Singapore, Oct 5 (UNI) Asian Development Bank (ADB) is extending 34 million dollars in loans and three million dollars in grants to help the Maldives achieve middle-income economy status.
Manila-based ADB has entered into a five-year Country Partnership Strategy (CPS) with the island state. ''The Maldives faces many of the constraints of a small-island economy. Its vulnerability to external shocks was exposed by the 2004 tsunami, which destroyed nearly two-thirds of the country's capital stock,'' said Yukiko Kojima, Country Director-Maldives of ADB's South Asia department.
An assessment of the damages inflicted by the tsunami by ADB, World Bank and United Nations System estimated total damage suffered by the country to have reached 470 million dollars, or 62 per cent of GDP.
Prior to the tsunami, which pushed back the graduation of Maldives into a middle-income country by seven years to January 2011, rapid economic growth allowed the country to provide basic services and boost the living standards of its people, noted the ADB.
But it also masked the need to address longstanding constraints to broad-based, sustainable socio-economic development. Such constraints include the Maldives' narrow economic base, a government-dominated economy, low participation rate in the labour force, inequality, weak public institutions, and lax fiscal policy.
''As the country approaches a middle-income status, it can no longer afford to neglect these accumulated constraints,'' said Ms Kojima.