Saeed says large projects needed to accelerate Maldives’ economic growth

The Maldives needs large-scale investment projects to accelerate economic growth and remain competitive, Economic Development, Transport and Trade Minister Mohamed Saeed said on Sunday night, defending the government’s Ras Malé agreement with UAE-based developer Eagle Hills.

Speaking at the “Ahaa” public forum organised by the President’s Office and Public Service Media (PSM), Saeed said projects such as the Eagle Hills development were also needed to increase revenue and address the country’s expenditure.

The government signed a Commercial Terms Agreement with Eagle Hills on 21 September for the Maldives Waterfront and Marina development at Ras Malé. The proposed development covers about 500 hectares and is expected to operate under a long-term leasehold framework of up to 99 years.

Defending the project, Saeed said the Maldives should pursue investments that are suited to the country’s economic and geographic characteristics as it seeks to diversify its economy.

He said the Maldives could build on its natural environment, hospitality sector and international appeal by expanding into real estate alongside tourism.

“Investment can be increased based on the beauty of the Maldives, its tranquillity and the hospitality for which the country is known,” Saeed said. “From that perspective, real estate is also one of the most suitable sectors for the Maldives to expand.”

The Ras Malé project is planned as a multi-phase development comprising hotels and resorts, branded and premium residences, a marina, waterfront promenades, restaurants, retail outlets, and leisure and wellness facilities.

Saeed said the scale of investment envisaged under the project was comparable to the value of assets accumulated during the Maldives’ 54 years of tourism development.

He said more than 2.2 million tourists now visit the Maldives annually, while the expansion of Velana International Airport is intended to support a target of four to five million visitors in the coming years.

Saeed argued that the Maldives would not be able to achieve developed-country status by 2040 if tourism receipts and economic output continued to grow at their existing pace.

“After 54 years, we have 177 resorts, tourism receipts of USD 5.5 billion and a contribution of USD 1.7 billion to GVA,” Saeed said. “If we maintain those figures at the same level, making the Maldives a developed country by 2040 would be impossible.”

He said the country needed to expand sources of revenue at a faster pace to offset expenditure and meet its development targets.

“That cannot be done without bringing in large projects,” he said.

The government has promoted the Eagle Hills development as one of the largest proposed foreign investments in the Maldives. Current projections for the project include more than USD 30 billion in gross foreign investment over its lifetime, more than 54,000 direct and indirect jobs, over one million additional visitors annually and more than USD 2 billion in annual tourism revenue when the development reaches maturity. These figures are projections rather than realised investment or revenue.

Saeed also responded to criticism of the project, accusing political opponents of seeking to create public concern over the agreement. He claimed opponents were critical because the project’s success could affect their political interests.

The project has faced questions from opposition parties and other critics over the proposed 99-year lease arrangement, the allocation of 500 hectares and the fact that the full Commercial Terms Agreement has not been publicly disclosed.

Saeed said long-term leases were not new to the Maldives, noting that resorts had previously been granted leases of up to 99 years. He said around 54 resorts currently have 99-year leases.

He also rejected claims that the development posed a threat to Maldivian religion or national identity, saying it was intended to create employment and expand the economy.

“These are the kinds of major projects that the Maldives needs to bring in,” Saeed said.

The government has maintained that the Ras Malé land will remain under Maldivian ownership and that the arrangement with Eagle Hills is a lease rather than a sale. President Mohamed Muizzu has also said the project does not involve sovereign guarantees, government loans, tax concessions or duty exemptions.

Attorney General Ahmed Usham has said the parties have so far signed a Commercial Terms Agreement and that further agreements and legislation will be required before the project is implemented.