‘Blue gold’: Maldives’ greatest resource remains underutilized 60 years on

The Maldivian people are a truly fortunate lot – something that perhaps isn’t appreciated enough. The Maldivian people are blessed with the same things that Singaporeans have, except for sincere and capable leaders. This is an island nation of unparalleled natural beauty, where natural disasters are rare and the climate pleasant year-round – a country famous worldwide as “paradise on earth.” Shaped around this, the award-winning tourism industry that the country has built has been a blessing, one that has saved the Maldivian people over and over again. But there is one very obvious blessing that remains underutilized as the country marks 60 years since it regained independence; the strategic location of the country.

Maldives lies on “blue gold.”

The Maldives lies in the middle of one of the busiest shipping routes of the world, one that links the Middle East, East Africa, South Asia, and East Asia. Over 90,000 ships pass through the Indian Ocean each year, carrying around 10 billion tons of cargo and over 36 barrels of oil each day.

The Maldives is well-positioned to take advantage, as world powers vie to exert dominance over global shipping. The country lies in a strategic location of both economic and geopolitical significance.

60 YEARS WASTED

It is regrettable that in the 60 years since the Maldives has enjoyed being an independent and sovereign state, the country hasn’t taken advantage of being located near such a crucial global shipping route. The country’s economy hasn’t generated much revenue from this. The lack of a transshipment harbor or even a proper port in the Maldives is something that other countries are using to their advantage and profiting from. All trade shipments that pass through this region currently go through ports in Sri Lanka, India and Singapore.

The Maldives still does not have a good port. The Male’ Commercial Port does not fit modern standards. It is through utilization of its ports that Singapore, a country that regained its independence nearly simultaneously with the Maldives, has emerged as one of the most developed countries of the world.

During the administration of Ibrahim Nasir, celebrated for his vision, the Maldives created its first shipping line, the Maldives National Shipping Limited (MNSL). It was also during his administration that the Maldives created its tourism industry. The MNSL emerged as one of the strongest shipping lines in the region, boasting a fleet of over 60 ships. It generated a huge profit for the country. But in 1990, during Maumoon Abdul Gayoom’s administration, the company went bankrupt after it accumulated huge debts. This key moneymaker slipped from the hands of the Maldivian people due to mismanagement.

Decades later, in 2020, the Ibrahim Mohamed Solih administration created a new shipping line, the Maldives State Shipping (MSS), and the Maldives re-entered the industry. The shipping line faces massive challenges being a new one. But it is trying to gain a foothold.

The Maldives lacks marine logistics infrastructure.

In 2024, the incumbent Dr. Mohamed Muizzu administration launched a project to offer international bunkering service. However, the current scope of the project leaves much to be desired.

Up until this point, the Maldives did not offer even bunkering services. It still does not offer additional shipping related services such as ship repair services or container services.

This means that while thousands of ships pass through the Maldives each year, it does not benefit the country’s economy in any way.

The Maldives is located in the middle of the Indian Ocean; a strategic area that world powers have always tried to gain influence over. This includes India, an emerging world power that has established strong defense ties with the Maldives. Through this defense partnership, New Delhi sent India-operated military aircrafts, established radar stations, and helped conduct hydrographic surveys.

Meanwhile, India’s biggest rival, China gave massive loans and helped build the Sinamale’ Bridge and run mega housing projects in the Maldives under its Belt and Road initiative.

These are among the biggest infrastructure development projects the Maldives has seen, but it has come at the cost of crippling debt.

Other world powers such as the United Kingdom, the United States and even Australia have also opened embassies in Male’.

But despite the increased geopolitical focus on the Maldives, the country has yet to adopt a clear national strategy that can help it take economic advantage of the situation or play a key role in matters related to the Indian Ocean.

Because Maldives isn’t taking advantage of this, it is other countries who are profiting from it. They are racking up billions of dollars in revenues.

The Maldives has already taken too long to tap into this moneymaker. It cannot be delayed any further.

This is something that shipping experts from other countries have also pointed out.

“As a result of this particular strategic presence, Maldives can give certain major powers … the opportunity to have an influence over the shipping lanes and maritime traffic,” said Amitendu Palit, research lead at the National University of Singapore’s Institute of South Asian Studies (ISAS), in an interview to CNA in October 2024.

There’s a pressing need for the Maldives to establish a deep-sea commercial port to take advantage of its strategic location. The country also needs to increase investments in maritime training institutes and update ocean laws in order to attract global shipping companies.

Mohamed Nasheed, the president of Maldives Association of Yacht Agents (MAYA), believes that what the Maldives needs first and foremost to generate profits from the maritime sector is to develop a high-quality port.

“Millions of tons of meat are getting shipped to the Middle East through Australia, New Zealand and Singapore each year. The Maldives is smack in the middle of these two regions. The Maldives can generate a huge profit just from storing and transiting the shipments that are carried from Australia to the Middle East and vice versa,” said Nasheed.

But developing a good port requires a huge investment and will take years. Nasheed opinions that the Maldives should focus on developing other related facilities while the port gets built, such as establishing lay-up zones, where ships can moor until the next consignment.

Nasheed noted that ships need to pay huge fees if they anchor at ports for lay-up. But if the Maldives establishes designated lay-up zones or even one lay-up zone, the country can generate revenue by charging lower fees but to a huge customer base.

Nasheed believes this is something that the Maldives can immediately start at little investment cost.

“We can designate a specific lagoon with security and surveillance for this. This doesn’t require a port. The ships just need a place to anchor. This will also create additional revenue streams, such as by supplying fuel, water and food that ships need. We can provide crew change services, supply spare parts, offer repair work, and offer waste and waste fuel disposal services. We can also export waste fuel, but we need to take safety measures and adhere to MARPOL standards. The government as well as the people can also generate huge revenue from offering eases in STS service or the transfer of cargo between ships,” he said.

Nasheed, who has over two decades of experience in the maritime sector, also suggests that the Maldives earn money by offering medical care services to crew.

“The Maldives is surrounded by seawater. This is blue gold. The Maldives can take advantage of its location even with medical care. The MNDF is already very responsive to medical emergency related distress calls at sea. This doesn’t have to be limited to emergency situations, Maldives can also be utilized much better than this as a medical care facility in this vast ocean,” he said.

Nasheed believes the Maldives should utilize the Velana International Airport development project

With the Velana International Airport getting a massive upgrade, Nasheed believes the Maldives should expand and consolidate both air cargo and sea cargo.

Ahmed ‘Captain’ Maumoon, the former managing director of MNSL, suggests that establishing designated warehouses to store cargo, can also be a profitable trade for the Maldives. Neighboring India and Sri Lanka already have transshipment warehouses.

“When someone says transit port, we imagine a port with a lot of containers. This is not what our focus should be on. Large companies are looking to distribute goods to Asia. Offering them a good space for warehousing will work. We can even offer this facility to DHL of FedEx. It will be a hit if we can establish a good system for the distribution of goods across Asia here in the Maldives,” he said.

The Maldives is 99 percent water – something that the country must fully utilize. Labelled as “paradise on earth, the island nation attracts over a million tourists each year. Offering new options for tourists who prefer to travel via sea opens a new avenue to boost arrivals.

Nasheed, the president of MAYA, believes Maldives needs a cruise terminal, transit port and marinas to take the Maldivian economy to the next level.

He believes that based on the natural attributes of the country and its geographic location, these are the areas where the Maldives can take maximum advantage from.

“There is huge demand, being located in the middle of such a vast ocean. The Maldives’ geographic location increases the demand,” he said.

Nasheed said that Maldives is in huge demand among cruise liners and superyachts. But they do not travel to the Maldives because of the lack of a port and lack of availability of other services they need.

The few cruise liners that do travel to the Maldives carry thousands of tourists to the country. These cruise liners anchor off the Maldivian capital, and need to hire ferries so that the tourists can disembark to Male’ or other islands. The capital city does not offer the services they need, and nor does it have a designated area for tourists to disembark from cruise liners. This also creates security concerns.

As a result, many cruise liners choose to travel to countries such as Sri Lanka and India, instead.

Most of the tourists who visit the Maldives travel to the country via air. But tourist arrivals via sea is a profitable segment that the country needs to focus on. Neighboring Sri Lanka and India both have designated terminals for cruise liners. These facilities offer disembarkation services, which they generate a huge revenue from.

A project to develop a cruise terminal is part of the masterplan for Hulhumale’. But the project was never initiated. And, during the Solih administration, the area allocated for the project was repurposed to reclaim land to provide housing to Male’ residents just ahead of the 2023 presidential election.

According to Nasheed, another reason why large vessels hesitate to travel to Maldives is because a large part of its seas is unchartered.

Getting this done will attract a lot more ships, he said.

EMPTY PROMISES

The idea of developing a transshipment port in northern Maldives is something that has been floated around by government officials since the Maumoon administration. But the 30-year administration ended without getting it done. The administration of Abdulla Yameen Abdul Gayoom announced the Ihavandhippolhu or ‘iHaven’ project. But not much actual work was done. The Solih administration that succeeded it pledged to continue the project. It also announced other similar projects. But failed to produce tangible results. And while incumbent Muizzu administration has managed to actually launched bunkering services, the scope of it fails to reach anywhere close expectations.

This begs the question: why has the Maldives failed to get this done, despite having existed as an independent state for so long? It might be an issue of lack of vision of Maldivian leaders. It might also be because government officials get waylaid due to different influences or the tantalizing promise of cutbacks.

“Attempts were made to build a transshipment port by all Maldivian administrations. But trading companies from Sri Lanka, India and Singapore came and lobbied against it using different methods, preventing it from making any headway,” said Umar Naseer, who served as home minister in the Yameen administration.

In a world where one country’s progress as perceived as a threat to the security of another, getting things done requires brave leaders. Ones with vision. It requires leaders who reject bribes and prioritize national interests above all. Perhaps it is a lack of such leaders that Maldives has failed to achieve what Singapore. As a consequence, one of the greatest resources the Maldives has, its “blue” gold”, remains sorely underutilized. The country needs to utilize this in order to get to the next level.