Maldives Tourism Minister Ibrahim Faisal said the government is taking a two-pronged approach to dealing with islands that have been allocated for resort development but have not seen progress.
These undeveloped islands represent a huge missed opportunity for the tourism industry, with the Treasury Department estimating that underdevelopment costs the industry $1.7 billion a year.
The Economic Council proposed two options:
- Island return or lease renegotiation: Underdeveloped islands are reclaimed by the state if leaseholders can’t finance construction, and companies could be hit with heavy fines or forced to abandon their leases altogether, clearing the way for new investors.
- Resurrecting stalled construction: For islands where construction has already begun, the government will consider ways to reward investment and potentially offer special arrangements to encourage completion, which could include lease amendments or other concessions.
Faisal highlighted the problem of islands that have remained undeveloped for decades, leaving tenants with accumulated rents and penalties. The government is proposing changes to the tourism law to address the situation and encourage development.
One option is to reclaim undeveloped islands, but Minister Faisal stressed that the main goal is to find a solution that will lead to the quick completion of the resort.
This is not the first time the Maldivian government has tackled the stalled resort project – successive governments have offered to compromise but have made limited progress – and Minister Faisal is currently in talks with the tenants to find a workable solution.
A renewed focus by the government on these stagnant developments represents a huge opportunity to revitalize the Maldives’ tourism industry and unlock the potential of these precious islands.
