Nearly a quarter of Maldivian youth are not employed or engaged in education or training, according to the World Bank’s new South Asia Economic Focus report.
The employment share of Maldivians in the booming tourism and construction industries – the main drivers of economic growth – is relatively low as both sectors attract many migrant workers.
“More than a quarter of women are either unemployed or not looking for a job and the share of unemployed among young females is even higher,” the report observed.
“Almost a quarter of Maldivian youth is not in employment, education, or training (NEET). The NEET rate is particularly high for the female youth because of inactivity mostly due to family reasons, while the driver for the high male NEET rate is (involuntary) unemployment.”
Tourism and construction are expected to spur growth in the medium-term but “do not create sufficient jobs for Maldivians,” it added.
The current administration came to power in November 2013 on a platform of large-scale infrastructure development and youth job creation. In his annual state of the nation address this year, President Abdulla Yameen claimed that an estimated 64,000 jobs had been created during his tenure.
A previous claim of adding 70,000 new jobs was widely ridiculed as the figure would suggest unrealistically low unemployment in the 255,000-strong adult population.
The government does not release official employment statistics. The number of workers enrolled in the mandatory retirement pension scheme was 81,922 at the end of 2015.
The World Bank report also echoed warnings from the International Monetary Fund about growing public debt due to the ongoing infrastructure scale-up – the expansion of the main airport and the construction of a bridge to connect the capital with a new urban centre.
“Despite mostly concessional external debt and domestic debt issued at low, fixed rates, and relatively high revenue collection, the risk of external debt distress is high, reflecting the refinancing risk from the Eurobond with a low level of reserves and fiscal risks through guarantees, while the vulnerability of the overall debt portfolio remains elevated, due to its short maturity,” the report warned.
Among the other risks and challenges were “shocks to tourism, a faster than expected recovery of global commodity prices, fiscal slippages, especially delays to controlling current expenditure, and the realization of contingent liabilities through guarantees.”
The World Bank advised, “seeking efficiency improvements in the health system, updating and strengthening its targeted social protection system replacing the food and electricity subsidies, avoiding large hikes in wages and pensions, and improving investment project selection, maintenance budgeting and implementation to increase the value-for-money of public investment.”