The World Bank’s board of executive directors, on Tuesday, approved a USD 12.8 million (MVR 197.38 million) COVID-19 emergency income support project to assist Maldives mitigate the economic impact of the coronavirus crisis on poor and vulnerable workers and their families.
According to a statement released by the World Bank, the project will largely finance the Maldivian government’s income support allowance scheme – which provides a temporary monthly allowance of up to MVR 5,000 to workers who have lost their jobs or income due to the coronavirus pandemic.
“This will give a lifeline to struggling families and enable them to stay at home, preventing further spread of the virus, especially within the congested capital,” said the World Bank in its statement.
The Maldivian economy is heavily dependent on tourism, and the drastic fall in tourism revenues and the restrictive measures imposed to curb the spread of coronavirus in the country has resulted in loss of jobs and income sources – dealing a severe blow to low-income households.
‘This project will support the government’s efforts to deliver cash transfers and food benefits directly to those who need them the most. The project will also strengthen the country’s social welfare system to improve its preparedness for future crises,” said Idah Z. Pswarayi-Riddihough, World Bank Coutry Director for Maldives, Nepal and Sri Lanka.
The project, in addition to strengthening the Maldivian government’s capacity to distribute allowance and other cash transfers, will also allow the enhancement of administrative systems to give local councils a greater role in helping people across the country gain access to support.
It will involve the formulation and launch of a new unemployment insurance program, along with a far-reaching national social protection framework to help soften the blow on both employers and employees in future emergencies.
It will also involve the review of retirement pension scheme and other similar programs.
“The current crisis shows the importance of having a safety net for all Maldivians, to prevent people from falling into poverty when times get tough,” said Thomas Walker, Senior Economist and Task Team Leader. “This project will help to build fiscally sustainable social protection programs that can reach any Maldivians who need help.”
The World Bank has also approved a fast track package of USD 7.3 million to help Maldives prevent, detect and respond to the coronavirus pandemic and strengthen its public health preparedness, and has made available an additional USD 10 million contingency financing under Disaster Risk Management Development Policy Financing and a Catastrophe Deferred Drawdown Option (CAT DDO) signed between Maldives and World Bank in 2019, to support the Maldivian government’s efforts to mitigate the economic and financial impact of the pandemic.