for regional economic coherence. All these strategies will overcome the earlier trade deficit due to the geographical distance Pakistan and Maldives and will enable Pakistan to compete with the long held dominance of Sri Lanka and India over the markets of the island nation