Mohamed Saeed: The Maldives Ushers in a New Era for Investors

Hussain Afeef: A Pioneer’s Path

Mohamed Ali Janah: On the Trail of a Trailblazer

Developments in the Maldives: A Banker’s Perspective

3

“The Maldives is on a course of economic transformation that will re-shape the business landscape in terms of physical infrastructure and the legal framework. Investor confidence in the Maldives has never been higher”

HE. President Abdulla Yameen Abdul Gayoom

INVEST MALDIVES OFFICIAL MAGAZINE

We are the lead government agency for promoting and facilitating inward investments into the Maldives to enhance the country’s economic landscape.

© 2017 Invest Maldives,Ministry of Economic Development,Boduthakurufaanu Magu,Male’ 20-07, Republic of Maldivesinfo@investmaldives.org

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STATEMENT BY MINISTER OF ECONOMIC DEVELOPMENT

Invest Maldives has secured its position in the market as a vital source of information as well as a platform to showcase major investments into the

country.

The contents of this Issue stands testament to the strong performance of the Maldivian economy which has benefited greatly from the pro-business policies, legislative initiatives and infrastructure development projects undertaken by the Government.

The transformational economic vision of His Excellency President Abdulla Yameen has already begun to bear fruit as evidenced by the increased investor interest in the Maldives. It is not just the public treasury and the public at large that benefits from these positive developments, but also the private sector which enjoys greater potential to partner with foreign businesses in order to gain the necessary edge to succeed in the market.

Invest Maldives will continue to record these developments on an annual basis and present them to our readers.

Hon. Mohamed Saeed

MALDIVES IN BRIEFAreaTotal Area 90,000 sqkm

EEZ 895,000 sqkm

Islands1192 island

198 inhabited islands

127 operational resorts

28,775 resort beds

Gross International

Reserves

USD 467.1 Million as at end 2016

Exhange Rate

1 USD = 12.85 MVR +/- 20%

Growth GDP Growth: 3.9% (2016)

Income per capita: USD 7,338 (2015)

Total tourist arrival: 1.28 million

Source: Maldives Monetary Authority

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INSIDECONTRIBUTORS

Statement by Minister of Economic Development 7

Invest Maldives: One-stop shop for investors in the Maldives 10

The Maldives ushers in a new era for investors 12

Crossroads: Redefining the Maldives experience beyond conventional tourism 14

Hussain Afeef: A Pioneer’s Path 18

Velana International Airport: Building the Gateway of the Future 24

Mohamed Ali Janah: On the Trail of a Trailblazer 30

Rating Paradise 36

Developments in the Maldives: A Banker’s Perspective 40

Dream Rising 46

Investment Highlights 54

PUBLISHERMinistry of Economic Development

CONTRIBUTORS Mohamed Saeed

Fitch Ratings Inc.

Mohamed Ali Janah

Hussain Afeef

Martin Vossen

Lars Petre

Ibrahim Vishan

Ahmed Saleem

Adam Saleem

Andrew Healy

Thiti Thongbenjamas

Mohamed Saiman

Adil Moosa

PICTURES & ILLUSTRATIONS

President’s Office

Yey Studio LLP

Hotels and Resort Construction

Bank of Maldives Plc

Housing Development Corporation

Tree Top Investment

Dhiraagu

Singha Estate

Maldives Airports Company Limited

OTO Pvt. Ltd.

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Maldives has continued to develop at a steady pace with

an average growth rate of 7% during the last twenty years. The economy has remained resilient amidst the shocks the world has seen during the period. Pro-market policies embedded within the government’s economic vision contribute to a strong, liberal and transparent trading and commercial environment. In its drive to build a strong and stable economy the Government has implemented several policies that opens up attractive opportunities for foreign investors.

Invest Maldives is geared to achieve the Government’s vision of broadening the economic base through diversification of the country’s economy and enhancing its economic landscape. It is the lead government agency for promoting and facilitating foreign investments into the Maldives and is responsible for investment promotion, facilitation and registration.

Invest Maldives offers a one-stop shop that takes investors through the A-Z of investing in the Maldives. It is a process that has been streamlined through changes in laws and regulations, and well-defined procedures, designed to offer clarity, security, convenience and speed for investors looking at investing in the Maldives.

Invest Maldives provides the information investors need to explore and set up their investments. It has the resources to offer comprehensive information on the country’s economic climate, investment opportunities in various economic sectors and information on special projects open for investment.

Through its strong working

Well-defined procedures, designed to offer clarity, security, convenience and speed for investors looking at investing in the Maldives.

a bureaucracy-free process that is designed to offer convenience to investors.

relationship with key government stakeholders, Invest Maldives is equipped to set up meetings and provide comprehensive information on investment opportunities across various sectors of the economy and facilitate in depth discussions with stakeholders for detailed study of potential opportunities and projects. The agency also facilitates site visits with stakeholders if and when such visits may be required.

In addition to the personalized services provided to potential investors who contact the agency, Invest Maldives also conducts

several information sessions in countries around the world to provide information to international investors.

If investors are looking for partnerships with the local private sector or work with the government in a pubic private partnership or in joint ventures, Invest Maldives offers assistance through its business matching services linking investors with like-minded local businesses or government agencies responsible for PPP projects.

Access to Invest Maldives is open to all potential investors. Investors may walk-in for guidance and direction at any stage of their investment process from conception to operations. Invest Maldives offers personalized service and takes investors through a bureaucracy-free process that is designed to offer convenience to investors.

The business registration process is refined and simplified to offer convenience and comfort to investors to enable businesses to complete the whole process in just a matter of five days.

Incentives for Foreign Investments• The right to incorporate

businesses with 100% foreign ownership

• Long leases of land for up to 99 years

• Freedom to use foreign managerial, technical and unskilled workers

• No foreign exchange restrictions• No restrictions on repatriation of

profits and capital proceeds• Long term contractual

agreements and long term lease for mega scale projects

• Provision of a legally backed investment guarantees

• Availability of land reclamation option for development, with a 70% land ownership offering for

projects of over US$ 1 billion• Allows for the availability of

international arbitration in dispute settlement

Special Economic Zones

Special Economic Zones established by law, offers a tremendous opportunity for investors looking at investing in mega projects in the Maldives. The SEZ Law facilitates a flexible regulatory environment for mega investments of strategic significance to the country, and investors planning to invest a minimum of US$ 150 million can reap significant benefits from the special economic incentives it offers. The SEZ framework also provides strong protection for developers as well as investors in special economic zones.

Strategic Priority Areas:

• Infrastructure development; airports, ports, ICT infrastructure

• Economic diversification; manufacturing, logistics, research and development, financial services

• Social development; education, health, housing

While there is a set of incentives and benefits that are guaranteed to the SEZ investor by law, there are additional benefits that can be gained based on merits of the project the investor is able to present for consideration, during the project negotiation process.

For the first TEN years of operation such investments are offered;

SEZ Law facilitates a flexible regulatory environment for mega investments of strategic significance to the country.

• Exemption of Import duties for materials imported for development, management and operation of the zone

• Exemption of Business Profit Tax (BPT)

• Exemption from Goods and Sales Tax (GST)

• Additional tax relief and tax credits under specific regulations

Additional incentives that can be negotiated during the approval process include;• Exemption of BPT and GST

beyond the first ten years• Exemption from taxes in the sale

and purchase of land

SEZ also offers provisions for residency arrangements and for ownership of land for foreign investors.

Invest Maldives 4th Floor, Velaanage Building www.investmaldives.gov.mv info@investmaldives.org

INVEST MALDIVESOne-stop shop for investors in the Maldives

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THE MALDIVES USHERS IN A NEW ERA FOR INVESTORS

The Maldives is witnessing an exciting economic

transformation under the leadership of President Abdulla Yameen, whose government has opened up the island nation for business on a hitherto unseen scale. Under President Yameen, the Maldives saw the introduction of key legislation and policies that set it on a transformative economic path. The President’s economic agenda is aimed to elevate the Maldives to the next level of development through enhancing its investment horizon, increasing trade activity and initiating largescale infrastructure projects.

in strategic investments and new growth sectors in the Maldives. Such investments targeted in these areas are offered a stream of attractive economic incentives and a very favourable business climate.”

Open for business: pro-business reforms

The Maldives is experiencing a period of sustained increase in foreign investment. The government’s stance on FDI is extremely liberal, allowing 100 per cent foreign ownership and imposing no restrictions on repatriations of profits and capital.

“The government is continuously working on strengthening the investment climate of the country,” says Mohamed Saeed. “We are

“We welcome investors in all sectors of the economy and this, coupled with the progressive changes to our investment climate, means the timing has never been better to invest in the Maldives,”

Mohamed Saeed, Minister of Economic Development

Special Economic ZonesOne crucial legislative development was the ratification of the Special Economic Zones (SEZs) Act in 2014. The introduction of SEZs to the Maldives is aimed to stimulate economic growth and transform the economy through diversification. Subject to tax concessions, softer regulations and strengthened investment security, the SEZs will be well-poised to attract foreign investment.

“This is another initiative of the government that calls for participation of the private sector in the development process,” says Mohamed Saeed. “Through the SEZ law, we want to solicit the interest of the global investment community

working with some of the best international law firms to introduce a mercantile court in the country. Work is also underway to introduce a trademark law, revise the foreign investment act and the companies act in line with international best practices. We offer a transparent and robust tax system which has been positively received by international bodies.” Moreover, to reduce red tape, the government has established a trade facilitation committee tasked with identifying and eliminating barriers to conducting business in the country.

Today, the Maldives enjoys Asia’s highest return on investment, between seven and fourteen per cent. “Though a small market, the country receives more than a million international visitors annually,” Mohamed Saeed points out. “Also, through the pro-business reforms of the President and the efforts of the private sector we’ve achieved an ideal business environment that is immensely favourable to foreign investors. For this, we owe a great debt to the President, whose visionary outlook continues to be instrumental in shaping our country. The private sector too deserves our thanks for their contributions to the economic agenda.”

Free trade agreements and bilateral investment treatiesA free trade agreement between China and the Maldives was signed in December this year, providing Maldivian businesses free access to the world’s largest market. It’s the first bilateral free trade agreement that the Maldives has signed with any country and it will allow those engaged in fisheries and tourism sectors to exploit new opportunities in the world’s largest consumer market.

Furthermore, in October this year, a bilateral investment treaty was signed between the Maldives and the UAE, again a first for the country. The treaty entails reciprocal treatment

to investors of both countries and enhances investor security through legally bound assurance. The government encourages other nations to follow suit and partner with the Maldives.

More than just a tourist hotspot: mega projects in the Maldives

The need to diversify from a tourism based economy is keenly felt by the present government. Thus, a raft of development projects to upgrade and enhance the Maldives’ infrastructure was unveiled. They are not only required to meet the demands of current economic activity but also to keep pace with planned development in various economic sectors.

The development of Velana International Airport, the country’s main gateway, is one such endeavour that is already underway. The USD 800 million project will see the expansion of passenger, cargo and seaplane terminals and the new airport will be able to handle seven million passengers annually. “The Government gives critical importance to this project as the existing bottlenecks at Velana International Airport need immediate solutions for the continued development of our tourism industry, our biggest contributor to GDP,” says Mohamed Saeed.

Plans are also underway to relocate the main commercial port in Male to the neighbouring industrial island of Thilafushi. “This project will allow the new port to accommodate growing trade volumes,” explains Mohamed Saeed. “It will be delivered as a modern port with state of the art technology together with warehousing facilities and a free zone. The new port will have the ability to cater to an annual capacity of 480,000 TEU’s upon completion.” To this end, the government is open to discuss the project with international partners. “Given our strategic position, we’re confident that the logistics and

transhipment industry offers great potential,” adds Mohamed Saeed.

The ongoing Male-Hulhule ‘China-Maldives Friendship Bridge’ project is probably one whose progress is most visible. Connection of Male and Hulhumale, the two largest cities in the country, is expected to open up avenues for business in addition to being a convenience for those who now travel between the islands by boat. The project, in which the government partnered with China, will be delivered ahead of schedule in 2018.

The development of Hulhumale’s second phase is one of the government’s main focusses. “It is being developed as an integrated project with a technology park and an international financial centre co-integrated with housing, entertainment, tourism and commercial developments,” explains Mohamed Saeed. “The project will directly contribute to easing of population congestion in Male by motivating young people to relocate to Hulhumale, while providing access to a range of economic activities and jobs.” 240 hectares of land has already been reclaimed for phase two of Hulhumale and the project is set to see substantial progress over the next two years.

The Maldives can be much more than a beautiful tourist destination and the government welcomes all parties to help the country realise this dream. It is a safe place to invest and offers remarkably high returns. Healthcare, education, logistics, finance, real estate are just some of the industries that are coming to bloom in the country. “We welcome investors in all sectors of the economy and this, coupled with the progressive changes to our investment climate, means the timing has never been better to invest in the Maldives,” concludes Mohamed Saeed.

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Set amidst the breathtaking sea-scape of the Kaafu Atoll within the pristine waters of Emboodhoo Lagoon, Crossroads project is ideally located within 15 minutes by speed boat from the airport and 8 minutes from Male’ City.

The overall development will ultimately encompass a total of nine islands and it is the first ever integrated recreation destination in the Maldives and will offer 1,300 rooms with overall project investment of approximately US$ 680 million.

of the mega development represents architectural themes from around the world with old-world French designs, traditional Spanish themes and architectural concepts from the Portuguese, Chinese and the British among others.

Talking to Invest Maldives Mr. Thiti Thongbenjamas, the Chief Investment Officer of Singha Estate said, “From my experience working in large scale hotel development projects around the world, I can say that Maldives is one of the most preferred investment destinations in many ways; the country although

small in size has very high potential in “beyond conventional” tourism because of many key strategic drivers – the beauty that lies underwater, the Government’s support for foreign investment and most significantly the growing demand of family travelers for integrated lifestyle travel experiences. Secondly, I believe strongly that there is an important similarity between the people of Thailand and Maldives and that is, that we are both hospitable people and hospitality is one of the main economic sectors in both the countries”.

CROSSROADSRedefining the Maldives experience beyond conventional tourism

Crossroads is a name inspired from the various cultural influences

that have shaped the Maldives from time immemorial. The country is located at the crossroads of ancient maritime trade routes and has been a place that sailors from different corners of the globe stopped over for trade, rest and replenishment.

Crossroads, the multi-faceted tourism development, is about today’s travelers, visiting the Maldives for fun and rejuvenation, cuisine from various cultures, entertainment and the company of people from around the world. The architecture and design Cont. >

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There is also growing numbers in MICE business for an island destination such as the Maldives”. Mr. Thongbenjamas stated, explaining how the development will reshape the Maldives source markets beyond conventional tourism and contribute greater benefits to the national transformation roadmap of the Government, especially to the new airport development that targets seven million tourist arrivals in the near future.

The developer Singha estate will invest a total of US$ 311 million in Phase One of the project, the construction of which is set to begin in December 2017 and will include the development of three island resorts,

and a core island Township that will house world-class and leading Thai F&B outlets, 61 in all, a retail promenade that will present world’s leading brands and boutiques for local artisans, entertainment, recreation and new leisure and lifestyle experiences to the Maldives for the very first time.

Work on the project began in January 2017 and land reclamation was completed in August 2017. The Township and Phase One that would have two hotels of 200 keys each - 400 rooms in total will be completed by the fourth quarter of 2018. And an upscale lifestyle resort of 120 keys will be completed in 2020.

The second phase comprises of six islands representing a wide variety of individually curated lifestyle-concept resorts, designed to cater to wide ranging desires and aspirations of international leisure destination seekers. This is set to be completed within the next five years.

The project has partnered with world-class developers for its various facilities. These include Café Del Mar, the world’s popular beach club operator whose iconic facilities are located throughout renowned beach destinations around the world; Camper and Nicholsons, renowned UK-marina management specialists, for a luxurious international-standard 30-berth marina at the Township; a world-class travel retailer; Hard Rock International Hotel Group with a ‘new DNA’ resort concept featuring Rock Star suites; and a secluded upscale lifestyle resort that will offer guests highly-exclusive water villas.

The Café Del Mar in the Maldives, will be the largest beach club ever built in Indian Ocean and will be a flagship outlet in the region, covering an area of 5,000 square metres. The club is popular among its fans thanks

to its high creativity. The beach club will offer guests the ability to experience all aspects of a vacation, based on their personal tastes, especially partying along with leading world-renowned DJs.

Upon partnering with Singha Estate, Mr. Domenic Zappa, the Club’s Director stated “The Maldives offers a unique location that is very attractive to Café del Mar. It has amazing weather, a relaxed vacation atmosphere, a stunning Indian Ocean view, and most importantly, it is a stone-throw away from the capital city, Male’. It’s the perfect location for us to expand the Café del Mar experience to a new market of inspired travellers”

Mr. Thongbenjamas said that the township would have entertainment offerings that can be enjoyed by all, Maldivian youth included. “It’s of special advantage to the Maldivian market that it is so close to the capital Male’. The Maldives has a young population with a large percentage under the age of 25. Hence there is a lot of focus on young people and kids in our design and development. The Beach Club Café del Mar will

have a dedicated, specialized area for youth with different water activities such as fly boarding, quadrofoil, and a floatable water park. It will also feature conservational and educational activities in marine biodiversity and coral farming and the development of man-made dive sites”, said Mr. Thongbenjamas

A cultural and marine learning center will also be a part of the development. The center will work closely with local communities to promote art and craft of the nation and the conservation of the country’s delicate marine environment and the preservation of the country’s rich biodiversity.

Five thousand new career opportunities are expected to be created once the development is completed. Singha Estate has plans in place to roll out global sustainable tourism practices to enhance skill development of project employees and local students.

Singha Estate is highly confident in their decision to invest in the project and its success, as a development that will change the face of tourism in the Maldives. Mr. Thongbenjamas said “Singha Estate is related to Singha Corporation. It is one of the most established corporations in Thailand hence we have the opportunity to invest in several interesting projects around the world and we have confindence that this investment will strenghten our business portfolio”.

Mr. Thiti Thongbenjamas, Chief Investment Officer, Singha Estate

“The Café Del Mar in the Maldives, will be the largest beach club ever built in the Indian Ocean”.

““From my experience working in large scale hotel development projects around the world, I can say that Maldives is one of the most preferred investment destinations in many ways; the country although small in size has very high potential in “beyond conventional” tourism.”

Crossroads is expected to significantly expand the Maldives’ appeal as a multifaceted tourism destination. It will become a must visit destination for holidaymakers across the world and is set to ‘redefine’ the vacation experience with integrated lifestyle tourism and offer more unique creations that will re-ignite and stimulate the country’s tourism economy.

“Currently the Maldives is an upscale luxury destination. We see great opportunity to open up to new market segments and we believe that there is a huge demand in the mid-market segment, especially in the family and friend travelers, seeking more vibrant experiences.

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HUSSAIN AFEEFA Pioneer’s Path

Tourism might be at the heart of the Maldivian economy but for those with vision the Maldives can be much more than a luxury destination

Hussain Afeef is a visionary, a pioneer who played a crucial

role in establishing tourism in the Maldives in the early 70s. Later, he was instrumental in elevating Maldivian tourism to the highest tier, bringing the Hilton Group to the country in 1997 to what would eventually become Conrad Rangali Island. Rangali Island, the resort that would dazzle the world with the first underwater restaurant. He may appear relaxed but when he speaks there’s a certain zest, a desire to get things done. On the back of his vastly successful tourism endeavours he has diversified into different areas including healthcare, finance and transportation. Tree Top Investments, which Afeef and his partners founded, embodies this drive to branch out. The company is clearing a path for those wishing to move beyond the tourism paradigm.

Crown and Champa Resorts (CCR)

The Maldives is greatly dependent on tourism; the industry is responsible for more than 60 per cent of the country’s foreign exchange earnings. And in the microcosm of Afeef’s economy, tourism is at the crux. Thus, CCR continues to be an integral part of Afeef’s operations.

The company came into being in the mid-2000s. By then Afeef and his partners were managing several properties in the country. A key moment was when Hilton set up shop in Rangali in 1997. “That was a turning point in a way because it affected how we structured brands,” explains Afeef. “So around 2000, we wanted to put our own management system in place and a few years later CCR was born.”

Diversification is evident in CCR’s portfolio of resorts. Properties range from top-end to economy, from private islands to resorts with over 200 villas. “We’re the Maldives in a nutshell,” says CCR’s CEO Martin Vossen. “We have a such a diverse collection, featuring almost every kind of property that’s found in the Maldives. This is our strength.”

What links all these properties, Vossen believes, is their shared Maldivian heritage. “When you look at many new resorts in the Maldives, they could be from anywhere in the world,” he says. “Our collection is different, you can tell that they are distinctly Maldivian, not only by the look and feel but also because most of our staff and our partners are local. Even Lars Petre, our Swedish partner, has been involved in Maldivian tourism for over thirty years.”

Cont. >

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Tree Top Investments: diversifying economic activityTree Top Investments represents the drive for diversification of Afeef and his partners. Fuelled by this drive, it has made major investments in health and finance, managing the Tree Top Hospital in Hulhumale, the Commercial Bank of the Maldives (CBM) and the Maldives Finance and Leasing Company (MFLC).

“Myself, my friends and partners have been involved in tourism here for the past forty years or so,” says Lars Petre, talking about Tree Top’s inception. “We developed some of the best-performing resorts in the country. And being very successful in tourism, we founded Tree Top Investments in 2013 to contribute to the development of infrastructure in other sectors of the economy.”

“After discussions with my partners, I brought all the companies together under Tree Top,” adds Afeef. “All of us together had the potential to do big things. We diversified ourselves from tourism and one of our first investments was the buyout of MFLC.”

MFLC

MFLC was initially set up in 2002 by the Maldives Monetary Authority (MMA) and the International Finance Corporation (IFC).

“We acquired the company in 2014, and in that period [2002-2014] MFLC had its ups and downs,” says Ibrahim Vishan, a director at Tree Top Investments. “When we took over it was sort of on its last legs.”

MFLC’s performance up to 2014 was below expectations and it had a high non-performing asset ratio. “When we took over in April 2014, the non-

performing asset as a percentage of the total portfolio was 73.13 per cent,” Vishan points out. “At the end of September this year, that figure stands at 7.7 per cent.”

They managed that quick turnaround through what Vishan describes as a two-pronged attack: MFLC worked on the recovery of non-performing assets while also expanding their lending.

Under Tree Top, MFLC was cautious in its operations, lending to low risk individuals, those employed in civil service for instance, and reputable companies.

“We targeted small and medium sized businesses who were having issues getting finances through the traditional route [from the banks],” says Vishan. “We assessed them and found ways to help.”

MFLC is looking into Islamic financing to further expand their repertoire of services.

“We have a good understanding of our market,” adds Vishan. “We’re investing in areas where we might not have specialised knowledge but we bring in experts to provide solutions while we offer them an insider perspective. Having a diversified portfolio makes sense security-wise; you don’t put all your eggs in one basket.”

Commercial Bank of Maldives (CBM)

Finance, though new territory for Afeef and his partners, is something they’re keen on exploring. So, on the back of a successful foray into the sector via MFLC, they invested in the Commercial Bank of Maldives (CBM).

“The rationale behind CBM was that, when we started off, we were paying huge sums in interest to the banks,” explains Afeef. “For a long time, we’d

been saying that we needed something like this. We had a great need for banking for our own activities, that was one reason. We also wanted to help out small and medium enterprises (SMEs). So, we made a joint venture with the Commercial Bank of Sri Lanka as we lacked the expertise ourselves.”

Adam Saleem, who oversees CBM, echoes Afeef’s words. “There was an unmet need in banking,” he says. “On paper, the Maldives has a lot of banks. We’re the eighth bank that was issued a licence. But the only bank that’s really doing anything for the locals is the Bank of Maldives (BML).”

BML’s approach is to have physical branches in the country. Saleem envisions a different approach. “I think an unmet need is to go digital, where you have digital wallets,” he says. “Then, wherever you’re in the Maldives, you can exchange money.” Saleem believes it’s the kind of service that competition will introduce to the market eventually, whether via BML or CBM or another institution. Competition is what’s going to benefit customers in the end. Having one bank dominate the sector isn’t favourable in the long run.

The Maldives is too small to focus on a particular area, Adam believes. Thus, CBM will provide services for everyone. “Afeef is correct that we want to focus on the SME sector,” says Adam. “Studies have shown that if that sector performs well, that’s when businesses start evolving. We were SMEs thirty years ago and we’ve grown to where we are now over time.” Adam believes when CBM becomes big in a few decades, the SMEs who currently bank with the institution will be big as well. In thirty years’ time he expects CBM to be on level pegging with BML.

Is there room for more financial institutions in the Maldives? Adam thinks there is for those that come in with innovative products. There’s also space, Adam points out, for those in the fintech sector to partner with existing banks to provide platforms that would work with the Maldives’ core banking system.

Tree Top Hospital

Competition is what brings out the best in players, and Afeef and his partners believe Tree Top Hospital will be a catalyst for transformation in the health sector.

“What we wanted with the Tree Top Hospital was to provide an alternative for those in the country who have to seek treatment abroad,” says Afeef. “It’s a great inconvenience, having to go abroad, and we wanted people to have access to quality healthcare here at home.”

Since Tree Top Health Pvt Ltd embarked on their USD 100 million hospital project, others have followed suit. It appears that the company has encouraged government and private sectors to take bold steps forward.

“There is scope for very specialised areas,” says Ahmed Saleem, chairman of Tree Top Hospital. “For example, we’re concentrating on chemotherapy. I think that health sector investments focussing on particular areas, like radiation therapy for instance, could be socially and financially rewarding.”

Saleem believes there is potential in the Maldives for medical tourism. “We intend to explore that angle, but probably after the next couple of years,” he says. “We have to establish our procedures and our operation to a certain standard prior to that.”

Saleem’s idea of medical tourism is vast in its scope; he envisions hospital-centred tourist

centres replete with resort-style accommodation, retail shopping and entertainment centres. “There are places like that even in South Asia,” he says. “There’s a place just outside Cochin in India, where there are similar complexes with modern facilities. It’s not just a daydream, it can actually be done.”

Tourism might be at the heart of the Maldivian economy but for those with vision the Maldives can be much more than a luxury destination – merely one aspect of these multifaceted islands. The country is in need of pioneers like Afeef to explore exciting new possibilities and reap what they offer.

Cont. >

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VELANA INTERNATIONAL AIRPORTBuilding the Gateway of the Future

For a long time since its simple beginnings in 1960, VIA was seen as a symbol of national prosperity. Today, once again, it is on the verge of taking its position as the country’s greatest pride.

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New seaplane terminal

Velana International Airport (VIA) is the gateway to the

Maldives and the hub that drives the multi faceted air travel network of the country. With an average of 80 daily international flights that connect the country to the rest of the world and a domestic network that caters to those travelling to the 10 domestic airports dotted around the country and an additional 350 daily seaplane movements operated from its water aerodrome, VIA keeps the country moving.

With the rapid rise in tourist arrivals during the last 20 years, the growth of domestic air travel along with the introduction of seaplane travel in 1997, the airport has had to grow and evolve over the last few decades. During the last year 1.3 million visitors arrived in the Maldives through the country’s international gateway. Tens of thousands more local travelers and expatriate workers used the airport to travel to and

The expansion of VIA fits in with President Yameen’s vision of building the most dynamic economy in the region.

from countries in the region and beyond. On average 50 flights were operated to the domestic airports per day during the last year. Being home to one of the largest seaplane fleets in the world, it is not surprising that a staggering 350,000 seaplane movements during the year ensured that 800,000 holidaymakers travelled to and from their resort destinations of choice, dotted along the archipelago spanning 800 kilometers across the Indian Ocean.

The Government of President Abdulla Yameen Abdul Gayoom has taken the boldest and the most decisive step so far in the history of VIA, by commencing the execution of its grand plan to build a modern airport that would conveniently cater to the needs of air travelers for the next 30 years. The expansion of VIA fits in with President Yameen’s vision, that is taking shape and form rapidly, of building the most dynamic economy in the region.

The development of VIA underway today is the greatest development and the largest investment that has ever been undertaken in its history.

The development of VIA underway today is the greatest development and the largest investment that has ever been undertaken in its history. In terms of its quality, unique design, aesthetic appeal, the conveniences and comforts offered, the new VIA, expected to be completed by 2019, will perfectly fit in with the Maldives brand as a luxury destination, favored by the rich and the famous, and discerning travelers across the world.

The new facilities at VIA is also designed to energize the growth of the economy, by facilitating the capacity needed to fuel the engines of growth, that will deliver the country to and beyond the new economic frontiers, envisioned in the Government’s ambitious economic plans for the country.

With over 25 new resorts slated to be opened in the next year and many more under various stages of construction, international arrivals are expected to grow exponentially in the next few years. The Government plans to build four new domestic airports in 2018 alone under its program to strengthen the domestic transport network, which will expand domestic air travel to unprecedented levels. Economic development planned for the country and the mega projects that are currently underway will further increase the demand for international, domestic and seaplane travel through VIA in the next few years.

VIA’s new passenger terminal with 78,000 square meters of floor space, is designed to cater to over 7.28

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million passengers per year with the capacity to manage 14 international air traffic movements, serve over 1700 arriving passengers and 1600 departure passengers per hour. Forty check-in counters at the departure check-in hall, will have the capacity to process passengers for several flights at any moment in time. An area of 9000 square meters will house luxury duty free boutiques with international brands from across the world and F&B facilities to cater to the tastes of various nationalities and culinary preferences.

A brand new runway with a length of 3400 meters is an important part of the new development. Built parallel to the existing runway, the new 60-meter wide runway is designed to cater to the largest passenger aircraft in operation in the world today, the Airbus A380. The existing runway will be used as a parallel taxiway for quick and efficient movement of arriving and departing aircraft, at the same time doubling up as an emergency runway. A new fuel

farm with the capacity to hold 45,000 cubic meters of Jet A1, and a state of the art fuel delivery system will fuel incoming aircraft.

Seaplane transfer is an essential part of the tourism industry and the growth of the industry has to be complemented to accommodate the growth of seaplane operations. A new seaplane terminal with a footprint of 7000 square meters will offer operators and passengers 28,000 square meters of floor space. The terminal will have the capacity to process 500 passengers per hour at its peak and 200 as a standard and will consist of 45 docking stands at the onset with a growth allowance of over 70 docking stands to accommodate future growth of aircraft movements. Twenty departure gates each with the capacity to hold 18 passengers will facilitate efficient passenger flow. With a multitude of facilities and amenities for passengers, the terminal is designed to offer convenience and enhance passenger experience, and enable operators

The new facilities at VIA is also designed to energize the economy by facilitating the capacity needed to fuel the engines of growth

to offer seamless connections with international flights to arriving and departing passengers.

Efficient and rapid movement of air cargo is essential to the country’s economy and its vision for the future. The new cargo terminal with a floor area of 18,000 square meters and the capacity to handle 120,000 tons of cargo per year will ensure the delivery of the precious cargo arriving from across the world to feed the tourism industry. Equipped with the latest systems and equipment required for cargo movement, it will also serve as the hub for quick and efficient clearance, transport and delivery of air cargo that drives the various industries that contribute to the livelihood of people today and the growth of businesses that would emerge in the future.

With the massive new development, which will soon be a reality, VIA is

poised to become one of the greatest catalysts of growth for the country’s economy. It will enable the rapid expansion of tourism, providing the capacity to cater to those wishing to experience the natural splendor of the Maldives and enabling resort operators to meet their performance targets. The new airport will boost development of new industry and the growth of existing economic activity to fuel the country’s economic growth and development.

For a long time since its simple beginnings in 1960, when the first ever aircraft to Maldives touched down on its slotted steel runway, VIA was seen as a symbol of national prosperity. Today, once again, it is on the verge of taking its position as the country’s greatest pride and one of the most important components of national infrastructure that will help achieve the dreams and aspirations of the people.

With the massive new development, which will soon be a reality, VIA is poised to become one of the greatest catalysts of growth for the country’s economy.

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Mohamed Ali Janah, chairman of Hotels and Resort Construction (HRC), is one who needs little introduction. Invest Maldives sits down with him to have a chat about being a Platinum Partner at the upcoming exhibition in Dubai, and to find out his thoughts on recent economic reforms and the future of the Maldives.

MOHAMED ALI JANAHOn the Trail of a Trailblazer

Invest Maldives: Can you tell us a bit about why you chose to partner with the Maldives Investment Forum this year? I understand you’re also the main sponsor of the gala event.

Mohamed Ali Janah: We’ve been a partner since the very beginning when it was held in Singapore three years back. The exposure we get from being a partner benefits our company and I believe the forum makes a very positive contribution to the Maldivian economy as well. I was one of those people who, in its early stages, supported the idea of having an investment forum in various cities around the world. I will continue to support this endeavour as long as it moves forward. Our company has done a lot of business in Singapore, China and India, all places where the forums were held, as well as the Middle East and we believe we’ll be getting further positive exposure in Dubai this year.

IM: What do you think of the government’s economic regulatory reforms such as the SEZs and the constitutional amendment doing away with restrictions on foreign ownership of land here?

MAJ: I was part of one of the very first panel discussions on television when the SEZ bill was discussed. I was one of those people from the private sector who believed in the Maldives being on par with other countries in the region. We’re living in a very competitive world right now. The expectations of citizens are very high and they want to see results quickly. So the Maldives cannot sit idly, and being a small island nation we have to do more than many other countries. I’ve always seen our beautiful islands

as our greatest asset, we have to keep tapping this rich natural resource, which is the remarkable beauty of this nation.

I believe in continuing to develop what we have and going beyond current models of tourism development. The special economic zone policy is an excellent step, policy-wise. There are lots of people with great wealth and they want to invest that wealth somewhere safe, where it won’t be entangled in bureaucracy or red tape. Those people really want to go beyond tourism and invest in diversified sectors and thus the incentives under the SEZ framework give potential investors a golden opportunity to execute projects successfully with a remarkable rate of return.

IM: Such development will have a knock-on effect on the construction industry. What are your thoughts on the industry as it stands now and what do you make of its prospects?

MAJ: We were in a difficult spot when this government came into power. The industry had very few players. The construction industry is a frontline industry, so when the economy, in our case when the tourism sector, does well, construction does well too, and when it slumps, the industry slumps. We saw an increase in oil prices and construction material prices from 2008 onwards. It was a tough period. But this government put the right measures in place to help contractors. This government changed a lot of policies and greatly assisted companies with financial difficulties. For a contractor to get into a contract, you need to provide a performance bond and

“ The special economic zone policy is an excellent step, policy-wise. There are lots of people with great wealth and they want to invest that wealth somewhere safe, thus the incentives under the SEZ framework give potential investors a golden opportunity to execute projects successfully with a remarkable rate of return.”

Mohamed Ali Janah, chairman of Hotels and Resort Construction (HRC), has helmed one of the most successful construction companies in the country, impressing clients local and foreign. His firm has offices in several countries and over the years he’s worked with some of the biggest names in hospitality in the Maldives and abroad. He was also the president of the Maldives Association of Construction Industry (MACI) for six terms and serves as the First Vice President at the International Federation of Asian and Western Pacific Contractors’ Association (IFAWPCA).

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“I think the next fifteen to twenty years will be crucial. We have a young population that is highly educated, intelligent and enterprising. So if we put ourselves to work to take this country to the next step I really think it can be achieved. I call this the ‘Maldivian Dream’.”

an advance payment guarantee that the banks didn’t provide most of the companies. So the current government established a mechanism to help contractors to access banking instruments without much collateral. So, today we find that we have a lot of business; we’re reaping the benefits of those policies now. Near Male’, there are more than 25 lagoons that are being reclaimed and a lot of islands are in the pipeline to be developed as resorts. There are a lot of housing schemes and many other development projects. All of this has come into the market in a relatively short period of time. The prospects for the construction industry look very good.

IM: You were the president of MACI. What were some key measures that you took to improve the wellbeing of the industry during your tenure?

MAJ: Being in MACI was my chance to give back to the construction industry and the community. Something that I hold close to my heart is the occupational health and safety of the workers. So, during my tenure, in the absence of regulation or legislation, MACI was able to produce a health and safety guideline for all workers. So anybody who became a member of MACI had a guideline to follow and members automatically got a health and safety policy in their system.

Secondly, we’d been trying to promote capacity building of young Maldivians, for young people to become entrepreneurial, to become good contractors. My emphasis was on encouraging small and medium enterprises (SMEs). This government, via the Ministry of Economic Development, provided two excellent schemes to establish and expand SMEs.

Thirdly, the efforts to improve labour management in the country has been an ongoing issue for a very long time.

During my tenure we witnessed the enforcement of a government policy with our support where every expatriate worker was required to have health insurance. As we’re dependent on imported labour, it only makes sense to ensure that they are looked after. Ours is a caring society, we see to it that expats are also cared for.

IM: Lastly, how do you see the economic outlook of the Maldives? Where do you think we’re headed?

MAJ: I always say that the Maldives is full of potential. We have our version of the ‘American Dream’, on our scale. We’re lucky to be born during such an exciting period, and I think the next fifteen to twenty years will provide a very good window for all of us. They will be crucial years. We have a young population that is highly educated, intelligent and enterprising. So if we put ourselves to work to take this country to the next step I really think it can be achieved. I call this the ‘Maldivian Dream’.

“..the Maldives cannot sit idly, and being a small island nation we have to do more than many other countries. I’ve always seen our beautiful islands as our greatest asset, we have to keep tapping this rich natural resource, which is the remarkable beauty of this nation.”

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Fitch Ratings first assigned a sovereign rating to the Maldives in May 2017. Its ‘B+’ Long-Term Issuer Default Rating is supported by the country’s level of development, strong GDP growth, and high government revenue generated by a thriving and prosperous tourism sector. Policy-makers in the Maldives also face some challenges, most notably a high government debt burden and low foreign-exchange reserve buffers; which together with the lack of diversification, leave the country vulnerable to external shocks.

The Maldives’ unique natural settings and diverse marine

life have for many years attracted high-spending tourists, generating an influx of foreign financing, goods and people. As a result, the economy is relatively wealthy, as illustrated by a GDP per capita of USD9,235 which is around three times the level of similarly rated sovereign peers such as Sri Lanka, Nigeria and Tunisia. Real GDP growth in the Maldives is also strong, which Fitch expects to pick up to 4.3% in 2017 and 4.5% in 2018, from 3.9% in 2016, supported by tourist spending and construction.

Many new resorts are being built by private developers, and large public infrastructure projects are being undertaken by the government. These include capacity expansion

RATING PARADISE

of the main airport to support the government’s aim of attracting more tourists than the 1.29 million in 2016. Other large projects include a bridge linking the capital Malé to population centres, an advanced medical centre and new housing. Many of these projects seem to have the potential to facilitate a surge in tourism within a few years. At the same time, execution of so many large projects poses challenges to avoid widening fiscal deficits and a swelling debt burden.

The government seems aware of the fiscal challenges, as it laid out measures to avoid a blow-out of government debt in its budget for 2017. Government indicated its intention to boost the amount of revenue raised and to cut current

expenditure to make fiscal space for the large construction projects underway. Fitch expects these measures to lower the 2017 fiscal deficit to 2.6% of GDP from an estimated 7.4% in 2016, although government is aiming for a more ambitious target of just 0.8% in its supplementary budget of November 2017. The latest revenue measures include adjustment of the GST registration threshold and increased collection of lease extension fees.

Government has more means at its disposal to finance expenditure than most of its peers. Its ability and propensity to tax the luxury tourism sector has led to a revenue ratio of 34.8% of GDP, significantly higher than the ‘B’ category median of 24.7%. There may be potential to further increase the amount of revenue raised from tourism if needed, given the less price-sensitive nature of demand in the luxury segment. Government revenue forms an important link between tourism and other sectors of the economy.

Stabilisation of general government debt at current levels (65% of GDP in 2016), as assumed by Fitch, depends on the government’s ability to follow through on its fiscal consolidation plans. In the longer run fiscal risks are also related to climate change and its associated impact on the environment and natural resources.

Raising the level of foreign-exchange reserves forms another challenge for the authorities. At just USD519.4 million at end-September 2017 (1.5 months of current account payments), reserves are barely sufficient to support the Maldives Monetary Authority’s peg of the Maldivian

rufiyaa to the US dollar. Useable reserves (defined as gross reserves minus short-term foreign liabilities) are even lower, at USD191.9 million. Foreign-debt financing of the large construction projects will increase the importance of foreign-reserve buffers in the years ahead.

The challenge posed by the low foreign-reserves base is mitigated by strong foreign direct investment and foreign-exchange inflows generated by the tourism sector, which both earns and spends in US dollars. As a result, the authorities have managed with similarly low levels of foreign-exchange reserves for a number of years without experiencing an exchange-rate shock.

The benefits of the tourism sector have brought the Maldives a high level of per capita income, but have also led to volatility in GDP growth in recent years, given the sector’s dependence on the global economy. The country’s dependence on a single sector such as tourism causes volatility in economic metrics and leaves it vulnerable to external shocks or domestic developments that could undermine the Maldives’ attractiveness as a tourist destination, such as changes in the perceptions of safety.

The Maldives issued its first foreign-currency sovereign bond last June, a five-year US dollar bond to which Fitch assigned a ‘B+’ rating in line with the Long-Term Issuer

Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In this article, Fitch is not (i) providing any investment advice, (ii) making any recommendation to buy, sell or hold any security, or (iii) conducting an offering for the purchase, sale or holding of any security. In addition, any opinion expressed in this article regarding any matter is subject, in its entirety, to the limitations and disclaimers printed on Fitch’s related rat-ing action commentaries and rating reports, which are accessible on Fitch Ratings’ website. The information in this article is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the article or any of its contents will meet any of the requirements of a recipient of the article.

Default Rating. The authorities will use the proceeds for budget and infrastructure financing.

Fitch’s Outlook on the Maldives’ sovereign rating is Stable, reflecting our assessment that upside and downside risks to the ratings are evenly balanced. A significant rise in general government debt or balance-of-payments pressures could weigh on the Maldives’ rating. Conversely, a positive rating action could be possible if policy initiatives are implemented to lower general government debt and to strengthen external buffers through accumulation of foreign-exchange reserves. Diversification of the economy beyond tourism would also be positive, for example, by implementation of structural reforms that enhance the business environment.

Further details on Fitch’s rating of the Maldives can be found here (https://www.fitchratings.com/site/pr/1023692)

Maldives’ Dependence on Tourism Brings Both Opportunities and Challenges

Real GDP growth in the Maldives is also strong, which Fitch expects to pick up to 4.3% in 2017 and 4.5% in 2018, from 3.9% in 2016,

Fitch’s Outlook on the Maldives’ sovereign rating is Stable, reflecting our assessment that upside and downside risks to the ratings are evenly balanced.

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DEVELOPMENTS IN THE MALDIVESA Banker’s Perspective

Bank of Maldives CEO and Managing Director, Andrew Healy sat down with “Invest Maldives” and gave us his assessment of the Maldivian economy’s performance and future prospects.

“Maldives has enjoyed average economic growth of 4.5% over the past five years and has the highest GDP per capita in South Asia. It is little wonder the World Bank has described the country as a development success story.”

“The extent of state infrastructure investment allied to the supportive legal, taxation and trade environment is providing strong inducements to invest in Maldives and inward investment is therefore increasing steadily.”

What is your view of the country’s economic performance and how optimistic are you about future growth prospects?

We are witnessing a very positive story here and there are a lot of reasons to be optimistic. Maldives has enjoyed average economic growth of 4.5% over the past five years and has the highest GDP per capita in South Asia. It is little wonder the World Bank has described the country as a “Development Success Story”. Government policy is business friendly and there is a coherent strategy in place to attract overseas investment. The economy appears poised for further growth as a result of the comprehensive ongoing program of infrastructure investments.

What are your views on the Maldives’ tourism industry?

The tourism sector remains resilient and attractive. Numbers of tourist arrivals are reasonably encouraging and returns for investors remain high.

Maldives has developed an elite tourism brand over the years. This is in no small part due to the efforts of the industry’s pioneers who have retained a passion for visitor satisfaction and continuous improvement. We have also seen a lot of developments recently that have made the industry even more attractive. There are more luxury products entering the market and Maldives continues to be a world leader in this segment. But we are also seeing more diversification, with an increase in safari vessels and indeed guesthouses.

From an investor’s point of view, returns continue to be highly positive at five to eight years on average. More and more global brands are establishing and expanding in the resort sector which is indicative of the excellent returns on offer.

It is also important to note that tourism plays a key role in national development, particularly through job creation in terms of food and beverage, management, dive schools and so on. The success of tourism also propels many other industries forward and that is good news for everyone.

Which other industries are expanding?

Well, there has been growth in industries as diverse as financial services, energy, transportation and marine technology. The extent of state infrastructure investment allied to the supportive legal, taxation and trade environment is providing strong inducements to invest in Maldives and inward investment is therefore increasing steadily.

According to the Ministry of Economic Development, there has been almost USD 100 million in investments so far this year, more than half of which has been into non-tourism sectors. The construction sector is benefiting most due to the number of new infrastructure projects but we are seeing more investment also in aquaculture, fish processing and marine based products and related infrastructure. I expect we will see more interest and developments in these industries over the coming years.

It is also clear there are growing levels of interest in financial services as evidenced by two new insurance companies and one new bank entering the market over the past year or so.

In your opinion, how interconnected is the financial sector’s development with economic growth?

They are very closely connected.

Businesses need to raise capital in order to invest and grow. So a competitive and supportive financial sector is required to provide those sources of capital. It is my view that Bank of Maldives is leading the way in this regard, particularly through our funding support which has increased substantially over recent years. There have also been some welcome developments in the capital market which will help mobilise medium and long term savings among the local population. For instance, we recently saw one of the country’s major telecoms companies generate a high level of interest through its IPO.

How do you see the Bank’s role in supporting economic growth?

We are the leading bank for business with tremendous experience of dealing with SMEs, large corporate clients and foreign businesses. Foreign investors who come to us benefit from having access to a dedicated team of corporate banking specialists to guide and support their business. We see our role in facilitating foreign investments as important.

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Bank of Maldives’ Head Office in Male’ City.

“Foreign investors who come to us benefit from having access to a dedicated team of corporate banking specialists to guide and support their business. We see our role in facilitating foreign investments as important.”

Developments in the Maldives. Cont.

We have been scaling up our support for local businesses over recent years. Just a few years ago we were lending about MVR 1 billion (USD 65 million) per annum. This year that figure will be three times as high, so we’re playing our part as an engine of growth for the economy.

We also have a wide geographic reach which no other bank can match. This is advantageous to businesses, particularly if they have operations outside the capital city, Male’. With over 260,000 customers, we are touching the lives of almost every individual and business through our network of branches, agents, relationship managers and online banking facilities.

You have recently expanded your Islamic banking arm. Do you see a lot of potential in this market?

Yes we do. We launched BML Islamic in 2015 and since then we’ve been steadily building up our portfolio of products and services. A strong deposit base, new headquarters and a capable, well-trained team provided the springboard for us to recently introduce our first financing products. We now have a full suite of housing finance facilities and in just a few months, we have received over MVR 700 million (USD 45 million) in applications for funding. With BML Islamic’s services offered through our branches in every atoll, we have the largest Islamic banking network in the country which means people don’t need to travel far to avail of our offerings.

With the expansion of Islamic financial services, including Shari’ah-compliant insurance products, I think Maldives is well placed to become a leading regional player in Islamic finance. It will be interesting to see developments in this regard over the coming years.

How do you see the Bank’s future? Do you have plans for further expansion?

Well, we already have the largest retail banking network in the country, larger than all other banks combined. We are continuing to expand our reach, to ensure we have a local and convenient presence throughout the country. We have an ongoing community investment program which includes a number of new branches, retail agents and self service banking centres.

We are also leveraging new technology. We offer highly user-friendly internet and mobile banking which is of course important in this geographically dispersed country. With the proliferation of smartphones and a very tech-savvy population, more and more of our customers are choosing to bank online. Currently, 9 out of 10 transactions in our bank take place online and away from our branches. But branches remain important for face to face engagement when that is needed.

As an ambitious, profitable and well capitalized bank with a large market share, it of course makes sense to consider expansion beyond local shores. Maldives will always remain our core focus but given the extent to which our loan book in particular is concentrated on this economy, we should consider diversifying in a prudent way. So we are looking closely at opportunities across the Asian region.

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DREAM RISING

Hulhumale’ is a paradox at many levels. It is secluded, yet it is just a ten-minute drive from Velana International Airport. The city’s greenery together with its calm and peace is in sharp contrast with the crowds and the hustle and bustle of Male’, but it is not too far to drive over whenever you need. The City incorporates ‘purpose-designed’ commercial zones where business can be conducted efficiently, with state-of-the-art infrastructure. Yet it offers residential solutions, removed from those zones, harmoniously blended in with its beautiful tropical environment.

Where else can you enjoy the pleasure of being in one of the most romantic destinations of the world and conduct your business from your penthouse residence, overlooking award winning beaches and tranquil turquoise lagoons?

Located just a short 15-minute drive away from Male’,

Hulhumale’ is a city that has risen from the sea, an island that has entirely been reclaimed. The project began in 1999 at the turn of the millennium. It was an ambitious project aimed at relieving Male’ of its congestion, and one that is aligned with the vision of the country’s journey of growth and development in the 21st century.

Since its inception, the island has grown on its expansive reef. A land area of 118 hectares was reclaimed for the first phase of its development. Reclamation was completed in 2004. A thousand people moved into their newly built apartments in the same year, sparking the development of a city, which has now grown to over 40,000.

Hulhumale’s residents enjoy a lifestyle unique from those living in the

rest of the country; a lifestyle that has been shaped by the philosophy of the City’s design. The City has revolutionized the traditional concept of home ownership in the country, with the introduction of new laws that facilitate ownership of strata titles. Residents enjoy wide tree-lined avenues, an efficient transport network and transport services that connect the city with Male’ and Velana International Airport.

Reclamation for the second phase of the project was completed in 2015. Within 77 days, 244 hectares of land were added to the island, the change in pace signaling the Government’s ambitious new plans for the rapid development of the city. Hulhumale’ symbolizes the Government’s drive towards modernization of the country and the dynamic economic development that the country is experiencing today.

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The City’s development strategy is based on creating synergies between the various sectors to provide the ideal atmosphere for growth.

Modern living

With a population targeted to reach 240,000 in the next ten years, Hulhumale’ has been designed to offer a range of residential solutions that incorporate a mix of affordable housing to luxury condominiums. Modern infrastructure coupled with excellent investment opportunities that have been incorporated into the physical design and its development strategy, will bring in investment in a wide array of modern industry, creating 100,000 jobs for those living and working in the city.

The City’s residential solutions cater to those who wish to own simple modern residences as well as those who aspire to own residential spaces for lavish global lifestyles, comparable to that offered in the most livable cities in the region. New condominiums slated for development would include shopping

facilities, parking and roof top infinite pools, offering residents the amenities for modern living. The City’s development policy would ensure that 70% of residential development would be retained for affordable housing, albeit in a style and design that suits the overall development of the city.

With work places in close proximity to living areas, but zoned far enough to shield residents from the stresses of commercial activity, Hulhumale’ offers the ideal environment for family life. It is already home to some of the best hospitals in the country as well as renowned international schools with more at various stages of planning and development.

Residents would enjoy the opportunity for healthy lifestyles with swimming pools, biking and jogging tracks and an array of indoor and outdoor sports facilities. A water

theme park is scheduled to open before the end of 2018.

A sustainable green city

Open spaces and green areas have been systematically incorporated into the planning, maintaining a ratio of 2.5 square meters of open and green space per resident. These spaces will be developed into urban tourist attractions in order to achieve commercial sustainability. The close proximity and easy access to Velana International Airport will offer tourists an opportunity to experience a different perspective of the Maldives with its botanical gardens, cultural and other thematic attractions. Social services and security have been

provided to ensure a safe environment for family life. Police stations, mosques and community centers are part of the design consideration.

The City’s development places an unrelenting emphasis on an environmentally ethical approach in all stages of its development. The urban design implemented in Hulhumalé includes air corridors and structures placed to attain increased ventilation and natural lighting. Additionally, generation of energy from biomass, waste-to-energy projects and rain water harvesting techniques remain amongst those proposed for potential renewable energy initiatives in Hulhumalé

Hulhumale’s residents enjoy a lifestyle unique from those living in the rest of the country; a lifestyle that has been shaped by the philosophy of the City’s design.

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the significant features of the district will be a Global Finance Centre placed at the heart of the district.

Knowledge Park

Hulhumale’s purpose-built Knowledge Park is a place where college and university campuses can benefit from the synergy generated from various sectors of the City. The objective is to create a knowledge community through a theme of sustainability. Local universities will have the opportunities to partner with leading universities of the world to provide a world-class learning environment in specialty areas such as marine biology, marine technology, medical technology, water management, coastal engineering, IT and finance.

Technopolis

The Technopolis offers an environment for local and global IT companies for rapid growth. While companies can benefit from the city’s close proximity to the country’s

logistical infrastructure, being located in one of the most desired tourist destinations of the world, employees can enjoy its pristine beaches, magical reefs and idyllic islands during their leisure. As with other key development sectors, the IT investor will benefit from the huge incentive programs offered in the City.

Tourism Island

The Tourism Island separated by a narrow waterway is part of the unique design of Hulhumale’ and it offers the opportunity to invest in the next frontier of the country’s lucrative tourism industry. The Tourism Island embodies the essence of economic and commercial opportunity in Hulhumale’ and investors can choose to invest in properties ranging from mega hotels to resort condominiums and serviced apartments of different scales.

With a yacht marina and yacht club in the City’s lagoon, and abundant parking space for private jets at the

Dream Rising. Contd.

Synergies for growth

Hulhumale’, the ‘City of Dreams’, offers a range of investment opportunities for the international investor. While it is open for investment in real estate development, schools, hospitals, shopping malls, recreation and entertainment facilities and an array of other commercial activity, it also offers the opportunity to invest in the country’s urban tourism sector, in the form of high-end luxury hotels. The City’s development strategy is based on creating synergies between the various sectors to provide the ideal atmosphere for growth.

The Financial District

The financial district of the City is aimed to push the Maldivian finance and banking sector into the 21st century. It will serve as a global financial hub with iconic green buildings; a modern setting where local and international banks will setup their offices or branches. One of

newly developed Velana International Airport just a short drive away, luxury properties in the Tourism Island would appeal to the jet-setting traveler seeking rest and rejuvenation amidst the tranquil lagoon and soft sandy beaches of the island, at the same time having access to the abundant facilities in the city.

Hulhumale’ is a smart city, which carries with it, a proud sense of direction and purpose. It’s a City developed with meticulous attention to detail both in its design and objectives. Located in one of the most desired destinations of the world, with world-class infrastructure that includes a modern road network and

state-of-the-art ITC infrastructure and with its close proximity to the Male’ sea port, a modern international airport right next door, access to international logistical, financial and other global service platforms, Hulhumale’ is set to become the ideal place to live, work and play.

Hulhumale’ symbolizes the Government’s drive towards modernization of the country and the dynamic economic development that the country is experiencing today.

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Invest Maldives

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Volume 3 | 2017

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Maldives-China Free Trade Agreement concludedChina-Maldives Free Trade Agreement negotiations which began in December 2015 was concluded in September 2017. The FTA was signed in December 2017, making it the first bilateral Free Trade Agreement (FTA) that the Maldives has signed with any country. The FTA covers trade in goods and services and investments.

(Source: Ministry of Economic Develop-ment)

Hong Kong-Maldives Free Trade AgreementNegotiations for a Free Trade Agreement between Maldives and Hong Kong commenced in May 2016. Two rounds of negotiations were held during the year and the negotiations are expected to be concluded in early 2018.

(Source: Ministry of Economic Develop-ment)

Bilateral Agreement with UAEMaldives signed its first bilateral Investment Promotion and Protection Agreement and Avoidance of Double Taxation Agreement with UAE in October 2017 under the witness of the leaders of the two countries.

(Source: Ministry of Economic Develop-ment)

Gan Airport ExpansionGan International Airport (GIA) in the South of Maldives, which opened for full-scale international operations in 2016, has undergone US$50mn re-development. Under the project, the runway was extended to 3,400 meters and widened to 60 meters to accommodate larger aircraft. In the addition to the expansion of other facilities, a seaplane terminal was also built under the project. Trans Maldivian Airways will be offering seaplane transfers to the nine resorts in the region for passengers arriving at GIA.

Six new resorts open for businessSeveral new resorts are under construction at present. During 2017 six new resorts have been opened. These include Kudafushi Resort & Spa and Dhigali Maldives in Raa Atoll, Kandima Maldives in Dhaalu Atoll, Grand Park Kodhipparu Maldives in Male’ Atoll, Fushi Faru Maldives in Lhaviyani Atoll and Robinson Club Noonu in Noonu Atoll in the north of the country.

Fitch assigns sovereign rating to Maldives Fitch Ratings assigned a sovereign rating to the Maldives for the first time in May 2017. Its ‘B+’ Long-Term Issuer Default Rating is supported by the country’s level of development, strong GDP growth, and high government revenue generated by a thriving and prosperous tourism sector.

INVESTMENT HIGHLIGHTS Commercial Bank

of Maldives opens in Male’Sri Lanka’s Commercial Bank in partnership with Tree Top Maldives kicked off operations of the Commercial Bank of Maldives (CBM) in 2016. CBM is the eighth bank to register in the Maldives. With subsidiaries in Bangladesh and Myanmar, Sri Lanka’s Commercial Bank is ranked among the top one thousand banks in the world. CBM registered a profit after tax of LKR 1bn in 2016.

(Source: Lanka Business Online)

Three new regional airports improve air connectivityThree new regional airports were opened during 2017 as part of the Governments efforts to create a modern transport network across the country. These include Ifuru Airport in Raa Atoll, creating easy access to the north central atolls of Raa and Shaviyani and Kudakuvadhoo Airport in Dhaalu Atoll, providing connectivity to Dhaalu Atoll and Faafu Atoll. Expansion of Kooddoo Airport in Gaafu Alifu Atoll in the south of the country was also completed under which the runway was extended from 1200 to 1800 meters and parking spaces for private jets were developed.

(Source: Ministry of Tourism)

US$ 120mn transactions in the tourism sectorA total of US$ 120mn worth of investment transactions took place in the tourism sector in 2016. The following transactions are notable.

• Acquisition of Kuda Rah Island Resort in Alif Dhaal Atoll by Sri Lanka’s Hayleys for US$ 23mn

• Acquisition of Zitahli Kuda Funafaru in Noonu Atoll for US$ 31mn by Singapore-listed Roxy Pacific Holdings

• Singapore-based SC Capital Partners Group acquired Gaakoshibee Island Resort in Shaviyani Atoll for an undisclosed amount

• Singapore’s Chip Eng Seng Corporation Ltd in partnership with Park Hotel Group acquired Kodhipparu Island Resort in North Male’ Atoll for US$ 65mn

(Source: Jones Lang LaSalle)

China’s CCCC secures Male’-Airport bridge contractIn 2016, China’s CCCC Second Harbor Engineering Company secured one of the largest ever infrastructure projects undertaken in the Maldives; to build the China-Maldives Friendship Bridge between Male’ and Velana International Airport. The US$210mn project will link Male’ with the airport and includes the development of some areas in Hulhumale’ Youth City.

(Source: Ministry of Housing & Infra-structure)

Government awards airport development contractsThe Government of Maldives awarded contracts in 2016, to the Saudi Bin Laden Group as well as China’s Beijing Urban Construction Group for the US$800mn project to upgrade and expand Velana International Airport. Under the project, Saudi Bin Laden Group will build a new terminal on the Southwest area of Hulhule’ while Beijing Urban Construction Group will be developing a new 3.2km runway, fuel farm and cargo complex. Singapore’s Surbana Jurong is managing the expansion project.

(Source: Ministry of Economic Develop-ment)

INVEST MALDIVES

ISSUE 03

Ministry of Economic Development

Republic of Maldives