Global Facilitation Network for Security Sector Reform (GFN-SSR)

Statement by His Excellency Mr. Ahmed Khaleel, Permanent Representative of the Republic of Maldives to the United Nations at the UN Conference on Financial and Economic Crisis and its impact on development

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What has been the impact of the current economic and financial crisis on countries such as the Maldives? This article is a transcript of a speech by Dr Ahmed Kahleel, Permanent Representative of the Republic of Maldives to the United Nations, to the UN Conference on Financial and Economic Crisis and its Impact on Development, held on 24 – 26 June 2009. He argues that the Maldives needs urgent assistance from the international community to stabilise the situation and jump-start the country’s economy.

The Maldives is a Small Island Developing State (SIDS) and currently on the UN’s list of Least Developed Countries (LDCs). For the past two decades, the Maldives has experienced rapid socio-economic development and was on track to achieve its Millennium Development Goals. The country has also successfully promoted political and human rights reforms, introduced a new constitution, and held multiparty Presidential elections. In 2010 the country is scheduled to graduate to Medium Income Developing Country (MIDC) status.

However, the country still has serious social problems including inadequate housing, lack of modern transportation systems, substance abuse and fiscal challenges. The economic crisis has inhibited the government’s attempts to tackle these problems.

• The Asian Tsunami, food and fuel crisis, and now the economic and financial crisis have led a shortage of foreign currency, price hikes in primary commodities, and the withdrawal of private capital flows and foreign investment.
• The Maldives does not have the necessary fiscal capacity and institutional arrangements to counter the fallout from the crisis. The government has little or no foreign reserves at its disposal.
• The only means of funding domestic expenditure is through borrowing and foreign grants. Therefore the financial crisis has the potential to further aggravate the country’s public debt burden.

Without appropriate immediate and long term remedial measures, the crisis has the potential to unravel the modest achievements that the Maldives has made over the past decades and seriously compromise the country’s development aspirations.

• The Maldives needs urgent assistance from the international community to stabilise the situation and jump-start the country’s economy.
• The Maldives also needs understanding and cooperation of stakeholders as the country adapts to the changing climatic conditions that threaten the survival of the country.

Furthermore, graduating from LDC status will not change the inherent and structural vulnerabilities of the Maldives as an SIDS.

• LDCs receive special attention from the UN and SIDSs do not. As a result, SIDSs that are classified as MIDCs are disadvantaged, and SIDS that are currently LDCs are reluctant to graduate, as they would lose assistance they currently receive.
• The Maldives therefore intends to work with colleagues to improve the SIDS category at an operational level

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