Amr warns Maldives could feel impact of Middle East war within 6 months

Former Managing Director of State Trading Organization (STO) Hussain Amr said on Wednesday that the economic impact on the Maldives from the ongoing conflict in the Middle East could become visible within six months.

Amr made the remarks during a press conference held by the Maldivian Democratic Party (MDP). He currently serves as a member of the party’s economic committee.

He said the war, although taking place outside the Maldives, is affecting the global economy and could have consequences for the country.

“For a small economy like the Maldives, this is not a distant war. The Maldivian economy could be affected by it,” Amr said.

According to Amr, global oil prices have shown increases during the conflict. He noted that oil prices reached about $120 per barrel recently.

He said the Maldives depends on imported fuel and higher prices would increase the amount of foreign currency required for imports.

Amr said higher fuel costs could also affect electricity generation, fishing operations and transport. These changes could lead to higher prices for goods and services.

“Even if the price of oil increases by 10 percent, it means millions of dollars will leave the country,” he said.

Amr said the level of foreign currency reserves is also affected by changes in oil prices and foreign exchange spending.

He added that the main risk is not only the increase in oil prices but also the availability of foreign currency required to pay for imports and debt.

Amr noted that about 80 percent of the Maldives’ foreign currency inflows come from tourism. He said the tourism sector could also face effects from the conflict.

He warned that increases in the exchange rate in unofficial markets could raise the cost of imports and affect the cost of living.

Amr said the government should take action while there is still time.

He explained that payments for oil imported to the Maldives are usually made after six months.

“That means the country is now paying for oil imported six months ago. There is still time to prepare,” he said.

Amr added that even if the conflict ends soon, economic effects could still appear later.

He called on the government to inform the public about the situation and explain its response plan.

Amr also said other countries had begun taking measures to address the economic impact of the conflict, adding that the Maldives had not yet introduced similar measures.