Parliament rejects motion urging govt support to tourism businesses struggling from Middle East war

The ruling People’s National Congress (PNC) used its supermajority on Tuesday to reject an emergency motion submitted by the main opposition Maldivian Democratic Party (MDP), calling on the Parliament to discuss measures the government can take to support tourism businesses mitigate the impact of the war in the Middle East.

The motion, submitted by Kendhoo MP Mauroof Zakir, expresses concern over how the US-Israeli war on Iran has disrupted travel, resulting in a dip in tourist arrivals, and a sharp drop in revenue generated by tourism businesses.

Citing Tourism Ministry statistics, Mauroof said that since the onset of the war, daily arrivals have dropped from 7,000 to between 5,000 and 4,000, with around 2,000 booking cancellations each day.

He said that this has resulting in a 21 percent drop in arrivals.

Mauroof said the drop in arrivals has resulted in financial challenges to resorts and guesthouses, affecting the salaries of tourism sector workers.

He also cited Asian Development Bank (ADB) forecast that the Maldives’ economic growth will drop from 5.4 percent last year to just 1 percent this year due to the impact of the Middle East war on fuel prices and the tourism sector.

Mauroof said he therefore believes it crucial for the government to provide concessions to tourism sector businesses, and take measures especially to help improve cashflow, in order to mitigate the potential long-term impacts on the Maldivian economy.

He recommended that the government take six key measures. They are:

• Implement a working capital loan scheme or introduce an income support allowance to provide financial support needed for businesses to cover the payroll and develop
• Implement policies such as interest-free moratorium loans
• Make issuance of soft loans from Bank of Maldives (BML) and other financial institutions quicker and more flexible, increase repayment period on loans, and offer a grace period of one to two years
• Introduce utility subsidies for tourism sector businesses, and offer relief on expenditure of electricity and fuel
• Temporarily lower tourism land rent, airport charges, licensing fees, and other such charges
• Offer deferral on TGST, corporate income tax, and other such taxes

Mauroof asked that the Parliament discuss these measures.

However, the motion was rejected with a majority vote of 33-8.

The US-Israeli war on Iran led to the partial closure of air corridors in the Middle East – key transit hubs for tourists – leading to the cancellation of hundreds of flights to the Maldives. Several airlines have since resumed operations following the ceasefire agreement.