In a manner of speech Maldives earns dollars in 2 ways. 1st is of course through tourism and 2nd is through selling fisheries products. Both of these two industries are connected by sea which is abundant, roughly 90% of our country is sea.
There are a few more ways for dollars to leave the country than to arrive in to the country and they are
1) Import bills:
in Maldives everything is imported so our import bills are big (in a relative way).
2) Outbound tourism to India, Sri Lanka, Malaysia etc. Of this outbound tourism, a large portion of the ‘outbound tourists’ are in fact visiting these above said countries to seek better medical facilities unavailable in Maldives.
3) Then there are the unsubstantiated rumors and allegations of mismanagement of funds by the former regime (which is common knowledge in the process of being proven in court) the amounts of which are unknown and possibly will be higher than the first two points mentioned.
How bad the dollar crisis situation can be understood from the fact that although In some resorts the wages are paid in dollars to the staff and the monies are deposited in banks and yet the bank would refuse to release the dollars when demanded by the account holder. Its ironic and yet happens many times and is a constant fight between the bank and the account holders. This is more so a case of Bank of Maldives issues than other banks and those who can afford to bank with HSBC are switching from Bank of Maldives for this reason.
The government seems to be aware of this problem and just yesterday the police had to raid the Bank of Maldives to confiscate some documents relating to bad loans given by the bank to the former regime’s henchmen. The police is very diplomatic in this process and has revealed that they had tried all means possible to get the bank to handover the documents even seeking the help of Central Bank (Maldives Monetary Authority) to no avail. Dwelling on these same lines, the office of the president released a writ saying the president is concerned about the bad loans of Bank of Maldives which tops 1000 000 000 Rufiyas and urged the courts to help rather than hinder this work.
Summing up, this is more a question of where the dollars went rather than where the dollar goes. The dollars (a large crowd of them) went those who were close to the former regime and the president (Anni) in his first days in office even said that large sums of foreign currencies are held by some individuals ( a reference to former regime cronies). As for the question of where the dollars go, the other two factors seems to be the best answer. Decades of closed door politics stifled economic growth which did not create sustainable agriculture (or anything for that matter) which makes us dependent on daily necessities hence our big import bill. Favoritism and protectionism turned away many an offer of foreign investment in the medical sector which could have gone someways to help the already suffering from taking long journey’s to foreign countries seeking medical help. One good example of this was the time when the then government hastily tried to award a contract to an otherwise unknown foreign insurance company which has links to a former president’s son. Fortunately for some reasons (the reformist Trade minister Gasim may be one) the deal did not went through. The same con was about to be played on the issue of drug rehabilitation program with the same persons involved and again it did not go through. Had these scams gone through and were implemented, we would have been in deeper waters of financial trouble today than we could imagine.