Maldives tourism sector employment

Maldives has been positioned as one of the luxurious tourist destinations in the world, with many international brands operating resorts targeting high-end, high-net worth tourists. Brands like ‘Hilton’, ‘Waldorf Astoria’, ‘Four Seasons’, ‘Jumeira’, and ‘Conrad’, has presence in the country, and attract Premier League players, hollywood and bollywood stars; not to mention, the wealthy princes from the middle east.

As per the 2019 tax statistics, Maldives tourism sector generated about $2.7 billion revenue during the year. With more than 150 island resorts under operation, a significant percentage of the tourism earnings flows out the country. While tourism is the main export earner, and hence the main foreign exchange earner; true benefits of the sector is not efficiently realized by the country.

First of all, almost half of the resorts in the country are either owned or operated by foreign firms. The Maldives tourism product is based on the ‘one-island-one-resort’ concept; whereby the government leases an island for long term (usually 50 years, that can be extended to 99 years), and sometimes the head lessee sub-leases the island to a third party. Thus, many Maldivian head lease holders opted to sublease their islands, and the foreign investors end up owning the lease and the operating the island. Some even choose to sell their head lease to a foreign party.

Naturally, most of these international brands choose to bring their own team for the operation of the resorts; thanks to the long time government policy of not bothering to invest on human resource requirements for the sector. Despite Maldives being one of the top tourist destinations with so many world-class resort brands, the country does not have a world-class hotel school.

As per the recent report published by the National Statistics Bureau, the tourism sector (resorts) employ a total 44,954 as at 2019. Out of this only 21,332 (47%) are locals, while 23,622 are expatriates. The tourism sector being a highly labor-intensive industry, majority of the staff are in the skilled professionals category, with reasonable pay. Further, most staff earn service charge, and tips, in addition to the official basic pay and the allowances.

Most of the staff is employed in the F&B Departments, (29%), while house-keeping employs about 18% on average. Administrative staff account for 14%. Transport and other departments have a share of 30%. Furthermore, as per the data in the said report, 67% of the Maldives resorts are five-star properties, and 30% four-star resorts. With an average of 303 staff in five start resorts, we are looking at an estimated 15,000 or a higher number of expatriate staff in these expensive resorts; with relatively better pay compared to most other industries.

With proper planning, and long term vision, the benefits of the tourism sector could further trickle-down, and youth unemployment better addressed, if there were better efforts to train and encourage locals to work in the tourism sector. So that educated Maldivian professionals could take senior positions at the resorts. This could reduce the burden on the government to employ them in the public sector, with jobs that are  with lower pay, and under-utilization of their skills. This way, we could retain income from tourism further within the economy. More than $100 million per year is estimated to flow out as remittances from the expatriate employees working in the tourism sector (own estimates). Added this, remittances from workers from other sectors, there would be a total estimated outflow exceeding $150 million every year.

Death of George Floyd and the American inequalities

While the United States and the rest of the world have been struggling with the COVID-19 pandemic, with more than 100,00 deaths and about 1.8 million positive cases in the US, massive protests have erupted and are continuing in several US cities, as the whole country saw the video of the last moments of George Floyd’s life. How the very people who were supposed to protect the citizens of Minneapolis, let him die.

George Floyd, who was 46 years old, was reported to have purchased cigarettes with counterfeit dollar bills on the 25^th May. As per the widely seen video, police officer Derek Chauvin was kneeling on the neck of Floyd for several minutes, despite him repeatedly pleading that he could not breathe.

The following day, the four officers involved were fired. Meanwhile as the video is widely shared on social media, protests erupted and hundreds of demonstrators were on the streets of Minneapolis. Police cars were vandalized, and on the 27^th May, the police station where the officers involved were based was set on fire. Soon, protests spread to many other cities.

On the 28^th May, President Trump tweets “when the looting starts, the shooting starts”, and this tweet is hidden by twitter for ‘glorifying violence’.

As per media reports from Reuters, and BBC there were more than 75 cities with protests and wide spread violence in some places. With at least 4,400 people arrested by 31^st May, I saw vides on Facebook and CNN, where several department stores were vandalized and looted by hundreds of demonstrators.

While the most demonstrations were peaceful, the level of outrage that we saw in some videos makes one wonder about the impending problems and frustrations in the country. While the United States has been trying to enforce democracy, human rights, and equal opportunity in other countries; its own backyard is with huge socio-economic inequality, and systemic racial discrimination. The US economy has had a prolonged period of stark income and wealth disparity for the past two decades. It may mean that the country can no longer ignore the widening economic and political inequalities; especially the worsening gap between the African Americans and the rest.

As per Census Bureau data reported by Economist, the average black household income in 2018 was at $41,400 while for whites it was $70,600. One thing that the present COVID catastrophe has shown us; is the relative vulnerabilities of the African-American families and individuals; as they have been the hardest hit.

According to Joe Stiglitz, the top 1 percent controls 40 percent of the US wealth. The hard truth is, just like most of the developing and poor countries of the world, the top 1 percent control the politics, and all major economic decision making in the country, which is most of the time in favor of the 1 percent, and making those at the bottom poorer.