Maldives loses USD 500 million yearly as remittance

Expatriate workers in the Maldives send USD 500 million abroad yearly as remittance, says Economic Minister Mohamed Saeed.

In an appearance on the Public Service Media (PSM)’s ‘Raajje Miadhu’ program on Tuesday evening, Saeed said that the high remittance isn’t a new problem, but a longstanding one that the Maldives has been facing for years.

He noted that the Progressive Party of Maldives (PPM) administration, which Saeed had been a part of, had levied a two percent tax on remittance when it held office from 2013-2018. But the Maldivian Democratic Party (MDP) abolished remittance tax when it took office in 2018.

“We proposed and levied a two percent tax to give weightage to Maldives’ foreign currency input. And we introduced a credit guarantee scheme through the MMA so that Maldivian contractors can guarantee their borrowings. Wasn’t it the MDP administration that abolished this too?” he said.

Highlighting on the incumbent People’s National Congress (PNC) administration’s efforts to reduce the leakage of foreign currency, Saeed that the Maldives currently spends USD 500-600 million annually to purchase fuel.

He said that the project to develop a solar city and increase renewable energy usage will help reduce the spending.

Saeed also spoke about the administration’s efforts begin making payments for imports in Chinese and Indian currencies. He said the initiative will begin “very soon” from India.

He said the administration’s efforts will considerably relieve the demand for US dollars.

The Maldives hosts a large population of migrant workers, many of them undocumented. A considerable number of migrants also run illegal businesses.

According to Maldives Immigration, the country has deported 3,222 migrants between November 17, 2023 and August 25, 2024.