News Desk
The Maldives Tourism Industry Association (MATI) is pushing back hard against President Dr. Mohamed Muizzu’s ambitious economic agenda, in what appears to be a direct attempt by resort tycoons to derail reforms designed to rein in their long-standing influence over the national economy.
For decades, the country’s financial and political apparatus has leaned heavily under the sway of a handful of resort owners. Decisions surrounding state tax revenues and foreign exchange transactions rested with an elite group holding no official government mandate. President Muizzu, however, is moving to challenge this status quo to safeguard the nation’s reserve.
Under the latest government proposal, the Foreign Exchange Act will be amended to mandate that resorts convert 40 percent of their total foreign currency earnings through local commercial banks. This replaces the current framework, which allows resort operators the choice of converting either USD 500 per tourist or 20 percent of their total revenue.
MATI issued a statement calling the proposed 40 percent requirement “unbearable,” pointing out that resorts face heavy foreign currency commitments—including fuel, foreign staff salaries, overseas loans, and taxes. But on the streets, the public largely views these claims as excuses aimed at undercutting government reforms.
Despite tourism generating the lion’s share of foreign currency in the Maldives, local vendors in Male’s main commercial district, Ahmadhee Bazaar, tell a very different story. Resort operators routinely take supplies on credit for up to three months without settling bills, tightly controlling domestic market liquidity even as dollar revenues flow into their accounts abroad.
Compounding the problem, a significant chunk of resort room revenue never enters the Maldivian banking system in the first place. Studies show an estimated USD 3.2 billion (MVR 49.3 billion) is siphoned out of the country annually through illicit financial channels.
The industry’s structural footprint highlights where the profits—and control—really lie:
- Luxury Dominance: 65 percent of operating resorts fall into the 5-star luxury category, with 31 percent in the 4-star tier. Combined, 4-star and 5-star properties make up 96 percent of all resorts in the country.
- Foreign Labor Force: Foreign workers account for 58 percent of the resort workforce, while Maldivians make up just 42 percent.
- Bypassing Local Business: Resorts self-import 85 percent of all goods directly from overseas, freezing out local suppliers. The same resort moguls frequently run domestic retail marts and corner stores as well.
- Sublet Operations: Overseas operators hold leases for 65 percent of resort boutiques, as well as 52 percent of all resort spas and dive centers—revenue streams the Tourism Ministry has largely left unmonitored.
While tourism generates 26 percent of the nation’s GDP, the direct financial yield to the public remains severely constrained.
For years, resort operators kept substantial dollar reserves in foreign bank accounts, artificially tightening domestic dollar liquidity and fueling a lucrative black market inside the Maldives. Government investigations indicate resort practices directly drive up black-market exchange rates, a claim MATI denies, arguing it is unfair to blame the entire sector. MATI maintains that during previous consultations with the Maldives Monetary Authority (MMA), it advocated for a conversion cap of no more than 10 percent.
The administration, however, is refusing to back down. Speaking at a press conference at the President’s Office, MMA Governor Ahmed Munawar confirmed that the legislative changes will fortify state reserves and ensure everyday citizens can access foreign currency through official banking channels rather than the parallel market.
MATI’s aggressive pushback against these reforms shows an industry association prioritizing its own entrenched power over the country’s economic stability. As the administration holds its ground, the move marks a historic effort to restore state sovereignty over the Maldivian economy.
