Human Capital Review Unleashing People’s Full Potential November 2023 Human Capital Review Unleashing People’s Full Potential November 2023 © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Disclaimer This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover Photos ©trentemoller/Shutterstock, ©Paiboon Chooklin/Shutterstock Photos ©Shutterstock Designing Ricardo Echecopar i Table of Contents Acknowledgements iv Abbreviations vi Executive Summary 1 Chapter 1: Human Capital as the Key to Long-Term Economic Growth and Prosperity 9 1.1. Country context 9 1.2. Human capital for sustainable & inclusive development 13 1.3. World Bank Human Capital Project (HCP) 14 Chapter 2: Calculating the First HCI Score for the Maldives at the National and Subnational Levels 17 2.1. Maldives’ HCI performance in the global context 18 2.2. Maldives’ HCI scores at the subnational level 24 2.3. Understanding the regional HCI components 29 2.3.1. Survival 29 2.3.2. Health 30 2.3.3. Education 32 2.4. Utilization-adjusted HCI at the subnational level 36 Chapter 3: Challenges and Drivers of Human Capital Accumulation across the Life Cycle 39 3.1 Human capital challenges and drivers during the early childhood stage (conception to 5) 42 3.2 Human capital challenges and drivers during childhood stage (ages 6-12) 49 3.3 Human capital challenges and drivers during adolescence and youth stage (13-18) 51 3.4 Adulthood stage (19 and older) and implications of the demographic transition 58 Chapter 4: Overview of the Education, Health and Social Protection Sectors 65 4.1 The importance of service delivery for human capital accumulation and utilization 65 4.2 Overview of the education sector 66 4.2.1. Financing 66 4.2.2. Institutions 67 ii Maldives Human Capital Review Unleashing People’s Full Potential 4.2.3. Strategies and programs 71 4.2.4. Efficiency of the education system and transition to the labor market 74 4.3 Overview of the health sector 75 4.3.1 Health financing 77 4.3.2 Institutions and health service delivery system 80 4.3.3 Efficiency in health spending 81 4.3.4 Health strategy and policies 82 4.4 Overview of the social protection sector 82 4.4.1 Financing social protection expenditures 84 4.4.2 Institutions 85 4.4.3 Government strategy and approach 86 4.4.4 Programs and services 86 4.4.5 Efficiencies in the social protection system 90 Chapter 5: Shocks That Threaten Human Capital in the Maldives 93 5.1 The impact of COVID-19 pandemic and lessons learned 95 5.2 COVID-19 and human development 96 5.3 Climate shocks impacting human capital gains in the Maldives 99 5.3.1 Food security 101 5.3.2 Education 102 5.3.3 Health 103 5.3.4 Livelihoods 104 5.4 Climate change and impacts on at-risk populations 105 5.4.1 Domestic and foreign migrants 105 5.4.2 Women 105 5.4.3 Persons with disabilities 106 5.4.4 Children 106 5.5 Responses to date 106 Chapter 6: Conclusions and Recommendations 109 6.1 At the national level 109 6.2 Sector-specific recommendations 111 6.2.1 Education 111 6.2.2 Health 111 6.2.3 Social protection 112 List of References 114 iii Acknowledgements This document was prepared by a core team from the Human Development Department of the South Asia Region (SAR). The drafting of the report was led by Rene Leon Solano (Lead Economist, Human Development Program Leader, HECDR). Core contributors include Adea Kryeziu (Social Protection Specialist and chapter 1 lead, SPGE); Maya Sherpa (Senior Economist and chapters 2 and 4 co-lead, HSAED); Rania Atieh (Senior Social Protection Consultant and chapter 2 co-lead and chapter 3 lead, HMNSP); Khalil Wehbi (Human Development Consultant and chapter 5 lead, HMNSP); Di Dong (Senior Health Economist and chapter 4 co-lead), Jyoti Maya Pandey (Senior Social Protection Specialist and chapter 4 co-lead, HSASP); Yi Zhang (Health Economist); Nuoya Wu (Health Consultant); and Thisuri Jinadhi Wanniarachchi (Extended Term Consultant HSASP). Erdem Atas (Economist, ESAC1) provided and validated country data and information at the local level. Shadiya Adam (Board Operations Officer) and Anita Lakshmi Fernando (Program Assistant) provided support throughout the task implementation. The document also benefited from the overall guidance, advise and insights from Lynne D. Sherburne-Benz (Regional Director, HSADR), Faris H. Hadad-Zervos (Country Director, SACNP), Nicole Klingen (Regional Director, HSADR), Keiko Inoue (Practice Manager, HSAED), Trina S. Haque (Practice Manager, HAWH3), Stefano Paternostro (Adviser, HSADR) and Chiyo Kanda (Country Manager, SACSL). Peer review contributions which greatly enriched the report were provided by Pablo Ariel Acosta (Lead Economist, HSPGE), Hebatalla Elgazzar (Program Leader, HAWDR), Igor Kheyfets (Senior Economist, HLCED), Thomas Walker (Lead Economist, Program Leader, HEADR), Janssen Edelweiss Nunes Teixeira (Senior Education Specialist, HEAED), and Kari Hurt (Senior Operations Officer – Health, HEAHN). Additional valuable comments and contributions were made by D. H. C. Aturupane (Lead Economist, HASED), German Daniel Caruso (Senior Economist, HHCDR), Michael Weber (Senior Economist, HHCDR), Emi Suzuki (Demographer, DECID), Ritika Dsouza (Economist, GGHCE), Syedah Aroob Iqbal (Research Analyst, HECED), Amit Jain (Senior Energy Specialist, ISAE1), Jerome Bezzina (Senior Digital Development Specialist, IDD06), Winnie Wang (Senior Transport Specialist, ITRGK), Peter Mousley (Lead Private Sector Specialist, ESAF1), Suhail Kassim (Senior Economist, ESAF1), Amila Indeewari Dahanayake (Economist, ESAF1), Namoos Zaheer (Senior Financial Sector Specialist, ESAF1), Ruijie Cheng (Young Professional, ESAC1), Sonya Sultan (Lead Social Development Specialist, SSIDR), Martin Heger (Senior Environmental Economist, SSAEN). We would also like to particularly thank the Ministry of Finance for overall guidance and coordination, the Ministry of Education for its leadership on data collection efforts as well as the Maldives Bureau of Statistics and the Maldives Department for National Registration for providing necessary data and related analysis. Finally, the team is indebted to the Ministry of Health, the Ministry of Economic Development, the Ministry of Gender, Family and Social Services, the Ministry of Environment and Technology, and the National Social Protection Agency for their invaluable input and feedback throughout the HCR drafting process. Abbreviations ADB Asian Development Bank ADPC Asian Disaster Preparedness Center BTEC Business and Technology Education Council CEDAW Convention on the Elimination of all Forms of Discrimination Against Women COVID Coronavirus disease DALYs Disability-Adjusted Life Years DHS (Maldives) Demographic and Health Survey ECD Early Childhood Development (Program) ESC Employment Sector Council EYS Expected Years of Schooling FAO Food and Agriculture Organization FDI Foreign Direct Investment FPA Family Protection Authority GBV Gender-Based Violence GCE General Certificate of Education GDP Gross Domestic Product GER Gross Enrollment Ratio GoM Government of Maldives HIES Household Income and Expenditure Survey HLOs Harmonized Learning Outcomes HCI Human Capital Index HCP Human Capital Project HRCM Human Rights Commission of Maldives HTS Harmonized Test Scores IFAD International Fund for Agricultural Development IFRC International Federation of Red Cross and Red Crescent Societies IGCSE General Certificate of Secondary Education IGMH Indira Gandhi Memorial Hospital ILO International Labour Organization ICT Information and Communications Technology ICU Intensive Care Unit LAYS Learning-Adjusted Years of Schooling MCCPF Maldives Climate Change Policy Framework MDG Millennium Development Goal MDP Multidimensional Poverty MED Ministry of Economic Development MEMIS Maldives Education Management System MFDA Maldives Food and Drug Authority MGFSS Ministry of Gender, Family and Social Services MNQF Maldives National Qualifications Framework MNSDA Maldives National Skills Development Authority MOE Ministry of Education MoGFSS Ministry of Gender, Family and Social Services MOH Ministry of Health MOHF Maldives Ministry of Health and Family MPAO Maldives Pension Administration Office MQA Maldives Qualifications Authority MRPS Maldives Retirement Pension Scheme MVR Maldivian Rufiyaa NALO National Assessment of Learning Outcomes NAR Net Attendance Ratio NCDs Noncommunicable Diseases NDMP National Disaster Management Plan NER Net Enrollment Rate NGO Nongovernmental Organization NIC National Integrity Commission NIEHS National Institute for Environmental Health Sciences NSPA National Social Protection Agency OCO Children’s Ombudsperson's Office OOP Out-Of-Pocket OOSC Out-Of-School Children OPHI Oxford Poverty and Human Development Initiative PWD People With Disability PEFA Public Expenditure and Financial Accountability PER Public Expenditure Review PMT Proxy Means Test PPG Public and Publicly Guaranteed PSIP Public Sector Investment Program SAP (Maldives) Strategic Action Plan SAR South Asia Region SIDS Small Island Developing States SME Small or Medium Organization SSC Senior Secondary Certificate SDG Sustainable Development Goal SNAP Strategic National Action Plan SRH Sexual and Reproductive Health STO State Trading Organization STR Student–Teacher Ratio TIMSS Trends in International Mathematics and Science Study TVET Technical and Vocational Education and Training UHCI Utilization-adjusted Human Capital Index UMIC Upper-Middle Income Country UNESCO United Nations Educational, Scientific and Cultural Organization UNCTAD United Nations Conference on Trade and Development UNFCCC United Nations Framework Convention on Climate Change UN-IGME UN Inter-agency Group for Child Mortality Estimation UNFPA United Nations Population Fund UNICEF United Nations Childrens Fund WAP Working-Age Population WDI World Development Indicators WFP World Food Programme y-o-y Year-On-Year Source: ©pisaphotography/Shutterstock Executive Summary In the decade leading up to the COVID-19 Through a combination of stable economic pandemic, Maldives—an upper-middle growth, poverty reduction, and investment in income country (UMIC) of 515,1221 people the social sectors, Maldives has significantly dispersed across 185 islands in 27 atolls in improved its human development outcomes. the north-central Indian Ocean2 —sustained Between 1995 and 2021, the country’s Human stable and rapid economic growth, which Development Index score increased by more contributed to poverty reduction in the than a third, from 0.555 to 0.747, and its country. Between 2011 and 2021, Maldives ranking among the 191 countries on the index averaged economic growth of 6.45 percent, improved from 97th to 90th. The development ranging from a high of 8.6 percent in 2011 to of the tourism sector created sizable revenues a low of 2.5 percent in 2012. That growth was that were used to support, among other things, spurred by the country’s rich and diverse marine the provision of public and social services. ecological system, which in turn facilitated the Certainly, Maldives has spent generously development of a thriving, high-end tourism on social sectors. From 2014–2021, the sector. As a result, Maldives performs well on government spent an average of 42 percent poverty outcomes compared to its regional, of its annual budget on three social sectors: income, and small-island peers. In 2019, just health (14 percent), social protection (15 3.9 percent of the population lived below the percent), and education (13 percent), which international poverty line for UMICs of US$6.85/ together accounted for roughly 14 percent of person/day, more than 90 percent of whom were annual GDP (World Bank 2022d). concentrated in the atolls (World Bank 2022d). Following a strong post-COVID-19 recovery, However, the economy remains heavily and under continued growth projections, it is dependent on tourism, making the country estimated that the poverty rate will decrease to highly vulnerable to shocks, with important 2.1 percent in 2023 (World Bank 2020). implications for human development. 1 According to the Maldives 2022 Census, the Maldives has a population of 515,122: 382,751 native residents, and 132,371 foreigners. 2 An atoll is a ring-shaped island, or chain or islands, formed out of coral, with a lagoon enclosed in the middle of the ring. 1 Limited economic diversification renders two biggest economic sectors in the country, Maldives highly vulnerable to shocks, as tourism and fisheries, are highly dependent borne out by the COVID-19 pandemic. With on a stable and favorable climate and a robust tourism and related services accounting for natural environment. They are thus very likely 40 percent of the economy, 80 percent of to come under pressure from sea-level rise, exports, and half of total revenues (Hadad- temperature extremes, and changes to the Zervos 2022), the pandemic exposed the consumer decisions and preferences of economy’s vulnerability to shocks. Maldives the global tourism sector, with far-reaching was the hardest-hit economy in South Asia, implications for overall human development. experiencing an unprecedented decline of 34 percent of its GDP in 2020 (Hadad- This report is undertaken as a part of the Zervos 2022). Nevertheless, bolstered Human Capital Project (HCP), a global by a rebound in tourism, relatively good initiative of the World Bank Group that public service delivery systems, and crisis aims to increase governments’ awareness preparedness, the economy recovered of the importance of investing in people quickly in 2021. Ultimately, COVID’s impact (World Bank n.d.b). One of the main highlighted the vital need for greater components of the HCP is a cross-country economic diversification, which remains a metric—the Human Capital Index (HCI). The structural challenge for the Maldives because HCI estimates the amount of human capital a tourism-led growth is accompanied by high child born today can expect to accumulate by levels of public indebtedness, which further the age of 18, thus highlighting how current constrains the country’s fiscal space (World health and education outcomes shape the Bank 2022c). work productivity of the next generation. Moreover, given the cumulative nature of Relatedly, climate change poses a human capital, the HCI has clear milestones compounding and existential threat across the entire human life cycle: at birth, to human development progress and children need to survive; during childhood, the Maldivian economy overall. Climate they need to be well-nourished; at school age, change threatens health, livelihoods, and they must complete all schooling and active education, with vulnerable groups being the adequate learning levels; and in adulthood, most affected. At-risk populations, including they need to stay in good health. Finally, the migrants, women, persons with disabilities, HCI includes a result: a score that ranges and children, face systemic barriers and from 0 to 1.  A  country where an average heightened risks due to climate change. child has virtually no risk of being stunted or Food security remains vulnerable to extreme dying before age five, receives high-quality weather events, with the island’s limited education, and becomes a healthy adult, storage facilities and potential disruptions in would have an HCI close to 1. Conversely, transport. Climate change events affect the when the risk of being ill-nourished or education sector through damage to school prematurely dying is high, access to education infrastructure and roads, which limits access is limited, and the quality of learning is low, to schools and increases dropout rates. the HCI would approach zero. Health risks include heat-related illnesses, undernutrition, infectious diseases, air pollution, and food spoilage. Additionally, the 2 Maldives Human Capital Review Unleashing People’s Full Potential Figure ES1: Human Capital Index (HCI) calculation = x x Productivity of Survival School Health future worker Will children How much Will they leave Relative to born today school will they school in good benchmark of survive to complete and health, ready for complete school age? how much will further learning education and they learn? and/or work? full health Indicator 1 Indicator 2 Indicator 4 Under 5 Expected Years Under 5 mortality of Schooling stunting rate Indicator 3 Indicator 5 Harmonized Adult survival Test Scores rate Source: Authors’ interpretation based on the World Bank Human Capital Project (World Bank n.d.b) The main objective of this report is to support overall HCI score. In February 2023, and with the Government of the Maldives to calculate the support of the World Bank, Maldives was its first HCI score, both at the national and able to report the necessary learning outcome subnational levels. Figure ES1 above illustrates data, enabling the calculation of the missing how the HCI is measured by means of three indicator and, consequently, the HCI score at components: (a) survival—a measure of the both the national and subnational levels.3 likelihood that a child will survive from birth to school age (age 5); (b) school—a measure of the Moreover, this report also calculates the quantity and quality of education; and (c)  two first utilization adjusted HCI (UHCI) score broad measures of health—child stunting rates for Maldives at the national and subnational and adult survival rates. Prior to 2021, Maldives levels, which scales down the HCI by taking into lacked internationally comparable data on account overall employment rates. The UHCI learning outcomes, precluding the calculation essentially reveals the existing gaps between of the indicator on harmonized test scores accumulated human capital and utilized human (under the school component), and of the capital in the labor market, and by doing so, 3 Because post-COVID data were used for some of the indicators, in particular, quality of education, the World Bank Human Capital Project will release a new score in 2024 that takes into account COVID-19 data considerations and aligns countries’ results for better and more realistic comparisons. 3 prompting countries to better use available skills today can be expected to achieve 12.4 years of and experience of workers toward increased education, an average higher than that of South labor productivity and economic growth. To Asia (10.8 years), small island nations (11.4) and complement the HCI and UHCI calculations, the upper-middle-income countries (11.8). However, report incorporates a more in-depth analysis important challenges remain in terms of quality of the drivers of, and challenges in, building of education, measured by the learning-adjusted and utilizing human capital along the life cycle. years of schooling (LAYS). At the national level, In addition, the report provides an overview of after adjusting for quality of learning, a Maldivian the country’s social sectors and a look at the born today can be expected to achieve only shocks that could threaten both human capital 8.17  years of schooling—a loss of 4.32 years. accumulation and utilization in the country. This is greater than UMICs (loss of 4 years of schooling) or small island states (4.1 years) and Maldives’ first national HCI score (0.596) is on par with South Asia (4.3 years). indicates that a Maldivian child born today is expected, on average, to be only 60 percent Second, and despite high survival rates, the as productive as he or she could be with stunting4 rate of children under 5 remains complete education and health. In other relatively high. Only 85 percent of children below words, the Maldives is losing 40 percent of its 5 are not stunted. This is better than the average for future productivity. Nevertheless, in a global South Asia (69 percent) but below Maldives’ other context, Maldives performs relatively well, comparators (i.e., UMICs at 87 percent). Stunting, scoring higher than its regional (HCI 0.48), which is linked to poor nutrition, water, and small-island nation (HCI 0.52) and income- sanitation, is irreversible after the first 1,000 days group comparators (HCI 0.56). of life. It is considered the biggest impediment to a child reaching his or her potential and to a Maldives’ relatively high HCI score is driven country’s socioeconomic development. Children largely by impressive health outcomes. The who are stunted are at greater risk of illness and country shows strong performance on adult death, impaired cognitive development, and poor survival rates, with a 95 percent probability of school performance. Stunted children carry their an adult surviving to age 60, which is above inhibited physical and cognitive development into the average for all comparators. Maldives also adulthood, later translating into lower productivity does equally well on the probability of children and earning capacity. Evidence suggests that a surviving to age 5, with 99 percent of children reduction in stunting rates of 10 percentage points expected to reach this age. This is well above increases attained adult height by approximately the average for South Asia and for small island one centimeter and, therefore, increases future nations, and on par with UMICs, indicating productivity by 3.5 percent. relatively good maternal and child health. Thirdly, when adjusted for human capital Nevertheless, significant improvements are utilization, the Maldives’ HCI performance required for the country to fulfil its full human drops significantly, indicating untapped capital potential, particularly in relation to human capital wealth and an opportunity quality of education, Maldives’ most important loss of potential national growth. Maldives’ human capital challenge. A Maldivian born UHCI score is 0.366, compared to its impressive 4 Stunting measures the share of children who are unusually small for their age. It is broadly accepted as a proxy for the prenatal, infant, and early childhood health environment, and it summarizes the risks to good health that children are likely to experience in their early years—with important consequences for health and wellbeing in adulthood. 4 Maldives Human Capital Review Unleashing People’s Full Potential UHCI score is 0.366, compared to its impressive Finally, although Maldivian women are HCI score of 0.596. This means that Maldivian predicted to reach working age with children born today are predicted to be only marginally higher levels of human capital 37  percent as productive in adulthood as they (HCI 0.6) than men (HCI 0.59), this slight could have been if they had access to full education advantage is eroded when employment levels and health and they became fully employed are considered. Indeed, females’ UHCI score adults. In other words, Maldives loses almost 23 of 0.28 represents a 32-percentage point drop percentage points of its potential productivity in their HCI score, compared to males’ UHCI when Maldivians reach the labor market. At the score of 0.47, which represents a much smaller individual and household levels, underutilization drop of 12 percentage points in their HCI score. of human capital translates into low productivity, This suggests that women in the Maldives loss of earnings and low household resilience face significant barriers to their labor market to shocks. At the national level, it translates into participation, which leaves the Maldives with forgone economic growth and fiscal imbalances. enormous untapped potential. Figure ES2: Maldives’ regional HCI: an illustrative map Haa Alif North Region .57 Haa Dhaalu Shaviyani North .58 Noonu Raa Central Lhaviyani Baa Region Kaafu .64 Alif Alif Malé .54 Malé Central Alif Dhaal Region Region Vaavu Faafu Meemu Dhaalu .58 South Thaa Central Region Laamu Gaafu Alif Gaafu Dhaalu .58 South Region Gnaviyani Seenu Source: Author’s illustration of regional divisions in Maldives using a World Bank image On the other hand, Maldives’ aggregate EYS is adjusted for quality of learning. Indeed, national HCI score (0.596) conceals it is worth noting that when EYS is adjusted for significant regional disparities in human quality of learning, children born outside Malé capital accumulation (figure ES2). The are predicted to have an average LAYs that is subnational HCI calculations reveal that a child below that of the national average (8.26). born in Malé today is expected to achieve 64 percent of her full potential by age 18, in Second, stunting levels show important comparison, for example, to a child born in the regional variations. Most regions have ratios Central Region (54 percent of her potential). of non-stunted children that are above the This means that a child in Malé is expected national ratio of 84 percent, but the North and to be 10 percent more productive by the time the North-Central regions have particularly he/she reaches 18 years of age than a child high stunting rates, weighing down the national born in the Central Region. Malé’s HCI score ratio. This could be explained by the fact that is also four percentage points above the both regions are home to the highest number national score (0.596), practically lifting the of children and the highest concentration of national score, while the HCI of all the other the poor. As a result of their higher stunting regions fall below the national rate. Based on rates, and based on empirical evidence, the regional distribution of children ages 0–19, children born in the North and the North- approximately 60 percent of all children in the Central Regions can expect to be 1.47 percent Maldives are predicted to be less productive by and 1.59 percent, respectively, less productive the time they reach 18 than what the national than what the national average would predict average otherwise predicts. (HCI of .596) when they reach the age of 18 (World Bank 2020b).5 The high levels of inequality at the regional level are driven primarily by relatively poor Additionally, despite their slightly superior education outcomes. Significant regional HCI scores across the country, females in disparities exist with respect to expected all six regions fare considerably poorer than EYS. For example, Children in Malé (EYS of males in human capital utilization. Females’ 13.1  years) are predicted to attain two more UHCI score in all regions experiences a years of schooling than children in the Central sharp drop when adjusted to labor utilization. Region (EYS of 11.1 years). Based on empirical The HCI–UHCI differential ranges from a literature, whereby an additional year of learning disconcerting 31.51 percentage points in raises earnings by about 8 percent, a child the South-Central Region to an even greater born in Malé today is expected to generate drop of 38.04 percentage points in the South 16 percent greater earnings as a future worker Region. Females, in short, constitute a grave than one born in the Central Region (World Bank opportunity loss of national wealth yet to be 2020b). In addition, the EYS gap between Malé utilized in the Maldives. and most other regions widens even further when adjusting for quality of learning. For Recognizing the cumulative nature of example, the 0.72 EYS gap between Malé and human capital, the report goes beyond the the South-Central Region increases to 1.3 when standard HCI indicators to look more closely 5 “Evidence suggests that a reduction in stunting rates of 10 percentage points increases attained adult height by approximately one centimeter, which increases productivity by (10.2 × 0.1 × 3.4) percent, or 3.5 percent” (World Bank, The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19 (Washington, DC: World Bank, 2020), http://hdl.handle.net/10986/34432). 6 Maldives Human Capital Review Unleashing People’s Full Potential at the drivers of, and challenges to, building (i) address persistent geographic disparities human capital along the life cycle. During in access to education; (ii) focus on improving early childhood (0–5 years), malnutrition in the quality of education for all; (iii)  tackle the forms other than stunting, such as anemia and relatively high levels of stunting, with a focus wasting, also impact human capital formation on those regions with the worst outcomes; in the Maldives. In 2017, almost 15 percent of and (iv) promote better employment outcomes Maldivian children under 5 were underweight, for Maldivian women. At the same time, a rate significantly higher than UMICs Maldives ought to: (v) increase the efficiency (1.8  percent). Access to healthy nutrient- and effectiveness of social sector spending to rich foods and knowledge of healthy feeding enable people to obtain good-quality education, practices are probable drivers, among others, maintain good health, find good jobs, and secure of malnutrition among Maldivian children. access to comprehensive social protection that The availability and prices of essential food enables them to be resilient against shocks of items are especially affected by the impacts various kinds. of climate change, the challenges of sea transport, and interruptions in international With this in mind, this report is structured supply chains. Inequality in access to upper as follows: Chapter 1 introduces human secondary education, in addition to disparities capital as the key to long term economic in the quality of education, poses the greatest growth and prosperity. Chapter 2 explains threat to human capital accumulation among the first HCI score calculation for Maldives, adolescents in the Maldives (ages 13–18), with both national and regional findings. particularly at the subnational level. This later Chapter 3 gives a deeper dive into the translates into poor labor market prospects, drivers and barriers to human capital gains particularly for youth and women. Lastly, that go beyond the standard indicators that for females, social norms and expectations constitute the HCI. Chapter 4 provides an related to female mobility, freedom, roles, and overview of the education, health, and social access to sexual and reproductive health (SRH) protection sectors, including challenges and services affect females’ educational paths opportunities in delivery systems. Chapter and their labor market prospects, impeding 5 reviews the principal climate shocks their human capital accumulation and limiting that impact human capital formation in the its utilization. Maldives. Chapter 6 concludes by discussing reform priorities and recommendations. In the current fiscally constrained, post- COVID-19 context, Maldives must prioritize This report is not intended to be an high-impact human capital investments that exhaustive assessment of the country’s human can promote increased equity, resilience, and development sectors. Forthcoming studies— opportunity, as well as long-term economic specifically, a Human Development Public growth. Improving human capital accumulation Expenditure Review and a Country Climate and utilization for all and boosting future Development Report (CCDR)—will dig deeper productivity require synergistic investments in into some of the issues identified but not health, education, and nutrition throughout an discussed in depth in this report, in particular, individual’s life cycle, supported by resilient additional analyses of the expenditures of the delivery systems to support people during crises human development sectors and the climate– and to avoid erosion of human capital. Moving human development nexus. forward, and to address the main challenges identified in this report, Maldives should: 7 Source: ©Andrea Izzotti/Shutterstock Chapter 1 Human Capital as the Key to Long-Term Economic Growth and Prosperity percent in 2012. The rich and diverse marine 1.1. Country context ecological system has enabled the Maldives With an estimated population of 515,1226 to develop a thriving high-end tourism sector yet a total land area of less than 300 sq. km, and spurred economic growth. Tourism the Maldives is a small, densely populated accounts for a third of GDP, driving up living country in South Asia.7 It consists of 185 standards and contributing to substantial islands formed around 27 atolls; the largest city poverty reduction (World Bank 2022d). The and capital, Malé, is home to roughly a third of Maldives performs well on poverty outcomes the total population. compared to its regional, income, and small- island peers (figure 1.1). In 2019, 3.9 percent An upper-middle-income country (UMIC), of the population lived below the international the Maldives has experienced relatively poverty line for UMICs (US$6.85/person/day), rapid economic growth during the decade more than 90 percent of them concentrated leading up to the COVID-19 pandemic, in the atolls. Driven by the pandemic, the contributing to important but inequitable national poverty rate is estimated to have poverty reduction in the country. Over the reached as high as 19.8 percent in 2020, but past ten years, Maldives averaged economic because of the economic rebound after 2021, growth of 6.45 percent per year, ranging from it is expected to drop back to 3.8 percent in a high 8.6 percent in 2011 to a low of 2.5 2023 (World Bank 2022d). 6 According to the Maldives 2022 Census, the Maldives has a population of 515,122: 382,751 native residents, and 132,371 foreigners. 7 Maldives is the eleventh-most densely populated country on the world. World Population Review, Maldives Population 2023 (Live), https://worldpopulationreview.com/countries/maldives-population. 9 Figure 1.1: Maldives poverty rate compared to that of small island nation-states and South Asia comparators National poverty headcount National poverty headcount ratio in small island states ratio in Soth Asia 30 30 25 25.3 25.2 24.3 22.5 22.7 21.9 20 20 14.3 10 10 5.4 5.4 0 0 Maldives St. Lucia Tonga Samoa Seychelles Maldives Sri Lanka Pakistan Nepal Bangladesh Source: World Bank (2022d) Note: Data are compiled from official government sources or computed by World Bank staff using national, country-specific poverty lines. Economic growth, poverty reduction, and and at a higher quality. All citizens of the Maldives investment in the social sectors have helped are covered by the universal health insurance the Maldives improve its human development scheme “Husnuvaa Aasandha,” introduced in outcomes. Between 1995 and 2021, the Maldives’ 2012 and fully financed by the government, which Human Development Index score increased by has the highest spending on health in the region more than one-third, from 0.555 to 0.747, and its as a proportion of GDP . Maldives enjoys one of the ranking among the 191 countries on the index lowest under-5 mortalities in South Asia and has improved from 97th to 90th. The development of the seen a dramatic decrease in its maternal mortality tourism sector created sizable revenues that were rate, from 97 deaths per 100,000 live births in 2003 used to support, among other things, the provision to 53 deaths per 100,000 live births in 2017, all of public and social services. Indeed, Maldives of which has contributed to Maldives having the has spent generously on social sectors. From highest life-expectancy in the region at 79 years 2014 to 2021, the government spent an average (more details in the “Overview of the Health of 42 percent of its annual budget on three social Sector” section of chapter 4). In the education sectors: health (14 percent), social protection sector, Maldives has achieved near-universal (15 percent), and education (13 percent), together enrollment at primary and lower secondary accounting for about 14 percent of annual GDP education levels. This, in turn, has contributed to (figure 1.2). The health sector made significant an important increase in the expected years of strides over the past 40 years by becoming more schooling from 8.5 years in the mid-1980s to over available across the country, to all levels of society 12 years in 2019. 10 Maldives Human Capital Review Unleashing People’s Full Potential Figure 1.2: Share of government spending, by sector 100 General Public Services excluding public debt Defense 80 Public Order & Safety Economic Affairs 60 Environmental Protection 40 Recreation, Culture & Religion Housing & Community Amenities 20 Health Education 0 Social Protection 2014 2015 2016 2017 2018 2019 2020 2021 Source: World Bank (2022) Despite the impressive growth and This tourism-led growth, however, is investments in human development, the accompanied by high levels of indebtedness, economy remains heavily dependent on further constraining the fiscal space. tourism, with limited economic diversification, Increases in recurrent spending on energy rendering Maldives highly vulnerable to subsidies, health, and an ambitious infrastructure external and macroeconomic shocks. Tourism program have translated into large fiscal deficits and related services account for 40 percent and a growing level of indebtedness. Financing of the economy, 80 percent of exports, and large infrastructure projects through external half of total revenues. The Maldives has been non-concessional sources and sovereign prosperous in revenue mobilization compared guarantees has contributed to growing fiscal to its South Asian peers. Revenues from tourism, and debt vulnerabilities. Total public and including income from resorts, tourism goods and publicly guaranteed (PPG) debt rose from about services taxes, green tax, departure charges, and 55 percent of GDP in 2015 (or US$2.3 billion) to other tourism-related tax and nontax revenues, 78.4 percent of GDP in 2019 (or US$4.4 billion). have financed public spending in education, The current account deficit contracted to health, food, and electricity subsidies, as well 26.7 percent of GDP from 28.2 percent of GDP as a relatively large public sector and a sizable in 2018. The large external deficit continued to public investment program. Nonetheless, it is be financed by foreign direct investment and important to note that heavy reliance on foreign external borrowing. FDI inflows were a record direct investment (FDI) and foreign labor has 15.9 percent of GDP in 2019, concentrated in resulted in a disconnect between the country’s the development of tourist resorts. The fiscal young and expanding working-age population deficit also remained elevated, at 6.4 percent of and the economic opportunities that might have GDP , a 1.7 percentage point increase compared been available to them. to 2018 (Blum and Yoong 2020). 11 Figure 1.3: (Left) PPG debt as a percentage of GDP; (right) Current account balance as a percentage of GDP Domestic US$,mm % of GDP External 139.3 2014 2015 2016 2017 2018 2019 Guaranteed debt 0 0 Total debt 15.8 -200 -5 -400 78.3 -10 73.9 25.4 -600 64.5 64.5 57.1 55.0 15.8 4.4 14.8 -800 -15 7.7 2.0 2.3 17.6 23.1 25.2 25.4 18.9 16.2 -1,000 -20 37.1 US$, millions -1,200 36.2 36.6 39.2 37.1 33.9 37.1 -25 % of GDP -1,400 2014 2015 2016 2017 2018 2019 2020 -1,600 -30 Source: Ministry of Finance; National Bureau of Source: Maldives Monetary Authority. Statistics; World Bank staff projections. As an economy that is also heavily import- has managed to roll over a significant portion dependent, Maldives now faces significant of its foreign debt that was due in 2022, debt current account and inflationary pressures servicing risks are expected to remain elevated from the sharp rise in global commodity in the medium term. prices, putting increased pressure on public finances. The government makes generous The anticipated debt refinancing risks blanket provision of food and fuel subsidies due to upcoming large bullet payments— through SOEs to help contain domestic lump sum payments that are to be made price increases. To promote development at the end of a loan for the entirety of its and enhance growth, the Maldives has also outstanding balance—in 2026 emphasize scaled up infrastructure investments since the need to improve fiscal sustainability 2016, which has boosted construction activity, and reduce debt vulnerabilities. The vital tourism capacity, productivity, and medium- recovery in the tourism sector after COVID-19 term growth prospects. Investments in physical should replenish the Sovereign Development and social infrastructure have also contributed Fund to service and repay existing debt. toward poverty reduction and better living Decreasing the levels of debt and ensuring standards for Maldivians. However, financing the replenishment of fiscal buffers will these large investments through external absorb future external shocks, improve non-concessional sources and sovereign market confidence in the Maldives’ fiscal guarantees has contributed to growing fiscal strength, and lower the financing costs of and debt vulnerabilities. Although the Maldives critical investments. These objectives can be 12 Maldives Human Capital Review Unleashing People’s Full Potential achieved by prioritizing capital spending, with the ability to use and combine capital and labor a focus on critical areas that spur growth and effectively through, among other things, good facilitate economic transformation. Improving and effective governance and the provision the investment climate and regulatory of well-administered public services. Human framework should attract private capital capital is therefore a key factor supporting long- investments while reducing the fiscal burden. term growth and prosperity. The extent to which Rationalizing fuel subsidies and investing in human capital is equitably distributed across clean energy will help reduce the country’s the population also affects the sustainability enormous energy costs and move it toward and inclusiveness of development. sustainable fiscal and external balances. It is well established that greater human capital is associated with higher earnings for 1.2. Human capital for sustainable individuals and higher economic performance and inclusive development for countries. A total of 64  percent of the world’s wealth comes from human capital (World Human capital investments—in education, Bank 2021b). The research literature indicates training, and health—play an essential role in that one additional year of schooling raises promoting development and growth (Flabbi earnings by 8 percent (Psacharopoulos and and Gatti 2018). Production is the result of Patrinos 2018). Similarly, a reduction in stunting three interacting forces: the quantity and quality of 10 percentage points increases adult height of labor, which is affected by human capital; by 1 centimeter and adult productivity by physical capital; and total factor productivity— Source: ©Sappasit/Shutterstock 13 3.5  percent. As highlighted in the 2019 World today can expect to attain by their 18th birthday, Development Report: The Changing Nature of assuming current health and education Work, the concept of human capital refers to conditions prevail. Countries are using this the knowledge, skills, health, and resilience that benchmark to assess how much income they people accumulate over their lives, enabling forego because of human capital gaps, and them to become more productive, flexible, and how much faster they can turn these losses innovate members of a society (World Bank into gains if they act now. The index measures 2019). Investing in human capital is paramount human capital at key stages over the life cycle in today’s ever-changing, technology-intensive, of an individual from birth to adulthood, using and competitive global economy. Fostering three components: (a) survival—a measure of human capital requires synergistic investments whether children survive from birth to school in health, education, and nutrition throughout an age (age 5); (b) school—a measure of quantity individual’s life cycle, supported by appropriate and quality of education; and (c) two broad policies and institutions. measures of health—child stunting rates and adult survival rates (see figure 1.4 below for details about the construction of the HCI). The 1.3. World Bank Human Capital HCI is currently available for 174 World Bank Project (HCP) member states (Blum and Yoong 2020). This Human Capital Review will add the first HCI The World Bank Human Capital Project calculation for the Maldives. (HCP), launched in 2018, calls attention to the importance of addressing the “incentive” This report marks the first calculation of the dimension of investing in human capital. The HCI score for the Maldives. Before 2021, the HCP is a program of advocacy, measurement, lack of internationally comparable, harmonized and analytical work aimed at creating learning outcome data for Maldives precluded incentives and policy guidance for more and the calculation of the indicator on Schooling and better investment to accelerate human capital the overall HCI. In 2021, the Maldives National development around the world (World Bank Assessment of Learning Outcomes (NALO) for 2018). One of the main components8 of the HCP Grade 4 Math included adequate Trends in is a cross-country metric—the HCI—designed International Mathematics and Science Study to measure and forecast a country’s human (TIMSS) items, which allowed for the calculation capital. It aims to offer a sharper measure of of the harmonized test scores (HTS). The HTS is the components of human capital to enable an essential indicator for calculating the second governments to design focused policies that HCI component, schooling (see figure below). support human capital development. The TIMMS data9 were made available to the World Bank team in February 2023, leading to The HCI is a measure of the productivity of the first HCI calculation for the Maldives. future generations of workers. It estimates the amount of human capital that a child born 8 The other two components of the Human Capital Project are (i) a program of measurement and research to inform policy action, and (ii) a program of support for country strategies to accelerate investment in human capital. 9 Data collected through the World Bank’s Learning Advancement and Measurement Project (LAMP) and financed by the Global Partnership for Education. 14 Maldives Human Capital Review Unleashing People’s Full Potential Figure 1.4: HCI Calculation; World Bank Human Capital Project = x x Productivity of Survival School Health future worker Will children How much Will they leave Relative to born today school will they school in good benchmark of survive to complete and health, ready for complete school age? how much will further learning education and they learn? and/or work? full health Indicator 1 Indicator 2 Indicator 4 Under 5 Expected Years Under 5 mortality of Schooling stunting rate Indicator 3 Indicator 5 Harmonized Adult survival Test Scores rate Source: Authors’ interpretation based on the World Bank HCP 15 Source: ©Hussain Shafiu/Shutterstock Chapter 2 Calculating the First HCI Score for the Maldives at the National and Subnational Levels Chapter 2: Key Findings • A child born in Maldives today is expected to achieve 59.6 percent of his or her full potential by age 18, given the current state of health and education in the country. • Maldives’ national HCI performance is above its regional, small island state, and same- income group comparators, largely due to the country’s impressive performance on survival to age 5 and age 65. • To fulfill its full potential, Maldives has important national human capital challenges to address, particularly in terms of quality of education. • Indeed, while a Maldivian born today can be expected to achieve 12.4 years of education, after adjusting for quality of learning, he or she can be expected to achieve only 8.17 years of schooling—a loss of 4.32 years. This loss is greater than UMICs (4 years) or small island states (4.1 years) and is on par with South Asia (4.3 years). • Maldives also needs to close the gap on stunting rates. Only 85 percent of children below 5 are not stunted in the country. While this is better than the average rate for South Asia (69 percent), it is below the average rate for UMCIs (87 percent). • Maldives’ utilization adjusted HCI (UHCI), which scales down the HCI by taking into account overall employment rates, reveals untapped human capital wealth and an opportunity loss of potential national growth (UHCI for Maldives is 0.366, down from an HCI of 0.596). This is primarily driven by low employment rates among women (UHCI for men is 0.601 vs. 0.277 for women). • The relatively impressive national HCI performance also masks significant disparities at the subnational level that warrant attention. For example, according to subnational HCI scores, a child born in Malé today is expected to achieve 64 percent of her full potential by age 18, compared to one born in the Central Region, who is expected to achieve only 54 percent of her full potential by age 18. • Based on the regional distribution of child population, some 60 percent of Maldivian children are not expected to realize their full potential, contrary to the prediction of the national HCI. • The high levels of inequality at the regional level are driven primarily by relatively poor education outcomes. For example, Children in Malé are predicted to attain two more years of schooling than children in the Central Region (13.1 vs. 11.1 years respectively). This gap widens further when taking into account quality of education. • Based on the two-year differential in expected years of schooling between Malé and the Central Region, a child born in Malé today is expected to generate 16 percent greater earnings than one born in the Central Region. • Stunting rates are high in all six regions in Maldives, but regional variations are observed with a high rate of non-stunted children of 88.6 percent in the Central Region, to a low rate of non-stunted children of 80.2 percent in the North-Central Region. • All regional HCIs drop sharply when adjusted for labor utilization. Malé’s impressive HCI score of 0.64, for example, drops to 0.41 when adjusted for labor utilization. • This is largely due to low female employment rates across all regions. Females’ HCI in all regions experience a sharp drop when adjusted to labor utilization with an HCI–UHCI differential that ranges from a troubling 31.51 percentage points in the South-Central Region to an even larger HCI-UHCI differential of 38.04 percentage points in the South Region. • Regional variations in UHCIs are also observed with Malé leading the nation, and all other regions falling below the national UHCI average by 1 to 6 percentage points. 18 Maldives Human Capital Review Unleashing People’s Full Potential 2.1. Maldives’ HCI performance in the global context The Maldives performs moderately well on education in the country. In other words, the HCI score, but significant improvements around 40  percent of Maldives potential are needed to fulfil the country’s full human capital will not be fulfilled. Although human capital potential. Maldives’ HCI score the country’s performance is encouraging stands at 59.6 percent, which implies that a relative to its peers and comparator countries child born today in the Maldives will achieve (figure 2.1 below), the national average masks only 59.6  percent of his/her full potential by significant regional variation, discussed in age 18, given the current state of health and detail in the following section. Figure 2.1: Comparison HCI scores 1.0 0.8 Seychelles Human Capital Index 0.6 Maldives, 0.596 buda Dominica Grenada Nepal St. Vincent and the Grenadines India Kiribati Bhutan Solomon Islands Bangladesh 0.4 Afghanistan Pakistan Mauritania 0.2 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Log of GDP Per Capita (PPP, constant 2011 international $) 2020 Source: World Bank team’s calculations for Maldives; World Bank (2022c) for the HCI of other countries; World Bank open data for GDP per capita Figure 2.2: Benchmarking Maldives’ HCI performance 0.7 0.56 0.596 0.6 0.52 0.5 0.48 0.4 0.3 0.2 0.1 0 UMIC Small Island Nations South Asia Maldives Source: World Bank team’s calculations for Maldives; World Bank (2022c) for the comparators 19 Compared to the region, small island health component of the HCI, the stunting states, and its income comparator group, of children under 5 is still relatively high. the performance of the Maldives is Only 85 percent of children below age 5 are encouraging across the HCI indicators, not stunted, although this is better than the with impressive health outcomes driving average for the South Asia region (69 percent) up the HCI score, although the stunting but somewhat behind its income comparator indicator still has room for improvement. (UMICs: 87 percent). Stunting—linked to poor In the area of adult survival rates, Maldives nutrition, and poor water and sanitation—is performs very well compared to all its irreversible after the first 1,000 days of life. comparators, with a notably high 95 percent It is considered the biggest impediment to probability of an adult surviving to age 60. children reaching their potential, and to the This is well above its comparators and above country’s socioeconomic development. the average for UMICs (86 percent). Empirical Stunted children are at greater risk of illness evidence indicates that health improvements and death, impaired cognitive development, that raise adult survival rates by 10 percentage and poor school performance. They carry their points are associated with a 6.5 percent inhibited physical and cognitive development improvement in worker productivity (Blum into adulthood, which later translates into and Yoong 2020). The Maldives does equally lower productivity and earning capacity. well on the probability of children surviving Evidence suggests that a reduction in stunting to age 5—99 percent—performance well rates of 10 percentage points increases above that of its comparators and on par with attained adult height by approximately one UMICs, indicating relatively good maternal centimeter and raises future productivity by and child health. Nonetheless, within the 3.5 percent (Blum and Yoong 2020). Figure 2.3: Health components of HCI Probability of Survival to Age 5 Adult Survival Rate UMICs 0.98 UMICs 0.86 Small Island Nations 0.96 Small Island Nations 0.85 South Asia 0.96 South Asia 0.84 Maldives 0.99 Maldives 0.95 0.95 0.96 0.97 0.98 0.99 1 0.75 0.80 0.85 0.90 0.95 1 Source: World Bank team’s calculation for Maldives, World Bank (2020) for comparators 20 Maldives Human Capital Review Unleashing People’s Full Potential Source: ©Sappasit/Shutterstock Figure 2.4: Maldives’ stunting rate compared to South Asia Region and UMICs UMICs South Asia Maldives 0 0.2 0.4 0.6 0.8 1 Source: World Bank team’s calculation for Maldives, World Bank 2020c for comparators The Maldives also fares relatively well in education performance as measured by the access to education at the national level (figure HCI score because the country exhibits subpar 2.5). For example, a Maldivian born today can be performance when benchmarked against expected to attain 12.4 years of education, an relevant comparators. At the national level, average higher than that of South Asia (10.8 years), adjusting for quality of learning, the expected years small-island nations (11.4), and UMICs (11.8). of schooling decreases from 12.4 years to 8.17 years; a loss of 4.32 years of schooling, which is However, the quality of education—as substantial and greater than that of UMICs (loss of 4 measured by learning-adjusted years of years of schooling) or small-island states (4.1 years), schooling (LAYS)10—negatively affects overall and at par with the South Asia region (4.3 years). 10 The measures of the quantity and quality of education are combined into quality-adjusted school years using the “learning-adjusted years of school” conversion metric proposed in the 2018 World Development Report. LAYS are obtained by multiplying expected years of schooling by the ratio of TIMSS test scores to 625. 21 Figure 2.5: Education Components of HCI 14 12.4 11.4 11.8 12 10.8 10 8.2 7.8 8 7.3 6.5 Years 6 4 2 0 Maldives South Asia Small Island Nations UMICs Expected years of schooling Learning-adjusted years of schooling Source: World Bank team’s calculations for Maldives, World Bank 2022 for comparators There is only a marginal gender difference in the indicators, with the exception of harmonized test overall HCI score, in favor of women (table 2.1). scores. The gender difference in expected years The HCI score for women is 0.60 compared to of schooling is about 0.3 years in favor of women, 0.59 for men. Although the probability of survival to whereas the gender difference in the adult survival age 5 is similar for both males and females at 0.99, rate and in the rate of non-stunted children under women slightly outperform men on most other 5 is, in each case, 2 percent in favor of women. Table 2.1: Gender-disaggregated HCI Components Males Females Overall HCI Component 1: Survival Probability of Survival to Age 5 0.99 0.99 0.99 HCI Component 1: School Expected years of schooling 12.2 12.5 12.4 Harmonized test scores 415 408.6 411.9 HCI Component 3: Health Adult survival rate 0.94 0.96 0.95 Fraction of children under 5 not stunted 0.84 0.86 0.85 Human Capital Index (HCI) 0.59 0.601 0.596 Source: World Bank team’s calculation 22 Maldives Human Capital Review Unleashing People’s Full Potential Adjusting the Maldives’ human capital for Maldives is 0.366, down from its HCI of performance to labor force utilization 0.596 (Maldives Bureau of Statistics 2019). results in a significant drop in the country’s This suggests that more than 63 percent rather impressive HCI score (figure 2.6), of Maldivians’ potential human capital is indicating the need to examine labor unrealized due to gaps in access to quality market conditions to address the drivers education, health, and employment. In other of low human capital utilization rates. The words, the UHCI indicates that a Maldivian HCI shows a sharp decline when adjusted for born today can be expected to achieve labor force utilization. Indeed, the utilization- only 37 percent of his/her full potential adjusted Human Capital Index (UHCI)11 productivity by age 18. Figure 2.6: Comparing HCI and UHCI, disaggregated by gender 0.8 0.596 0.590 0.601 0.6 0.429 0.4 0.341 0.261 0.2 0 Human Capital Index Utilization Adjusted HCI Total Male Female Source: World Bank Staff calculation Significant gender differences are observed lose 0.324 and males lose 0.121). Indeed, in in the UHCI, driven by the gender gap in 2019, 79.6 percent of working-age men were employment rates. The UHCI for females is employed, compared to only 46.1 percent for 0.277 (versus 0.469 for males), down from an women (Maldives Bureau of Statistics 2019). HCI for females of 0.601. This means that, when Despite superior human capital accumulation, employment levels are factored in, female Maldivian women fare poorer in the labor Maldivians lose more than 20 percent more market as evidenced in labor market outcomes. in human capital potential than men (females This is explored in the next chapter. 11 The Utilization-Adjusted Human Capital Index (UHCIs) adjusts the HCI to take account of the labor-market’s underutilization of human capital, based on the fraction of the working-age population who are employed or are under-employed—that is, in jobs where they may be better able to use their skills and abilities to increase their productivity (“better employment”). 23 2.2. Maldives’ HCI scores at the subnational level The section above established that a the capital region. Additionally, given the small Maldivian child today, due to quality of size of the population, especially at the atoll education, is expected to achieve only level, regional-level representation allows for approximately 60 percent of his or her more statistical accuracy because it reduces potential by age 18. In this section, we look at the margin of error. The six regions are:12 subnational HCIs to better understand whether human capital potential is distributed evenly • Malé region—Malé, Villimalé and Hulhumale across the country, and whether children throughout the Maldives are enjoying the same • North region—Haa Alif (HA), Haa Dhaal (H. opportunities to develop their talents optimally, Dh) and Shaviyani (Sh) given the standard health and education • North-Central region—Noonu (N), Raa (R), conditions in their country. Baa (B) and Lhaviyani (Lh) The calculation of the Maldives’ regional • Central region—Kaafu (K), Alif Alif (AA), Alif HCI is based on the country’s division into Dhaal (A Dh) and Vaavu (V) six distinct regions. The decision to follow a regional approach in calculating the subnational • South-Central region—Meemu (M), Faafu (F), HCI, as opposed to an atoll-level representation, Dhaalu (Dh), Thaa (Th) and Laamu (L) is aligned with the government’s objectives to develop regional hubs, with regional service • South region—Gaafu Alif (Ga), Gaafu Dhaal provision boosting local opportunities outside (GDh), Gnaviyani (Gn) and Seenu (S) Source: ©Fotoaerian/Shutterstock 12 This regional division and map are used by the Maldives Bureau of Statistics to calculate multidimensional poverty. They have also been used by successive Maldives Demographic and Health Surveys, most recently the 2016–17 survey. 24 Maldives Human Capital Review Unleashing People’s Full Potential Figure 2.7: Maldives HCI across regions Haa Alif North Region .57 Haa Dhaalu Shaviyani North .58 Noonu Raa Central Lhaviyani Baa Region Kaafu .64 Alif Alif Malé .54 Malé Central Alif Dhaal Region Region Vaavu Faafu Meemu Dhaalu .58 South Thaa Central Region Laamu Gaafu Alif Gaafu Dhaalu .58 South Region Gnaviyani Seenu Source: World Bank staff calculation. Although the national HCI score of 59.6 to realize only 54 percent of her potential is impressive in relation to regional and (figure 2.8). This means a child in Malé will income-group comparators, the score be 10 percent more productive than one in masks significant regional disparities, the Central Region by the time they turn 18. with Malé being a clear outlier. Based Additionally, compared to the national HCI, on the calculation of regional HCIs in the Malé leads the nation with four percentage Maldives, a child born in Malé today is points over; all other regions trail behind with expected to realize 64 percent of his/her a range between 2 to 6 percentage points. potential by age 18, in comparison to a child born in the Central Region who is expected Figure 2.8: Subnational HCI scores compared to the national HCI 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52 Male North North Central Central South Central South National HCI (.596) Source: World Bank staff calculations As with the national trend, and across all the North Region to a high of 1.7 percentage regions in the Maldives, females have a points in the South Region (figure 2.9). This slight advantage over males in human capital suggests that males at the subnational level accumulation. The prominent observation in the are at a disadvantage in accumulating human Maldives, however, is that although the gender- capital, with those in the Central Region scoring disaggregated HCI scores in the Malé Region are the lowest HCI nationally, at 54.4. Although very close to each other—with a 0.2 percentage females have a slight advantage over males in point difference to the advantage of females— human capital accumulation in most countries, by contrast, the gender-disaggregated HCI as predicted by their human capital scores, the scores in the remaining regions have larger relatively large gender gap in human capital variances that are to the advantage of females, accumulation at the regional level warrants ranging from a low of 0.8 percentage points in further investigation of the underlying drivers. Source: ©Fotopogledi/Shutterstock Figure 2.9: HCIs across gender and regions 60.5 South Region 58.8 59.3 South Central Region 58.4 55.6 Central Region 54.4 59.3 North Central Region 57.9 58.3 North Region 57.5 64.5 Malé 64.3 52 54 56 58 60 62 64 66 HCI Female HCI Male Source: World Bank staff calculations Notes: National stunting rates for males and females, from the 2016–17 Maldives Demographic and Health Survey (DHS), are used for the subnational level because subnational data were not available. Similarly, national under-5 mortality rates for males and females from the UN Inter-agency Group for Child Mortality Estimation (UN IGME) are used because gender-disaggregated subnational rates were not available. Generally, regional HCI scores around the world The regional HCI findings are also aligned show a negative correlation with poverty levels, with the regional map of Maldives’ and Maldives is no exception. More education multidimensional poverty. According to and better health, as measured by the HCI are, the Maldives multidimensional poverty not surprisingly, linked to higher welfare levels. (MDP) measurement in 2016/17, 28 percent The subnational HCI scores mimic the Maldives of the population was multidimensionally poverty map (figure 2.10, left panel). Yet despite low poor.13 Ten percent of Malé’s population poverty rates in the Maldives, the country remains are multidimensionally poor, compared to unequal. The poverty rate, as measured by the 40 percent of those in the regions (figure 2.10, international poverty line for UMICs (US$5.50 PPP right panel). Malé and the Central Region are per person per day), is 1.7 percent, with the entire at opposite ends of the multidimensional poor population concentrated in regions other poverty headcount rates, with Malé having the than the capital Malé (World Bank 2022d). At the lowest multidimensional poverty headcount national poverty line—71.4 Maldivian rufiyaa (MVR) rate, at 9.6 percent, and the Central Region or US$4.6 per person per day—the poverty rate is having the highest, at 46.7 percent. 5.4 percent. About 10 percent of Maldivians in the atolls are poor, compared to less than 1 percent of individuals in Malé (World Bank 2022d). 13 The indicators include health (underweight, obesity, access to health), education and information (years of schooling, access to internet), and living standards (safe drinking water, toilet/sewage, overcrowding). 27 Figure 2.10: Regional HCIs and regional MDP headcount (left panel), and reginal HCIs and regional poverty headcount (right panel) 30 0.66 50 0.65 0.64 45 0.64 25 40 0.63 0.62 0.62 20 35 0.60 0.61 30 0.60 15 0.58 25 0.59 0.56 20 10 0.58 15 0.54 0.57 10 0.56 5 0.52 5 0.55 0 0.50 0 0.54 Male’ North North Central South South Male’ North North Central South South Region Region Central Region Central Region Region Region Central Region Central Region Region Region Region Region Poverty headcount HCI MD HCI Source: UNICEF (2020) (left panel); World Bank (2022) (right panel) Considering the population distribution regional HCIs suggest that around 60 percent of the Maldives, particularly the 0–19 age of children in the Maldives will not realize group, the regional HCI scores suggest their human capital potential and future that the majority of children will not productive capacity, in contrast to what realize their full potential, in contrast the national score of 0.596 would predict. to what the national HCI score predicts As such, the future productive capacity of (figure 2.11). The HCI’s predictive capacity children born in the North, North-Central, makes it a powerful tool for assessing the Central, South-Central and South Regions is returns of current human capital investments significantly less than that of children born in in future productivity and growth. Based Malé, according to the subnational HCIs. on the population distribution of 2022,14 14 According to the provisional results of the 2022 Maldives Census, there are 80,251 individuals in the 0–19 age group in atolls, compared to 52,085 individuals in the same age group in Malé. 28 Maldives Human Capital Review Unleashing People’s Full Potential Figure 2.11: Regional HCIs in terms of regional distribution of population ages 0–19 Population 0-19 and HCI values by region North Region .57 North 18,631 HCI value .58 Central Region .54 HCI value 17,358 Central Region 11,132 HCI value .64 Malé Region HCI value 52,085 .58 South Central Region 14,568 HCI value Source: Subnational HCIs are based on World .58 South Region HCI value 17,464 Bank staff calculations; subnational population ages 0–19 is based on the 2022 Maldives Census. public resources, identifying the drivers of human 2.3. Understanding the regional capital deficits is imperative if human capital HCI components investments are to be prioritized. In a post-COVID, fiscally constrained context, identifying the sources of regional inequality in human capital accumulation is vital to 2.3.1. Survival prioritizing investments that would change Regional rates related to survival to school age the dynamics of human capital formation and, reflect small variations across the Maldives, in turn, the returns on these investments. In and small differentials to the national rate.15 2022, Maldives emerged from the pandemic While Malé and the South Region have the with a 60 percent increase in its debt burden in lowest probability of children surviving to school comparison to pre-pandemic rates. The general age (5 years of age)—97.6 percent—the North- government gross debt as a percentage to GDP Central Region leads the nation with the highest was 79 percent in 2019 and increased to 126 rate at 98.5 (figure 2.12). percent in 2022 (IMF 2022). With such limited 15 Maldives’ under-5 mortality declined from 9.5 per 1000 in 2016 to 6 per 1000 in 2021 (UNICEF). However, given that the subnational rates beyond 2016 are not available, the HCI component relating to the probability of survival to age 5 at the subnational level is calculated using the 2016–17 Maldives DHS, and rate differentials to the national rate are calculated using the national rate in 2016–17. Figure 2.12: Probability of survival to age 5 at the regional level 98.60 98.50 98.40 98.20 98.00 98.00 98.00 98.00 97.80 97.60 97.70 97.60 97.60 97.40 97.20 97.00 Malé North North Central South South National Central Central Source: World Bank staff calculations based on the Maldives DHS 2016–2017 (MOH and ICF 2018) Note: Even though national-level under-5 mortality rates are updated annually, to be able to assess regional–national differentials, the national under-5 mortality rate for 2016 is used here, based on Maldives DHS 2016/17. comparison to the national average. This could 2.3.2. Health potentially be explained by the concentration of As with the national HCI, although stunting rates children in these two regions. The North Region has are high across all six regions in the Maldives, the highest concentration of children ages 0–19 in they reveal significant regional variations. the country, followed by the North-Central Region While most regions in the Maldives have ratios of (figure 2.14). At the same time, both regions have non-stunted children that are above the national the highest concentrations of the poor nationally: ratio of 84 percent, the North and the North-Central 27.2 percent and 15.4 percent, respectively, Regions weigh the national performance down totaling 44.3 percent. Still, more research on the (figure 2.13). Based on empirical evidence, stunting factors contributing to the high rates of stunting levels in these two regions translate into a minimal among children in these two regions is necessary, reduction in future productivity of 1.47  percent especially in terms of children’s feeding practices, and 1.59 percent for children born in the North intake and diversity of nutrient-rich foods, and and the North-Central Regions, respectively, in access to health. Figure 2.13: Ratio of non-stunted children at the regional level, and national–regional differentials 110 90 86.8 82.5 80.2 88.6 88.3 84.1 84.7 70 50 30 10 2.1 3.9 3.6 -10 -2.2 -4.5 -0.6 Malé North North Central South South National Central Central Fraction of Children under Five not Stunted National-Regional Differentials Source: World Bank staff calculations based on data from the Maldives DHS 2016/17 (MOH and ICF 2018) Note: Even though more recent national-level stunting rates are available, given that subnational levels were not available, the calculation of national–regional differentials were done using the national stunting rate from the Maldives DHS 2016/17 30 Maldives Human Capital Review Unleashing People’s Full Potential Figure 2.14: Distribution of children ages 0–19 in the Maldives, by region 250,000 0.400 0.350 200,000 0.300 150,000 0.250 0.200 100,000 0.150 0.100 50,000 0.050 0 0.000 Malé North North Central Central South Central South Region Region Region Region Region Population Children population (0-19) Percentage to regional population Source: Maldives Census 2022 Under the Health component of the regional survival rates (the South-Central Region) and the HCIs, variations in adult survival rates are poorest performer (the Central Region) is 1.5 years minimal, and as such, do not explain the (figure 2.15), which accounts for a little under 1 large variances in the subnational HCIs. The percent improvement in future productivity to the variance between the best performer in adult advantage of the South-Central Region. Figure 2.15: Probability of survival from age 15 to age 60 across gender and regions 98 97 96.4 96.7 96.4 96.6 96.3 96.2 96 95.6 95.3 95.3 95.0 94.7 94.9 94.7 95 94.5 94.2 94.1 94.1 94 93.7 93.4 93.0 93 92 91.8 91 90 89 National Malé North North Central Central South Central South Region Region Region Region Region Region All Male Female Source: Calculations by the Maldives Department of National Registration 31 2.3.3. Education Within the Education component, despite high Similarly, although Maldives’ performance in overall national schooling levels, significant Harmonized Test Scores (HTS) is significantly regional disparities exist with respect to years above that of regional peers, and slightly above of schooling, with two additional years of schooling same-income-group comparators (UMICs), between the best performer, Malé (13.1  years), this impressive performance hides important and the poorest performer, the Central Region subnational variations. Malé again leads the (11.1  years). Based on empirical literature, an nation, and the remaining five regions trail quite additional year of learning raises earnings by about far behind. Children in Malé, who have an HTS of 8 percent (Blum and Yoong 2020). This means that 434.25, score on average 32.9 points higher than a child born in Malé today can be expected to children in the North Region (with an average generate 16 percent greater earnings as a future score 403.96). Except for Malé (434.25) and the productive worker than a one born in the Central South Region (413.76), the other regions are all Region. All the other four regions have on average well below the national average of 411.9. In short, one EYS less than Malé (figure 2.16).16 Except for children in Malé attend more years of schooling Malé, the other regions all fall below the national and perform better in school compared to their EYS (12.52), with a range of 1.46 of EYS in the Central peers in other regions. Region, to 0.23 EYS in the North-Central Region.17 Figure 2.16: Expected years of schooling (EYS) and Harmonized Test Scores (HTS) at the subnational level 440 434.25 13.50 430 13.00 420 413.76 12.50 12.00 410 401.37 404.04 403.96 11.50 400 402.40 11.00 390 10.50 380 10.00 Male’ North Region North Central Central Region South Central South Region Region Region EYS HTS Source: EYS are calculated by World Bank staff Note: To calculate EYS, gross enrollment data from the Maldives Ministry of Education for the year 2019 (March) were used; mid-year population projection, based on the 2014 Population and Housing Census. HTS scores are based on TIMSS Mathematics Score Scale as reported by the Ministry of Education based on national mathematics assessment for Grade 4 in 2021 which included TIMSS items. 16 Full EYSs are based on 14 years, structured as follows: pre-primary enrollment rates approximate the age-specific enrollment rates for 4- and 5-year-olds; the primary rate approximates for 6- to 11-year-olds; the lower-secondary rate approximates for 12- to 14-year-olds; and the upper-secondary approximates for 15- to 17-year-olds. It is important to note that the structure of education in the Maldives is slightly different. The four education levels are structured as follows: pre-primary covers two years (Lower Kindergarten and Upper Kindergarten) for the 4–5 year old age group; primary education level covers from 1st through 7th grade for the 7–12 year old age group; lower secondary education level spans from 8th grade through 10th grade for the 12–15 year old age group; and, finally, higher secondary education goes from 11th to 12th grades (the 16–17 year old age group). 17 The national EYS calculated using NERs (12.4) is lower than the national EYS calculated using GERs (12.52), which is appropriate for benchmarking across nations. However, to assess Maldives EYS performance at the subnational level, the authors benchmarked regional EYS against national EYS calculated using the GERs, that is, 12.52. 32 Maldives Human Capital Review Unleashing People’s Full Potential As with the national HCI findings, challenges Region, with 7.15 LAYS. Children born in all other related to the quality of education are also regions in the Maldives will have an average LAYS evident at the subnational level, with both below the national level of 8.26 (table 2.2). This access and quality of learning impacting future suggests that, based on the regional distribution productivity and earnings. Adjusting for quality of children ages 0–19 (figure 2.17), the future of learning, the gap between Malé and other productive capacity of approximately 60 percent regions widens even further (see table below). of children in the Maldives will be lower by Malé shows the best performance of learning- 1.28 percent to 8.9 percent than what the national adjusted years of school (LAYS) with 9.11 LAYS, average would otherwise predict, unless the almost two full LAYS higher than the Central current trajectory is altered. Figure 2.17: Regional percentage distribution of children ages 0–19 in the Maldives 0.13 Malé 0.11 North Region 0.40 North Central Region Central Region 0.08 South Central Region South Region 0.13 0.14 Source: Maldives Census 2022 Table 2.2: Regional EYS and LAYS and number of years reduction Number of school years reduction Region EYS LAYS due to quality of learning Male’ 13.11 9.11 4.00 North Region 12.16 7.81 4.35 North Central Region 12.29 7.94 4.34 Central Region 11.06 7.15 3.91 South Central Region 12.39 7.98 4.41 South Region 12.24 8.10 4.14 National 12.52 8.26 4.26 Source: World Bank staff calculations Note: EYS and LAYS at the subnational level are calculated using gross enrollment ratios (GERs), given that data on age-specific enrollment at the subnational level are not available, hence the variation between the national EYS and LAYS reflected in this table and the EYS and LAYS reflected in section 1 of this chapter which relies on more accurate net enrollment rates (NERs). 33 A quick comparison between the EYS and (excluding the Central and South Regions). This LAYS variances at the national and regional suggests that inequality in access to learning levels reveals a worrying reality. Although all is even further exacerbated by differential regions are already at a human capital formation in access to good-quality learning, putting disadvantage due to national–regional EYS children who reside in non-Malé regions at a variances, when the EYS are adjusted for greater disadvantage in their future productive quality of learning, the gaps grow even larger and earning capacity (figure 2.18). Figure 2.18: Differentials in national–subnational EYS and LAYS 1.0 0.5 0.0 -0.5 -1.0 -1.5 Malé North North Central Central South Central South Region Region Region Region Region EYS differential to National EYS LAYS differential to National LAYS Source: World Bank staff calculation Note: To calculate regional–national differentials in the EYS and LEYS, national GER for the year 2019 is used similar to the use of regional GERs to calculate EYS at the subnational levels. Therefore, the national benchmark is 12.52, which is slightly higher than that using national NER and results in an EYS of 12.4. The rationale is that whereas national EYS is relevant for the national HCI, which relies on NERs across countries to compare human capital accumulation across nations, the subnational EYS is necessary to the extent that it highlights disparities and differentials to national rates. In all regions, although females spend genders and all regions, and male students in slightly more time in school, males perform Malé have the highest HTS scores also across better in leaning assessments, indicating both genders and all regions. This results in that they obtain more learning from their Malé students having the highest number of education (figure 2.19). Female students in Malé LAYS and the highest educational contribution have the highest number of EYS across both to their human capital (figure 2.20). 34 Maldives Human Capital Review Unleashing People’s Full Potential Figure 2.19: EYS across regions and gender lines (left panel); HTS across regions and gender lines (right panel) 12.49 411 South 12.02 South 416 South Central 12.40 South Central 402 12.36 402 Central 11.16 Central 405 10.98 403 North Central 12.33 North Central 404 12.26 404 North 12.21 North 398 12.06 404 Malé 13.32 Malé 424 12.86 443 10 11 12 13 14 360 380 400 420 440 460 EYS Female EYS Male HTS Female HTS Male Source: World Bank staff calculations for EYS Figure 2.20: Subnational learning-adjusted years of school, by gender 8.22 South 8.00 South Central 7.99 7.95 Central 7.23 7.08 North Central 7.97 7.93 North 7.78 7.80 Malé 9.04 9.13 6.00 6.50 7.00 7.50 8.00 8.50 9.00 9.50 LAYS Female LAYS Male Source: World Bank staff calculations for EYS In conclusion, as with the national HCI the education component emerges as the findings, education outcomes drive regional component with not only the least contribution HCI disparities. When the contributions of all but also the largest variations across the regions three HCI components to the regional HCIs are (figure 2.21). When small regional inequalities in stacked for comparison, survival to age 5 shows access to quality learning are compounded in little to no variation. The health component, on the Maldives, they add up to a significant loss the other hand, shows minimal variations across of opportunities for children to realize their full regions but a significant gap to achieving full human capital potential, given the health and health primarily due to stunting. By contrast, education conditions predominant in the country. 35 Figure 2.21: Contributions of the three HCI components to subnational scores (survival, health and education) South 0.98 0.62 0.96 South Central 0.98 0.62 0.96 Central 0.98 0.58 0.95 North Central 0.99 0.62 0.95 North 0.98 0.61 0.95 Malé 0.98 0.68 0.96 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Survival Education Heath Source: World Bank staff calculations 2.4. Utilization-adjusted HCI at the subnational level Regional HCIs drop significantly when UHCI of 31 percent each, given the health, adjusted for labor utilization, with the education and employment conditions in general pattern of regional UHCIs mirroring his/her respective region. At the same time, that of regional HCIs. Malé leads the nation, the Central Region, which carries the lowest and all other regions fall below the national HCI score (4 percentage points below the UHCI average (figure 2.22). The regional national average), is a case to note. The UHCIs reflect the regional HCIs, suggesting region has a UHCI that does not reflect the that poor human capital accumulation leads level of human capital accumulation, as the to poor human capital utilization. A child born region’s UHCI is significantly closer to the in Malé today, with a UHCI of 41 percent, is national UHCI average, which suggests that predicted to be 10 percentage points more the South Region has a better rate of human productive during working age than a child capital utilization. born in the North or South Regions, with a 36 Maldives Human Capital Review Unleashing People’s Full Potential Figure 2.22: UHCI at the subnational level 0.42 0.40 0.38 0.36 0.34 0.32 0.30 Male North North Central Central South Central South National UHCI (.37) Source: World Bank staff calculations based on Maldives Household Income and Expenditures Survey 2019 Additionally, despite their slightly superior that ranges from a troubling 31.51 percentage human capital scores in all six regions, females points in the South-Central Region to an even across the six regions fare considerably sharper drop of 38.04 percentage points in the poorly in human capital utilization. Similar to South Region (figure 2.23). Females therefore the national female UHCI, females’ UHCI in all constitute an opportunity loss of national wealth regions experience a sharp drop when adjusted yet to be utilized in the Maldives. to labor utilization with an HCI–UHCI differential Figure 2.23: Gender-disaggregated HCIs and UHCIs at the subnational level 70 64.48 65 60.46 59.28 59.31 60 58.28 55.55 55 96.3 50 46.3 47.9 45.4 44.0 45 41.8 40 35 32.1 30 27.5 27.8 25.9 25 23.6 22.4 20 Malé North North Central Central South Central South Region Region Region Region Region HCI Male HCI Female UHCI Male UHCI Female Source: World Bank staff calculations 37 Source: ©Sun_Shine/Shutterstock Chapter 3 Challenges and Drivers of Human Capital Accumulation across the Life Cycle Chapter 3: Key Messages • Human capital is driven, directly and indirectly, by a host of factors within and beyond health and education, some of them country specific. • Human capital is also cumulative with a fast and exponential rate of accumulation during the first 5 years of life, making an early deficit highly consequential in terms of future rate of utilization. • In Maldives, during early childhood, malnutrition in forms other than stunting, such as anemia and wasting, affect human capital accumulation. • All-time access to healthy nutrient-rich foods, and a lack of knowledge of healthy feeding choices, are probable drivers, among others, of malnutrition among Maldivian children. • Given the country’s high reliance on food imports, the availability and prices of essential food items are affected by climate change impacts, challenges of sea transport, and interruptions in international food supply chains. • Maldives’ social protection system is not sufficiently linked to human capital accumulation measures and incentives, and spending tends to be skewed to old age at the expense of the early childhood and childhood stages. • Not all Maldivian children start pre-primary education at the appropriate age, so while some get a head start in human capital accumulation, others experience human capital deficits at and early stage. • During childhood, although Maldives has achieved near universal primary level enrollment, attendance rates do not mirror enrollment levels, and quality of education by international standards continues to hold back the country’s education outcomes. • During adolescent and youth, unequal opportunities to access upper secondary education at the subnational level—let alone high-quality and relevant education— impacts human capital accumulation, which translates into poor labor market prospects for youth. • The geography of Maldives and the inconvenience and cost of sea travel make it harder for students to seek secondary education on other islands. • Education spending is skewed toward primary level education and manifests into poor education outcomes at upper secondary level, especially at the regional level. • Traditional social norms and expectations related to female mobility, freedom, roles, and access to sexual and reproductive health (SRH) services affect the educational path and labor market prospects of girls and women. • The rise of noncommunicable diseases in Maldives is also increasingly threatening the ability of the working-age population (WAP) to fully reap the returns on their human capital. The preceding chapters presented the HCI Human capital accumulation challenges calculations and the ensuing outcomes (both start at a young age, and human capital at national and regional levels). Chapter 3 takes deficits accrue over time. For example, the a deeper look at the drivers and challenges of health, nutrition, and lifestyle practices of a building human capital throughout the life cycle mother tend to shape the health and wellbeing (figure 3.1), with a focus on the regional level, of the child and, in turn, the child’s growth and and bearing in mind the findings that arose from ability to learn and become a productive adult the HCI analysis. in the future. These outcomes also correlate 40 Maldives Human Capital Review Unleashing People’s Full Potential with the geographical location, income level, therefore takes a life cycle approach to better and education level of the mother and of the understand the patterns of geographic and household. Early childhood development gender-based deficits that were revealed in the and education, in turn, form the foundational subnational HCIs analysis in chapter 2. elements for subsequent stages. This chapter Figure 3.1: Human capital drivers and challenges across the life cycle Challenges Drivers Drivers HD related Other GPs Stage of Life · Uneven decline in child · Nutrition (lack of a diversified diet) · Fisheries and agriculture Early mortality · Reliance on food imports · Uneven decline in stunting · Supply/transport of food Childhood and wasting imports to remote atolls Conception -5 · Persisting malnutrition challenges · Poor learning outcomes at · Inequality in education quality · Limited physical primary level by national · Quality of curriculum implementation & connectivity standards with high teacher training · ICT infrastructure in atolls Children discrepancies · System for education quality assurance supporting remote learning · Low school attendance at · Use of ICT in learning · Social norms (violence 6-11 primary level · Appropiate social protection policies/programs against children) · Learning loss post COVID-19 (esp. in remote islands) · Low/declining rates of · Access to higher secondary education · Difficulty and cost of sea enrollment at higher · High rate of at-risk youth travel for students secondary level · Special learning needs · Social norms re.employment Adolescent · High OOSC, sdolescent and · Quality of curriculum implementation & of boys 16+ & Youth youth at risk of exploitation teacher training · Socio-economic · Poor learning outcomes by · System for education quality assurance inclusion for youth 12-18 national standards · Education relevance to the LM & lack of · Use of ICT in learning · Learning loss post Covid-19 career counseling · Social norms (violence · Appropiate social protection policis/programs against children esp. girls) · High levels of NCDs · Insufficient spending on prevention health care · Weak macroeconomic · High NEET rates among youth · Behavioral practices (inactivity, smoking, etc.) policies/Undiversified · High reservation wages · Availability/price of essential NCD medication economy Adult among nationals · Relevance of ed. (esp. STEM & TVET) to LM needs · Social norms · Growing need for old · LM policies (few of inefficient ALMPs/PES; limited · LImited private sector 19-up age care self-employment/entrepreneurship, etc.) development Source: World Bank staff creation 41 3.1 Human capital challenges and drivers during the early childhood stage (conception to 5) In Maldives, most children are up to par in their Despite considerable progress in health development during this stage, but spatial outcomes, malnutrition, particularly in the disparities and some minimal negative trends form of protein-energy malnutrition, anemia, in health and education outcomes can be and vitamin A deficiencies in the mother observed. The early childhood stage is a critical and child, are still serious challenges in period for human capital development. Physical the Maldives, with rates that are quite high and cognitive growth is fastest during infancy and for children under 5 for UMIC (Maldives the first five years of life, with 90 percent of the Bureau of Statistics, UNICEF Maldives, and brain developing by age five. While most children OPHI 2020). The fastest and most impactful in Maldives are on par in their development human capital accumulation starts at during the early childhood stage, some spatial conception and continues through gestation disparities and negative trends are observed and early childhood (World Bank 2022d). In creating gaps in human capital accumulation SAR, Maldives ranks second, after India, in at a very early stage. For example, in the North the prevalence of anemia among women of Region, stunting levels among children under 5 reproductive age (FAO, IFAD, UNICEF, WFP increased from 15 percent in 2009 to 18 percent and WHO 2021). Fifty-two percent of women in 2016 (MOHF and ICF Macro 2010; MOH and of reproductive age (15–59) and 38 percent of ICF 2018). These challenges are driven by several children 6–59 months suffered from anemia factors that start during gestation and continue in 2019, with the two rates on an upward through the life cycle. trend in the preceding decade (figure 3.2, left Source: ©Andrea Izzotti/Shutterstock 42 Maldives Human Capital Review Unleashing People’s Full Potential panel) with the highest rates in Malé and the deficiency, and deficiencies in folate, vitamins Central Region (figure 3.2, right panel). The B12 and A, anemia is correlated with increased Global Nutrition Report in 2022 indicated that risks of low birthweight, preterm birth, perinatal the country has made no progress toward mortality, and neonatal mortality (Young achieving the target of reducing anemia 2018). Anemia among children, on the other among women of reproductive age, with 52 hand, contributes to child mortality through percent of women ages 15–49 years affected malnutrition and increased susceptibility to (Global Nutrition Report 2022). While the most infection, delayed child cognitive and physical common causes of anemia among women development, and reduced visual and auditory are nutritional deficiencies, particularly iron functions (Sundararajan and Rabe 2021). Figure 3.2: Prevalence of anemia among women of reproductive age (15–49) and children (6–59 months) (upper panel); anemia among children under 5 and women of reproductive age, by region (%) (lower panel) 100 50.3 51.3 52.2 47.3 48.3 49.3 44.5 44.9 45.6 46.4 80 60 33.4 33.6 33.9 34.4 35.0 35.6 36.3 36.8 37.3 37.8 40 20 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Prevalence of anemia among woman of reproductive age (% of women ages 15-49) Prevalence of anemia among children (% of children ages 6-59 months) 80 60 40 20 Childhood anemia Women anemia 0 (15-49) Male’ North North Central Central South Central South Source: World Bank (n.d.d) (left panel); the Maldives DHS 2016–2017 (right panel) 43 Anemia and malnutrition among women findings, nearly one in five children under of reproductive age and children are 5 in the Maldives is stunted (UNICEF 2023). not necessarily the products of poverty. Additionally, in 2017, almost 15  percent Residing in an urban area, being underweight, of children under 5 in the country were having undergone female sterilization, being underweight, a rate significantly high for pregnant, and menstruating in the last six UMICs, which average 1.8 percent (World weeks are associated with increased odds of Bank n.d.d). Similarly, in 2017, 9.1 percent of moderate to severe anemia in the Maldives children under 5 were wasted in comparison (Rahman et al. 2021). The highest incidences to 1.7 percent in countries of a similar of anemia among women of reproductive age income level (World Bank n.d.d). Finally, the and children are recorded in urban settings, prevalence of overweight children under 5 that is, in Malé.18 At the same time, the most was 4.9 percent in 2016–17 but, the country recent poverty analysis shows that less than is “on course” to prevent the figure from 1 percent of individuals in Malé are poor, in increasing (Global Nutrition Report 2021). comparison to 10 percent in the atolls; and in population terms, 93 percent of the country’s Early initiation and exclusive breastfeeding poor live in atolls (World Bank 2022d). Data during infancy, as well as the timely from the Demographic and Health Survey introduction of diversified and nutrient-rich (2016–2017) also show that the prevalence foods, are essential for the development of anemia generally rises with increasing of human capital during early childhood. household wealth suggesting challenges In all, 97 percent of children born within the related to knowledge of healthy and two years leading to the DHS of 2016–2017 appropriate feeding practices. Although not were breastfed at some point: 67 percent as prevalent as other forms of malnutrition, within 1  hour of birth, and 89 percent within obesity is largely due to the increased 1 day of birth. However, infants in urban consumption of unhealthy packaged and settings, that is, Malé, were less likely than processed foods, and a limited knowledge of those in other regions to be breast-fed, and proper nutrition (UNICEF 2023). This suggests infants in the highest wealth quintile fare the that the degree of knowledge and public worst. Additionally, the feeding practices of awareness of good feeding practices and only half of children ages 6–23 months met nutrition may be a driver of malnutrition and the minimum acceptable dietary standards child development. (MOH and ICF 2018). Although women’s and children’s diets contain enough protein and Malnutrition in the form of stunting, carbohydrates because of the consumption wasting, underweight, and to a lesser of tuna and starchy crops grown in home extent obesity, among children under gardens, they tend to be deficient in iron, 5 is a public health concern in the fat, and micronutrients, especially vitamin Maldives, that threatens human capital A, which is linked to low fruit consumption accumulation during the early childhood (Golder et al. 2001; MoH 2016 as quoted in stage. As illustrated from the national HCI IFRC 2021). 18 Only the Greater Malé region, with 41 percent of the population, is considered urban (World Bank n.d.d). 44 Maldives Human Capital Review Unleashing People’s Full Potential The availability of essential food items rates of micronutrient deficiencies among is a challenge in the Maldives in part due children under 5 and women of reproductive to its heavy reliance on food imports, age (UNICEF Maldives n.d.). which may affect access to nutrients that are necessary for healthy development The Maldives is the largest food importer and human capital accumulation during in South Asia. The country imports childhood. As a small-island state, the essential food items such as meat, eggs, Maldives is almost exclusively reliant on fruits, vegetables, and dairy, which are food imports and, therefore, vulnerable to distributed from the capital (MFDA 2017). To disruptions in global food supply chains. Less put it in perspective, the Maldives has the than 10 percent of the food requirements highest food imports in South Asia and is of Maldives are met through domestic significantly above the average food imports production, the country being self-sufficient as a percentage of total merchandise imports only in fish (UNICEF Maldives n.d.). Research compared to countries of similar income suggests that the low availability of a diverse level and the world (figure 3.3). In 2022, diet and the low consumption of fresh fruits and due to the disruption in food supplies result in inadequate intake of nutrients and is worldwide, food inflation in the Maldives one driver of malnutrition among Maldivian rose to its highest level in six years, starting children (Asra et al. 2020; Haq et al. 2020 as at 1.9 percent at the beginning of the year quoted in IFRC 2021). According to UNICEF, and reaching 6.6 percent in December 2022 fewer than 6.5 percent of Maldivians eat (Trading Economics 2023). enough healthy produce, which results in high Figure 3.3: Food imports (% of total merchandise imports), 2021 25 23 20 15 10 8 8 6 5 0 Maldives South Asia Upper middle World income Source: World Bank (n.d.d) 45 Box 3.2: Agriculture and food production in the Maldives Agriculture in the Maldives is restricted by the low availability of arable land: less than 15 percent (about 30,000 hectares) of the country’s total land area is considered to be arable. Estimated to account for approximately 1.4  percent of GDP, agriculture is a minor sector of the formal economy. About 6,500 farmers on 74 inhabited islands are registered, most of whom are subsistence farmers or smallholders, and 53 percent of whom are women. An additional 1,300 hectares on 78 uninhabited islands have been leased for 21 years to private sector companies for commercial agriculture. Less than 10 percent of the food requirements of Maldives are met through domestic production. The country is self-sufficient only in fish. The food requirements of the tourism sector, especially the upmarket luxury tourist resorts for which Maldives is famous, are therefore a major challenge but also an opportunity for domestic agriculture. However, the potential for rural development is constrained by the shortage of arable land, its broad geographical spread, the competition from other uses for limited fresh water, the low level of value-addition of agricultural and fisheries products, the low availability of inputs, and the high food quality standards demanded by the resorts. Source: FAO (2018) Food availability and prices in the Maldives (IFRC 2021). In some island communities, for are closely affected by the impacts of example, access to fresh fruits, vegetables, climate change and the challenges of and legumes throughout the year can sea transport. The sustainable supply of be a challenge because of supply chain fresh foods, particularly to the more remote difficulties and severe weather (UNICEF islands, is directly affected by transport Maldives n.d.). During the 2021 monsoon challenges and costs. This makes it more season, for example, islands in the North difficult for people living in remote islands Region (Noonu atoll) faced food shortages to access fresh and diversified food (Asra because of weather-related transport et al. 2020). Climate change and over- interruptions between Malé and the other extraction are already affecting fish stocks islands (Areeba 2022). and agricultural productivity in the Maldives 46 Maldives Human Capital Review Unleashing People’s Full Potential Even though the Maldives social protection Additionally, not all Maldivian children system has taken leaps forward in start formal education at the appropriate integrating delivery systems, challenges age, which robs some of them of a head remain with respect to addressing needs start in human capital accumulation. across the life cycle and improving coverage. During the 2019–20 school year, only 17,060 Although children under 5 constitute at least out of 21,159 children of pre-primary age 5.8 percent of the population and senior (3–5) were enrolled, and only 16,405 were citizens (65 years and older) constitute enrolled according to their corresponding only 4 percent, the latter receive more than age (MOE 2020). Although the HCI calculation 90  percent of social assistance spending, does not include nursery (age 3) in the “full” and the remainder goes to small categorically 14 years of expected years of schooling, targeted programs and one social assistance this percentage still means that a significant to poor families (World Bank n.d.a). Maldives percentage of children, including pre- still has no promotion of, and increased access primary-aged children, were not enrolled to, fortified complementary foods nor services at any level of education and were left at a for improved early-childhood nutrition such as disadvantage compared to their peers. The nutrition counseling (Torlesse and Raju 2018). risk of early human capital deficits due to The Maldives can benefit from programs that delay in attending preprimary education address the challenges and needs of children varies from region to region, with the highest in early childhood, particularly programs that risk in the North Region and the lowest in address the nutritional status of women of Malé (figure 3.4) (MOH and ICF 2018). reproductive age and children in terms of both awareness building as well as service and nutrition provision. Figure 3.4: Percentage of children ages 36–59 months who attended early childhood development by region 90 85.4 85.2 80.7 80 72.5 73.5 70 63.9 60 50 Malé Region North Region North Central Central Region South Central South Region Region Region Source: Maldives DHS 2016–17 (MOH and ICF 2018) 47 Under-5 Maldivian children are remote and low population density regions. developmentally on track. According to the The median number of public pre-schools is Early Childhood Development Index, almost 36, with a range of 4 in Malé, where private all children ages 36–59 months are on track sector pre-schools are abundant, to 45 in the for their age in their physical development North-Central Region (figure 3.5). The North (98  percent) and in the learning domain Region, which has the lowest ECD attendance (95 percent) (MOH and ICF 2018). Eighty-five rate, has 42 preschools, well above the percent of 3- to 4-year-olds are on track in the national median of 36, which suggests that literacy–numeracy domain, and 74 percent coverage is not a factor in school enrollment, are on track in the social-emotional domain but attendance and demand-side challenges, (MOH and ICF 2018). Taking all four domains such awareness of the importance of ECD, together, 92 percent of 3- to 4-year-olds are may be. At the same time, nationwide, 70 on track in their development (that is, meeting percent of all pre-schools (public, private and three of the four developmental domains) community) have only 31–50 enrolled students (MOH and ICF 2018). (MOE 2018). With respect to teacher training, in 2018, 89 percent of teachers at the preprimary In terms of access to pre-primary education, level were trained, according to the statistics the Government of Maldives is investing of the Ministry of Education. heavily in early childhood education in Figure 3.5: Distribution of pre-primary public schools across six regions relative to population size, 2020 140,000 Malé 120,000 100,000 Population (2020) 80,000 60,000 South North North Central 40,000 Central South Central 20,000 0 0 10 20 30 40 50 No. of schools (2019) Source: Staff calculations based on population projections from UNFPA, Maldives Population Projections 2014-2054: Assumptions and Results Analysis, and 2020 Ministry of Education statistics 48 Maldives Human Capital Review Unleashing People’s Full Potential Finally, cultural norms in the Maldives of women in the South Region, report that they have a bearing on the education of even have difficulty getting permission from their girls younger than five. Performed almost husbands to go for female genital mutilation- exclusively before age five (83 percent), female related treatment (MOH and ICF 2018). genital mutilation still occurs in the Maldives, albeit with a declining trend (MOH and ICF 2018). Thirteen percent of women ages 15–49 3.2 Human capital challenges and report having been circumcised: 14 percent of drivers during childhood (ages 6–12) women in urban communities and 12 percent Children who make it to their fifth birthday in rural communities MOH and ICF 2018). A in the Maldives have a high chance girl subjected to female genital mutilation goes of enrolling and completing primary through severe initial pain and faces the risk of education. This stage corresponds to Grades infection, hemorrhage, and even death (UNFPA 1 through 7 of primary education (ages 6 to 2020). Throughout her life, she may struggle 12). The Maldives has achieved near-universal with reproductive tract infections, chronic enrollment in primary education, but a small back pain, painful intercourse and a loss of fraction (about 2 percent of children) is still not sexual pleasure, and difficulties in childbirth, enrolled (in 2019) (World Bank n.d.d). The near- among many other risks (UNFPA 2020). She universal enrollment rate at the primary level will be more likely to experience psychological suggests that current primary school coverage illnesses, including post-traumatic stress is sufficient. The median number of primary disorder (UNFPA 2020). The problem persists schools per region is 36, with a range of 14 in partly because 32 percent of women believe Malé to 45 in the South-Central Region (figure that female circumcision is required by Islam 3.6). This suggests that access to primary (MOH and ICF 2018). Additionally, 14 percent education is not a challenge. of women in the Malé Region, and 12 percent Figure 3.6: Demographic distribution of primary schools across six regions 180,000 160,000 Malé Population (2020) 140,000 120,000 100,000 80,000 60,000 South North North Central 40,000 Central South Central 20,000 0 0 10 20 30 40 50 No. of schools (2019) Source: Staff calculations based on Maldives Population Census 2014 and Ministry of Education Statistics 2020 49 However, primary school attendance In 2014, a new national curriculum based and completion rates show a slightly on best practices in education was different story from formal enrollment. introduced, with the objective of improving Although primary school enrollment rates the quality of learning, but it faces multiple are extraordinarily high, attendance remains challenges. For one, islands in the Maldives a battle to securing a decent primary school are scattered across the water, making education for all in the country (UNICEF the improved national school curriculum Maldives n.d.). The primary school net difficult to implement and monitor (UNICEF attendance ratio (NAR) for children ages 2023). So although the Maldives has made 6–12—the percentage of primary-school age progress in rolling out this new curriculum, children actually attending primary school— serious implementation challenges remain, was 94 percent in 2017 (93 percent for girls and especially to the promotion of higher-order 94 percent for boys), with regional disparities thinking skills and the implementation of in NAR ranging from a high of 97 percent in proper classroom-based assessments (World the North Region to a low of 91.9 in Malé, and Bank 2021a). Certain elements necessary for the rate tends to decrease with increasing this reform are still under way, namely, the household wealth (MOH and ICF 2018). The quality of curriculum implementation, teacher primary school completion rate, on the other training, a system for quality assurance, a hand, is lower—92 percent in 2019 (with a system for learning assessment, and programs slight and statistically insignificant deferential for supporting equitable learning, especially to the advantage of females), which is slightly for students with special educational needs lower than the 95 percent average for UMICs (World Bank 2021a). (World Bank n.d.d). The quality of learning at the primary Those who enroll and attend primary education education level also seems to have been do not learn enough. Although the Maldives affected by the restructuring of the HCI findings show high regional disparities, as education system. In 2010, with the objective reflected in chapter 2, the NALO also reveals of universalizing primary and lower secondary poor learning outcomes and, again, high regional education, all 212 primary and secondary disparities. Whereas the completion rate at schools in the Maldives began teaching the primary level is high, NALO results point to Grades 1 to 10 and fully implementing the less than satisfactory learning achievements for new national curriculum (Shafeeu 2019 as many students in language (Dhivehi and English quoted by University of Bristol n.d.). The languages) and in mathematics. This indicates move, however, seems to have changed that many of them are completing primary the school structure. Together with limited school without a solid foundation in literacy and school size, it has necessitated a two-session numeracy skills (World Bank 2021a). Recognizing school system; 7:00am to 12:30pm for lower the importance of learning assessments, the secondary grades (Grades 6 to 10/12) and GoM has recently introduced a key initiative 12:45pm to 5:30pm for primary grades (Grades for developing and implementing NALO as 1 to 5). This two-session schooling system has a standardized assessment administered to had extensive repercussions for the quality children in Grades 4 and 7 in order to assess of school teaching and learning (Shafeeu learning in English language, mathematics, and 2019 as quoted by University of Bristol n.d.). Dhivehi (World Bank 2021a). With respect to teachers’ capacity, most 50 Maldives Human Capital Review Unleashing People’s Full Potential teachers in the country were provided with Maldives and across all education levels lost the necessary training to implement the new at least 4 months of learning. Schools in the national curriculum, with the Central region Maldives were also not well prepared to teach having the highest number of untrained and support learners remotely; teachers, teachers (table 4.1). management, students, and parents/ caregivers all had to adapt without notice to At the same time, social protection an entirely different mode of delivery (UNICEF programs are not properly attuned to and UNESCO 2021). As such, and especially ensuring human capital formation among given the learning-quality challenges that the school-age children.The Maldives social country faced before the pandemic, additional protection system does not address the efforts are needed to reverse learning losses needs and risks associated with school-age and to improve schools’ preparedness for children, such as malnutrition. Programs are, remote learning under any scenario. This however, conditional on school attendance. includes addressing ICT shortcomings, The Maldives can benefit from programs from ensuring that schools are equipped such as conditional cash transfers with with ICT tools and technology, to improving accompanying measures linked to nutrition connectivity, to developing teachers’ and and healthy eating habits, and from school students’ ICT skills. feeding programs that target stubborn nutritional challenges such as anemia and certain vitamin deficiencies. 3.3 Human capital challenges and drivers during Despite the GoM’s exemplary efforts to the adolescence and youth preserve the capacity to learn during the stage (13–18) COVID-19 pandemic, some learning loss Many adolescents and youth in the was inevitable. The government resorted Maldives experience significant human to a number of measures to ensure the capital opportunity losses because of continuation of remote learning, including poor education outcomes. This age group broadcasting classes through TV and the corresponds to lower secondary education internet, resumption of learning when (ages 13–15 attending Grades 8–10), followed schools reopened with phased reopening, by two years of upper secondary education compression of the school curriculum, (ages 16–18 attending Grades 11–12). Low creation of a digital repository of learning school enrollment for both females and materials and lessons, capacity building at males during this stage results in three- the school level, the training of all teachers quarters of Maldivians ages 15 and above in online/blended methods, and improved having achieved only O-levels (equivalent connectivity (UNICEF and UNESCO 2021). to lower secondary education) or below, Schools were closed for a solid period of practically disrupting human capital 3.5 months, followed by a phased reopening accumulation through formal learning (World with intermittent in-person learning based on Bank 2021c). Most Maldivians complete their the number of cases. Although no Maldives- lower secondary education, but fewer than specific data are available on learning loss half go on to upper secondary education, in the country, research in other countries with female NER slightly higher than males’ suggests that a month of school closures (figure 3.7). This reduction in enrollment at led to a month of learning lost (Schady et al. upper secondary level is a grave concern. 2023). This means that children across the 51 Possible reasons are the inability to pass the show that more students are being retained in required necessary exams for admission into school because of the alternative education Grade 11, lack of interest in pursuing further pathways that have been introduced since education, as well as wanting to leave school 2015, mainly through expanding technical (MOE and Global Partnership for Education and vocational education and training 2019). Additionally, the number of students options (MOE and Global Partnership for out of school in the 16–18 year age category Education 2019). remains undetermined, but recent statistics Figure 3.7: Trends in net enrollment rates (NERs) in lower and upper secondary education 100 80 60 40 20 0 2000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NER for Lower Secondary Male NER for Lower Secondary Female NER for Higher Secondary Male NER for Higher Secondary Female Source: Ministry of Education Statistics (2018) At the regional level, students do not enjoy challenges (figure 4.8). Gross enrollment the same access to secondary education. rates at the upper secondary level reflect The Maldives has improved its enrollment dim prospects for Maldivian adolescents, rates in lower secondary education at the with rates as low as 2 percent in the national level, but that composite picture Central Region. hides regional disparities reflecting access 52 Maldives Human Capital Review Unleashing People’s Full Potential Figure 3.8: Subnational gross enrollment ratios (GERs) at the lower secondary education (left panel) and upper secondary education levels (right panel) 105 80 70 100 60 95 50 90 40 30 85 20 80 10 75 0 Male’ North North Central Central South Central South National Male’ North North Central Central South Central South National Both sexes Male Female Both sexes Male Female Source: World Bank staff calculation based on Ministry of Education statistics for 2019 and Maldives population census projections (2014) for the year 2019 School coverage at the upper secondary The geography of the Maldives and the level drops dramatically in comparison inconvenience and cost of sea travel make to primary and lower secondary levels. it harder for students to seek secondary Whereas the median number of lower education on other islands. Access to secondary schools per region is 36, with a education is exacerbated by transport high of 43 schools in each of the North and challenges and limited education opportunities North-Central Regions to a low of 14 schools available outside the Greater Malé area (World in Malé, the median number of upper Bank 2021c). Almost half of the inhabited secondary schools per region is only 15, with islands in the Maldives do not have proper a high of 17 in the North Region to a low of marina facilities. Ferry services to the atolls are only 2 public schools in each of the Central costly and irregular; even though several ferries and Malé Regions, which are the regions are operated by either island communities, with the smallest and highest population private parties, or the Maldives Transport and sizes, respectively (figure 3.9). This practically Contracting Company, the scheduled ferry makes it impossible for adolescents in these services network in the Maldives is still very two regions to continue their education limited. Large distances, lack of economies of unless they migrate to another island, or scale and limited economic activity on remote enroll in distance learning (MOE and Global atolls result in high transport costs. Inter-island Partnership for Education 2019). transport facilities are limited (FAO 2018). 53 Figure 3.9: Distribution of lower secondary (left panel) and upper secondary (right panel) schools across 180,000 180,000 160,000 Malé 160,000 Malé 140,000 140,000 120,000 120,000 100,000 100,000 80,000 80,000 North South Central 60,000 South North North 60,000 North Central 40,000 40,000 Central South Central South Central 20,000 20,000 Central 0 0 0 10 20 30 40 50 0 2 4 6 8 10 12 14 16 18 No. of schools (2019) No. of schools (2019) Source: World Bank staff calculations based on Maldives Population Census 2014 and Ministry of Education Statistics (2018) Male adolescents are also lured by the easy age group for both males (36 percent) and income that can sometimes be made from females (34 percent) (UNODC 2013). illegal activities. Gang activities often provide young men with some income, particularly With respect to spending on education, those engaged in buying and selling drugs, primary schooling constitutes the lion’s share, where earnings can be significantly higher and upper-secondary the lowest percentage. than earnings in the formal sector (El-Horr Although government expenditures on upper and Pande 2016). In Malé, almost 95 percent secondary school have picked up during the of adolescents, in conflict with the law, are past 15 years, it is still only 21.6 percent of the out of school (UNICEF Maldives n.d.). The total government expenditures on education, prevalence of drug use in Malé and the atolls compared to 36.4 percent on primary education was 6.64 percent and 2.02 percent, respectively, (figure 3.10) at a time when UMICs spend an according to a survey conducted in 2011–12, average of 31 percent of total government and drug use was most prevalent in the 15–24 expenditures on education (World Bank n.d.d). Figure 3.10: Education expenditure by levels as a percentage of total government education expenditure 60 40 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Expediture on primary education Expediture on secondary education Expediture on tertiary education (% of government expenditure on education) (% of government expenditure on education) (% of government expenditure on education) Source: World Development Indicators 54 Maldives Human Capital Review Unleashing People’s Full Potential Source: ©Sappasit/Shutterstock For females, social norms related to that they had experienced sexual violence. female mobility and access to SRH Additionally, only 37 percent of married services affect their educational path women ages 15–49 had their requests for and future productivity.Data show that in family planning satisfied (MOH and ICF 2018). 2019 and 2020, 95 adolescent pregnancies were reported as out of wedlock, which is The COVID-19 pandemic shed fresh light high by regional standards, especially given on the role ICT technologies could play in the laws preventing child marriage (UNFPA education and in closing the learning gap 2020). Adolescent pregnancies put girls at in the country. Although several initiatives risk of dropping out of school and suffering on digital skills are reflected in the Maldives diminished employment prospects (UNFPA Strategic Action Plan (SAP) 2019–2023 2020). Prevailing structural and sociocultural and the Maldives Education Sector Plan barriers to access SRH information and 2019–2023, little is known about where services, and females’ experience of implementation stands because statistics gender-based violence, still pose challenges on digital skills proficiency are not available to women attaining their full potential in (World Bank 2021d). The limited availability the labor market and in the public space. of relevant data makes it difficult to provide In 2016, 17 percent of women ages 15– a comprehensive assessment of the level 49 who participated in the Maldives DHS of digital literacy and skills in the Maldives. 2016–17 reported they had experienced Even though internet penetration is higher physical violence, and 11 percent reported than in many countries, and mobile networks 55 and internet services reach every island, those with limited resources. To mitigate this technological infrastructure and access to challenge, an allowance for data charges the internet are not even across the country was provided to parents and teachers to (box 3.3) (World Bank 2023b). Access to support communication, but this made only learning during the COVID-19 pandemic, a small contribution toward the actual costs for example, was reduced, especially for (World Bank 2023b). Box 3.3: Digital infrastructure and skills in the Maldives Over 60 percent of the Maldivian population now uses the internet, from 10 percent in 2006. Although the proportion of internet users per 100 in Maldives is greater than the South Asian and UMIC averages, challenges remain across gender, age groups, education level, and geography. At present, there are still large gaps in digital technology adoption across groups, based on location and level of education. For instance, while 83 percent of households in Malé have access to fixed broadband services, only 51 percent of households in the atolls do. Fixed broadband connection rates in Malé, moreover, are twice as fast. Those who tend to lack internet connection include people in the atolls, women, older adults, and the less educated. Despite its wide geographic dispersion, the Maldives has widespread network coverage. In 2020, 100 percent of the population had 3G and 4G telephone coverage, and 31 percent had 5G coverage by the end of 2020. Maldives needs to address some cross-cutting bottlenecks to further develop its digital economy. In particular, the government should consider taking action to (i) ensure that the digital economy is inclusive for all, regardless of age, geography, gender, or sociodemographic status, through proper access to digital tools and services, (ii) put in place a coordinated institutional strategy for digitizing public services across agencies and levels of government, and (iii) broadly develop digital capacities that go beyond basic digital literacy and include digital innovation and entrepreneurship skills, so that businesses and individuals alike can reap the benefits of the digital economy. Source: World Bank (2021b) 56 Maldives Human Capital Review Unleashing People’s Full Potential Enrollment and completion aside, the several shortcomings, especially in terms of quality and relevance of education is the quality and relevance of content. There another challenge facing adolescents. have been some recent efforts to address this Though lower secondary education is offered gap, with the establishment of a network of job in all island schools, in many of them students centers and several rounds of reskilling and can study only the arts (UNICEF Maldives n.d.). upskilling programs offered by the Ministry Lower secondary education has also been of Economic Development and Ministry of weakened by the 2010 restructuring that was Higher Education. The training programs have undertaken to offer Grades 1–10 in all existing been designed based on market needs and primary schools, which increased access to focus primarily on diving, ICT, and accounting. lower secondary education, as the majority of These TVET programs could benefit from a public schools began teaching Grades 1 to 10 decentralized that addresses local needs for but had adverse effects on the quality of lower accessibility and greater inclusiveness while secondary education (Shafeeu 2019 as quoted also catering to local needs and demands, by University of Bristol n.d.). thereby building employment skills and establishing a stronger partnership with Given the importance of tourism to local industries and businesses (UNICEF and the Maldives economy, technical and UNESCO 2021). A system for standards and vocational education (TVET) and training is quality control is also needed, for example, essential to better align local labor supply because some centers offer ad hoc courses with demand. Yet the sector suffers from (UNICEF and UNESCO 2021). Source: ©Anna Jedynak/Shutterstock 57 3.4 Adulthood stage (19 and older) and implications of the demographic transition The previous sections highlighted the need enrollment ratio (GER) in tertiary education was 34 to build human capital for use in the labor percent, with a GER of 67 percent for females and market. Nevertheless, as the analysis in chapter 2 only 18 percent for males (figure 3.11) (World Bank (specifically, the UHCI results) illustrates, n.d.d). Although this rate is high compared to the inequalities in building human capital translate into average GER in tertiary education in South Asia of poor labor market prospects for many Maldivians. 26 percent (2020), it is significantly low for UMICs, Malé leads the nation with a UHCI of 0.41, all other which average 58 percent (2020) (World Bank regions fall below the national average of 0.37. n.d.d). Limited access to post-secondary schooling outside of Malé because of the centralization of Only a small percentage of Maldivian youth universities and colleges in the capital seems to be who complete secondary education enroll and the main reason for the Maldives’ low enrollment complete tertiary education.26 In 2019, the gross ratio in tertiary education. Figure 3.11: Gross enrollment rates in tertiary education School enrollment, tertiary, female (% gross) School enrollment, tertiary, male (% gross) Source: World Development Indicators Maldivian youth who attempt to put their especially given the youths’ vulnerability human capital to use by entering the labor to high-risk behaviors. Half of the jobs in market face mounting challenges. With a the tourism sector do not go to the local young and expanding workforce, creating population. For Maldivian youth seeking to enough jobs for the youth remains a priority enter the labor market after finishing lower for reaching the goal of fostering inclusion, or upper secondary education or tertiary 58 Maldives Human Capital Review Unleashing People’s Full Potential education, the school-to-work transition the lack of economic opportunities on their is not an easy affair, and many must wait for island of residence, and the lack of suitable opportunities to present moving in and out employment that matches their education or of economic activity in the meantime. They training. Young females mostly mention family face strong competition from foreign labor at reasons, with 50 percent reporting household both the high and low ends of the job skills chores and childcare (World Bank 2017). distribution, a saturated public sector, and Finally, although studying abroad is an option low job creation in the private sector (World for some youth, some research suggests that Bank 2017). As a result, one in four Maldivian girls have fewer opportunities than boys in youth is neither in employment, in education, acquiring tertiary education abroad primarily nor in training (NEET), with rates higher among because of social norms (Chitrakar 2009 as females (figure 3.12). The most common quoted in El-Horr and Pande 2016). reasons male youth give for unemployment are Figure 3.12: Main labor market indicators in the Maldives, 2019 10 Composite rate of labor under utilization 20 14 25 Share of youth not in employment, education or training 30 28 19 Unemplyment rate youth 12 16 6 Unemployment rate 5 5 73 Emplyment-population ratio 43 57 77 Labor force participation 46 60 0 10 20 30 40 50 60 70 80 Men Women Total Source: ILOSTAT (n.d.) Females in the Maldives face even greater calculations). Women, for example, tend to labor market challenges. Even though be more in vulnerable employment. More Maldivian females accumulate slightly more women in the informal sector only means human capital than males, as evidenced that there are more women in vulnerable in national and subnational HCIs, they fare employment than men, that is, without job- poorer than males in labor market utilization security, protection and benefits (figure (as discussed in chapter 2, under UHCI 3.13). The number of women in vulnerable 59 employment has increased as more women of the Maldives (2022), involvement in primary were pushed into the informal sector during activities such as fisheries and agriculture, or the COVID-19 pandemic. A rapid assessment in secondary activities such as manufacturing of the impact of the pandemic on the and construction, or in any type of self- informal sector in the Maldives found that the employment, is associated with a higher prevalence of informal sector employment incidence of poverty (World Bank 2022d). was higher among women (59 percent) than The assessment also found that workers men (41 percent) across all age groups (UNDP in informal employment are twice as likely 2022). At the same time, fewer wage-earning to be impoverished than those in formal women means greater vulnerability to shocks, employment (World Bank 2022d). These with 71 percent of informal sector workers are sobering statistics given the increasing reporting they had higher earnings before number of female-headed households: 35 the pandemic (UNDP 2022). According to the percent in 2009 and 44 percent in 2017 (World World Bank’s most recent poverty assessment Bank 2022d). Figure 3.13: Employment along gender lines (modeled ILO estimates), 2019 Self-employed, male (% of male employment) 20 Self-employed, female (% of female employment) 35 Wage and salaried workers, male (% of male employment) 80 Wage and salaried workers, female (% of male employment) 65 Vulnerable employment, male (% of male employment) 15 Vulnerable employment, male (% of male employment) 33 0 50 100 Source: World Bank databank based on modeled International Labour Organization estimates Maldivian females are not all equally then services, and then public administration reaping the benefits of the country’s sector, respectively, which are not growth growth drivers. Despite being recognized drivers (World Bank 2017). In 2014, about 30 as the most emancipated women in South percent of all employed male youth worked in Asia, there are far fewer women in the tourism tourism, compared to only 5 percent of young sector than men. The greatest numbers of women (World Bank 2017). women work in the education, then trade, 60 Maldives Human Capital Review Unleashing People’s Full Potential Job opportunities and choices for women to be providing young Maldivians with skills are severely limited by the restrictions that are in demand in the labor market (World imposed by the familial division of labor and Bank 2017). With the high-end tourism sector by religious norms. According to the 2014 following an enclave-based model that is Maldivian Population and Housing census, reliant on FDI and foreign labor, forward and domestic chores are identified as one of the backward links between tourism and the local primary reasons for the high unemployment rate economy are limited (World Bank 2017). among women, which speaks to the gendered division of labor and the unwillingness to The Maldives is undergoing a dramatic transform the status quo. Research conducted demographic transformation, with the in 2016 shows a reduction in Maldivian women’s population expected to age rapidly over the occupational mobility compared to the past, next three decades. According to population despite booms in economic activities related projections by the Maldives National Bureau to guesthouse tourism, which do not require of Statistics, about 7 percent of the resident physical movement to resort islands (Lama Maldivian population will be 65 or older in 2030, 2018). Most females are engaged in low-paying and this share is projected to reach 14 percent jobs such as cooking, washing clothes, or by 2050 (National Bureau of Statistics 2018). making thatched roofs for resorts, restricting The country has comparatively low adolescent their physical mobility within the confines of their fertility rates and little disparity in terms of sex homes. This means that the type of engagement ratio at birth. The ratio of working-age individuals women have with the tourism industry constricts to dependents in Maldives reached its expected their mobility and reinforces their confinement peak at 2.9 in 2020 and is projected to decline to the household (Lama 2018). Gender-based in the coming years to 1.7 in 2050. violence, on the other hand, ranges from emotional abuse and controlling behavior to The steep increase in the aging population unsolicited sex or physical or sexual violence, means more expenditure on old-age with grave and long-term effects on women. In protection services, including health and a 2016 nation-wide survey on violence against social care support. The social protection women, almost 20 percent of respondents to system currently provides a generous non- indicated that they have experienced either contributory pension to the elderly, but physical or sexual intimate partner violence (Fulu this program is not sustainable and, as 2016). These findings are in line with statistics beneficiaries increase in number, its fiscal from the 2016/17 Maldives DHS, with the highest burden will increase. With the increase in life incidence in the Central Region. expectancy and lower fertility rates, and the pattern of internal rural–urban migration, the Although tourism continues to be the main country can benefit from re-skilling programs engine of economic growth, the sector that help seniors remain economically and offers limited employment for the local physically active and reduce their dependency, population. At a time when the country in addition to revisiting the benefit level of the is experiencing the biggest bulge of its existing social pension program in a manner working-age population (WAP), the tourism that improves its sustainability. sector offers few employment opportunities for a young and expanding demographic, At the same time, the rise of noncommunicable with high reservation wages. This is despite diseases in the Maldives increasingly anecdotal evidence pointing to challenges in threatens the ability of the WAP to fully reap the education system, which does not seem the returns on their human capital. In 2019, 85 61 percent of deaths were from noncommunicable percent of women have high blood pressure. diseases, compared to an average of 65 percent The high prevalence of obesity, diabetes, and in South Asia (World Bank n.d.d). Chronic hypertension is related to lifestyle-based risk noncommunicable diseases (NCDs) have factors. In 2020, 35.6 percent of men in the become the major cause of morbidity and Maldives were smokers. On average, Maldivians mortality in the Maldives, triggered by changes eat vegetables only three times in a week, in nutritional habits that have dramatically significantly lower than nutrition guideline increased the prevalence of excess weight and recommendations. To combat the growing NCD hypertension (Cazzaniga et al. 2022). The 2021 burden, the government has launched various Global Nutrition Report shows limited progress health-promoting lifestyle programs, targeting toward achieving diet-related NCD targets, and tobacco, sugary drinks, nutrition, and physical no progress toward achieving the target for exercise. In 2022, the GoM launched the National obesity, with an estimated 11.4 percent of adult Multi-Sectoral Action Plan to control NCDs in women and 5.8 percent of adult men living with collaboration with the World Health Organization obesity. The prevalence of obesity in Maldivian and the Maldives National University. The aging women is higher than the regional average of demographic trend will also result in increased 8.7 percent, but the prevalence in Maldivian demands on the healthcare system due to the men is lower than the regional average of 6.0 expected increasing prevalence of NCDs as percent. Diabetes affects 10.7 percent of adult the population ages, adding more strain to an women and 11.1 percent of adult men (World already burdened and inefficient health sector. Bank n.d.d). Around 21 percent of men and 27 Figure 3.14: Maldives population structure by 5-year age group, 2022 75 or older 7,582 70-74 4,849 65-69 8,410 60-64 13,924 55-59 16,804 50-54 22,579 45-49 28,690 40-44 42,174 35-39 63,174 30-34 70,817 25-29 65,445 20-24 38,440 15-19 28,647 10-14 37,682 5-9 35,697 0-4 30,310 Source: Maldives Population and Housing Census 2022 Provisional Results 62 Maldives Human Capital Review Unleashing People’s Full Potential The demographic shift will, undoubtedly, by the employers. Policies that support job also put substantial strain on the Maldivian creation and private-sector development labor market. Although the construction and (with better skills matching) will become even tourism sectors have been the main drivers more important as the old age dependency of economic growth, both sectors typically ratios change, and the children of today will rely on foreign workers. The rapid growth have to shoulder the burden of caring for a of high-end tourism services has outpaced vast elderly demographic. In this respect, the the capacity of the Maldivian labor market emergence of a buoyant guesthouse segment to provide the internationally competitive is a promising step. technical, vocational, and soft skills required Figure 3.15: Male and female employment by economic sector, 2019 (modeled ILO estimates) 80 70 Share of total employment (%) 60 50 40 30 20 10 0 Agriculture Industry Sector Services Male Female Source: World Bank (n.d.d) 63 Source: ©MikeDotta/Shutterstock Chapter 4 Overview of the Education, Health, and Social Protection Sectors Addressing some of the remaining education, In the education sector, as in health and health and labor market challenges Maldives social protection, there is no one-size-fits-all is facing demands effective and efficient solution. However, certain characteristics enable delivery of services, which in turn requires and promote education trajectories that ensure a renewed attention to strengthening human student learning. Although school enrollment is development systems and social sector a necessary condition for generating learning, spending. This chapter provides an overview it is not a sufficient one. Quality of learning is of the education, health, and social protection essential, and an effective education system sectors in Maldives. It will delve into the drivers measures, monitors and reforms learning and challenges of building human capital through the design and regular implementation throughout the life cycle upon the foundation of standardized evaluations. Test results are of functioning, efficient delivery systems and needed to guide policy design and evaluate social sector spending. its effectiveness, align incentives among the different stakeholders, implement improvement plans at the school level, and hold education 4.1 The importance of service providers accountable. All the inputs of an delivery for human capital effective education system, from technology accumulation and utilization to the national curriculum, must be linked and aligned with student learning. Moreover, Achieving good education and health effective education systems should also have outcomes requires effective and efficient elements specifically designed to address the delivery of services particularly to the poor participation and learning constraints faced by and vulnerable population who have limited girls and women, including tailored curricula, means to complement the services received teacher training, links with the social protection through individual investments. In Maldives, system, and better links with trainings (including geographical disparities in outcomes reflect TVET) and the skills the job market demands. even greater challenges in service delivery. 65 In the health area, an effective healthcare 4.2 Overview of the system should ensure accessible, affordable, high-quality, and safe services, education sector as well as a network of healthcare facilities The Maldives has a well-established general that guarantee access. A well-functioning education system that aims to deliver healthcare system responds in a balanced way 14 years of free education. Children in the to a population’s needs and expectations by Maldives benefit from universal access to (i) improving the health status of individuals, primary and lower secondary education—and families and communities; (ii)  defending the participation in lower secondary education is population against what threatens its health; well above predicted levels for the country’s (iii) protecting people against the financial per capita income. Net enrollment at the consequences of ill health; (iv) providing primary and lower secondary levels is near- equitable access to people-centered universal. This is particularly remarkable at care; and (v) making it possible for people the lower secondary level, where participation to participate in decisions affecting their rates were much lower just a decade ago. health and the healthcare system. Keeping In 2009, for example, the NER at the lower healthcare systems on track requires a strong secondary level was 84 percent (MOE 2020). sense of direction and coherent investment Moreover, these levels are above those in the system’s various building blocks: predicted for the country’s income level and governance, human resources, financing, those of most small-island states, including technology and information systems, and states with much higher per capita incomes service delivery. (World Bank 2021a). In social protection, robust and resilient In contrast, enrollment drops sharply at delivery systems are critical to ensure the higher secondary level, putting the all poor and vulnerable have access to Maldives behind most of its economic timely and quality services. Robust social peers and all other SIDS; with significant protection systems assist individuals to gender disparities (albeit favoring females) manage risks and volatility, protect them in higher secondary access. Net enrollment from poverty and inequality, and help them in higher secondary education drops sharply to access economic opportunities. Social to 44.5 percent (MOE 2019). This is well below protection systems enable the effective and the average for UMICs—at about 82 percent efficient delivery of programs across social (UNESCO 2020). This rate is also lower than assistance, social insurance and labor predicted for the country’s level of per capita markets. In Maldives, having an adaptive social income, and well below that of all SIDS, protection system is particularly important including some that are substantially poorer given the country’s high exposure to shocks. such as Belize, Cabo Verde, Dominica, and Indeed, an adaptive social protection system St. Lucia (World Bank 2021). As in many other can rapidly provide assistance to affected countries, a gender gap emerges in favor of populations in the aftermath of a shock, females at higher levels of the education which is critical to protect and restore system, where the NER for females stands at human capital. 50 percent, in contrast to an NER of 39 percent for males (MOE 2019). 66 Maldives Human Capital Review Unleashing People’s Full Potential The quality of education is another key the GER in tertiary education is approximately challenge for the Maldives, as evidenced 34 percent (World Bank 2023a). These levels by uneven progress on the most recent exceed the South Asia average (26  percent) national assessment of learning outcomes but is low compared to the average for (NALO), as well as the national and middle-income countries (38 percent), for subnational HCI findings. The Maldives has UMICs (approximately 54 percent), and for implemented a standardized assessment of high-income countries (80 percent) (World learning outcomes for Dhivehi (the national Bank 2023a). In line with global trends, there language), English, and mathematics, is also a significant gender difference in administered at the end of two key stages— enrollment, with females enrolling at much Grades 4 and 7—in the national curriculum higher rates than males (67 percent females framework. A review of the results over time vs. 18 percent males) (World Bank 2023a). indicates a downward trend in performance The relatively low enrollment rate in higher in mathematics for both Grade 4 and 7, with education has been attributed to the dual a decline of approximately 5 percentage challenge of limited access to higher (tertiary) points in Grade 4 mathematics, from 57.50 to education opportunities and low enrollment 51.1 percent, and a decline of 3 percentage in higher secondary education. points in Grade 7 mathematics, from 44.6 to 41.1 (NALO 2021). In Dhivehi, there is a downward trend at the Grade 4 level (from 4.2.1. Financing 62.2 in 2015 to 52.75 percent in 2021) and In the past, the Maldives invested a slight upward trend at the Grade 7 level significant public resources in education, (from 56.76 in 2015 to 58. 11 in 2021) (NALO but over time, the level of investment 2021). There is a promising upward trend in has declined and plateaued. In the early English performance for both Grade 4 (from 2000s, Maldives’ average public expenditure 52.9 in 2015 to 57.54 in 2021) and Grade 7 on education was 18.4 percent of the (from 51.10 in 2015 to 60.91 in 2021) (NALO government budget, or over 5 percent of 2021), possibly reflecting the much greater GDP. However, in the 2017–2019 period, consumption of English-language material spending averaged 4 percent of GDP (World on the internet by young students and their Bank 2019). Today, even though the GoM’s greater participation in English-language expenditure on education still exceeds that conversations on social media, these days of its regional counterparts, the Maldives lags starting from a very young age. Still, as the other UMICs and SIDS in education spending latest NALO results indicate, there is no as a proportion of GDP. As a percentage clear improvement in education quality over of the government’s budget, the country time and, if anything, the trend (other than in spends about 11.9 percent on education English) seems to be downward. (World Bank 2023c). Again, this surpasses the average spending in the SAR (which stands Enrollment rates in higher education have at 10.6  percent) but falls short of the level steadily increased over time but still fall of other UMICs (at 15 percent) (World Bank below international levels. An increase in 2023c). International norms suggest a range demand for higher education has led to a of 4–6 percent of GDP and 15–20 percent steady increase in the gross enrollment ratio of the government’s budget as a benchmark (GER) in higher education, from 6 percent for sound education spending. The Maldives in 2001 to 10 percent in 2005, and to 21 falls short of both these benchmarks. percent in 2011. The latest data show that 67 Figure 4.1: Expenditure on education (as a percentage of GDP) 5.0 4.2 4.1 4.2 4.1 4.1 3.9 3.8 4.0 4.0 4.0 4.0 Education Expenditure (% of GDP) 3.6 4.0 3.3 3.4 3.9 3.9 3.9 3.1 3.7 3.0 3.4 3.5 3.1 3.1 2.8 2.8 3.0 2.9 2.9 2.7 2.5 2.0 1.0 0.0 2010 2011 2012 2013 2014 2015 2016 2017 20181 2019 Maldives South Asia UMICs Source: Authors, based on World Bank 2023. councils and were offered primarily through 4.2.2. Institutions community and private schools.19 With the implementation of the 2012 Preschool General Education Administrative Act, which provisioned access There are roughly 348 schools, catering to two years of free pre-primary education to to nearly 89,500 children (and most of children ages 4 and 5, responsibility of pre- them offer different stages of schooling. primary education was placed under the Approximately 82 percent of students attend Ministry of Education with an objective to ensure 213 government schools (National Bureau of more effective and systematic management Statistics 2020). The other 18 percent attend and support (MOE 2019). This led to a reduction either community, public–private partnership, of central government support to community or private schools. General education schools administered by the island councils, comprises four stages: pre-primary (nursery, and integration of pre-primary classes into the lower kindergarten, upper kindergarten, ages existing government primary and secondary 3–5); primary (Grades 1–7, ages 6–12); lower schools on all the islands except Malé. secondary (Grades 8–10, ages 13–15); and higher secondary education (Grades 11–12, Access to pre-primary education is ensured ages 16–17). on all inhabited islands, and nearly all children enter Grade 1 with a pre-primary education Pre-primary education is offered through background. In 2018, there were 20,411 children a network of government, community, and ages 3–5 years enrolled in pre-primary private schools. Before 2016, pre-primary education, of whom 47 percent were enrolled education was the responsibility of island in government schools, 35  percent in private 19 Under the Decentralization Act (2010), responsibility for pre-school service delivery was placed on the councils. 68 Maldives Human Capital Review Unleashing People’s Full Potential schools, and 18 percent in community schools. Technical Education and Of the new entrants to Grade 1, 99.6 percent of children had attended pre-primary. Vocational Training (TVET) and Higher Education Although access has been maintained over The TVET system in the Maldives is at a time, the provision of adequately trained developmental stage, combining various pre-school teachers in government schools approaches ranging from standalone in the outer atolls needs to be improved. In institutional provision to the integration of 2018, there were 1,339 pre-school teachers technical and vocational education streams in spread across 325 schools. About 11 percent the secondary school system. TVET is widely of them were untrained, all of whom were in recognized as an important tool for productivity the outer atolls. The overall student–teacher enhancement; and there is a well-established ratio (STR) in pre-school education is 15:1, correlation in several countries between the which, although low by international standards, proportion of TVET students at the post-secondary is unevenly spread across the country. For level (tertiary) and per capita income (Pavlova example, among government schools, the STR 2014). The GoM recognizes this and has made is much higher (18:1), compared to just 13:1 some progress in developing its TVET system for private and community schools. Similarly, with a multi-pronged approach. Institution-based private and community schools on average public provision of TVET is delivered through have more than double the number of teachers the Maldives Polytechnic (MP), which is under compared to government schools (MOE 2018). the purview of the Ministry of Higher Education. The MP is committed to providing free training The Maldives’ ability to recruit and retain and skills development to all qualified citizens qualified local teachers has been a significant regardless of age, sex or social status. There are constraint on its efforts to improve education also several private institutional providers. TVET quality. The quality of teachers is perhaps the is also integrated into the secondary education most crucial variable in the education quality system, through the Business and Technology equation. Recruiting and retaining qualified Education Council (BTEC) program, introduced teachers has proven to be a long- standing in 2014 (MOE 2019). BTEC is an international challenge for the Maldives—particularly in the qualification offered in schools as an alternative more geographically remote islands (World Bank to the more academically oriented International 2011). The GoM, however, has made a concerted General Certificate of Secondary Education effort to ensure that there are adequately trained (IGCSE) and General Certificate of Education teachers in the education system. As a result, (GCE) Ordinary Level courses, and the GCE the number of untrained teachers has dropped Advanced Level course. BTEC is offered as a from 23  percent in 2002 to 6 percent in 2018 stream subject when students join Grade 9 after (MOE 2019). Still, a shortage of qualified teachers completing Key Stage 3 (Grade 8). As of 2019, has meant that the Maldives has long relied on there were 179 schools offering BTEC O-Level expatriate teachers. Although the reliance on them and 44 schools offering BTEC A-Level programs has lessened over time, expatriate teachers still (MOE 2019). Another school-based TVET make up about 20 percent of the teacher cadre program is Dhasvaaru, a government initiative in government schools and an even greater share aimed at providing an alternative path for at the secondary school level: approximately 43 vulnerable students to augment their possibility percent of teachers at the lower secondary level, of employment or further studies after school. and 46 percent at the higher secondary level, are Dhasvaaru is offered to students in their final year foreigners (World Bank 2021). of secondary school (MOE 2019). 69 Source: ©pisaphotography/Shutterstock Although the government has made in TVET programs would be an important progress in expanding TVET, access step in decreasing the gender gap in labor to and equity in its provision remain a force participation. significant challenge. Overall enrollment in TVET has risen substantially because of The quality and relevance of TVET is also the mainstreaming of TVET programs into constrained by the government’s capacity the secondary school system. Still, there are to enforce standards and properly regulate clear disparities in access to TVET between the sector. Although the Maldives has a Malé and other atolls—student enrollment standards and regulatory framework in place rates in TVET are about the same in Malé for TVET provision, the capacity of the Maldives as in all the other atolls combined, even National Skills Development Authority though 62 percent of the population live in (MNSDA), the main agency responsible for the atolls with significant gender disparities regulating the TVET, is limited.20 Improvement in access to TVET, along with low enrollment in the quality of TVET requires, among other and high dropout rates of females (MOE things, a systematic process of developing 2019). Increasing the participation of women and maintaining occupational standards 20 The TVET authority (TVETA), established in 2011 under the Ministry of Education, was reconstituted as MNSDA under the Higher Education and Training Act in 2021. 70 Maldives Human Capital Review Unleashing People’s Full Potential and related assessment and certification 4.2.3. Strategies and programs processes to ensure the quality of training and assessment and to strengthen links with Recognizing the important role education industries to align the training with evolving plays in developing human capital, the GoM market needs. Additionally, there are a wide has undertaken a series of reforms and number of TVET providers in addition to policy measures aimed at improving both the government, creating another set of access to, and the quality of, the education challenges for enforcing existing standards system. The “No Child Left Behind” policy (MOE 2019). Weak targeting and adaptation framework, launched in 2013, articulates of TVET programs to local needs is another the government’s commitment to 14 years serious quality challenge. As the Maldives of free education, starting with pre-primary looks to develop its human capital, addressing education at age 4 (MOE 2019). With this the equity gaps, increasing access and initiative, the government has affirmed the improving the relevance and quality of TVET importance of leveling the playing field from programs will be an important element of its the early years by integrating pre-primary human capital development strategy. education into the free public education system, thereby increasing access to pre- Diversification and relevance are also primary education for all children. Before this, serious challenges for the higher pre-primary education was delivered largely education system. The Maldives has a through private and/or community schools considerable number of students who go (MOE 2019). Other initiatives under this abroad for higher education. The reasons umbrella include those aimed at improving for this are varied, but perceptions of quality the country’s TVET system and programs that appear to play a significant role (World offer some form of education to children with Bank 2011). A limited number of domestic special needs. To further promote equity, degree-granting programs, along with a the MOE has also launched a multi-grade limited choice of study options, also play teaching strategy to address the challenge a role. As discussed, the government has of low student enrollment and small student attempted to address some of these supply- populations in schools in remote atolls that side constraints by establishing two degree- have a wide grade and age range. This strategy granting universities. Still, diversification (that deploys additional investments in classroom is, expanding the range of higher education setups, in ICT, and in targeted in-service programs) remains an issue. For instance, teacher training for approximately 41 schools although there are many programs offered in (MOE 2019). Business, Administration and Law, there are comparatively few in Agriculture, Fisheries, or In 2015, the Maldives launched a Veterinary science—even though fishing is a comprehensive national curriculum major source of income (MOE 2019). Higher framework reform as well as the NALO, education courses need to be designed and both aimed at improving the quality of developed in diverse areas that will help education, but challenges remain in the students develop the skills and competencies effective implementation of the new required for an increasingly knowledge-driven curriculum. The new curriculum framework local and global economy. is a sweeping reform designed to revamp the curriculum for all grades, and to improve expected learning outcomes, key skills, and core competencies (MOE 2019). The reforms 71 were aimed at increasing the curricular focus was launched in 2001 by the Maldives on developing higher-order cognitive skills in Qualifications Authority and has been refined line with global best practices. Teaching and multiple times since then. It is designed to learning materials, teacher training programs, bring all recognized qualifications into a single and pedagogical approaches were also unified structure, with procedures to support overhauled as part of the reform (MOE 2019). and facilitate the development of a quality At the same time, the country launched its first assurance mechanism for postsecondary NALO with the aim of providing feedback on education and to provide a framework to help the quality of learning outcomes for Grades 4 employers easily recognize the qualifications and 7 in English, Mathematics, and Dhivehi. offered in the Maldives and abroad. NQFs are The NALO has been administered in 2015, generally designed with the aim of raising skill 2016, 2017 and 2021. The lack of improvement levels and improving the relationship between in learning outcomes, as suggested by the education, training, and work (Allais 2017). recent 2021 NALO results, indicates that the However, even though the MNQF has been new curriculum is yet to produce the expected developed, other supportive aspects of the improvement in learning outcomes. To further higher education regulatory framework, such support quality enhancement, a Quality as the human resource capacity of the MQA to Assurance Department was established in manage the MNQF, also need to be developed 2015 in order (i) “to understand the findings further (MOE 2019). and recommendations of the external school reviews and the NALO results, (ii) to develop The creation of new alternative paths to or reorient appropriate policies and actions higher secondary and higher education to improve education service delivery at the has increased participation levels, but classroom level aiming toward improved high dropout and low completion rates at and equitable learning outcomes” (MOE higher levels continue to be an issue for 2019). Although Maldives has introduced a human capital development. There are two TIMSS module in its national assessment major public examinations in the education program, it has not yet participated in any system. At the end of lower secondary international assessments, which will be an education, students sit the GCE Ordinary important next step in benchmarking the Level examinations, the IGCSE, or the Senior quality of its education system against that of Secondary Certificate (SSC) examinations. other countries.21 Then at the end of the two-year higher secondary education stage, they sit the GCE Maldives has also established a National Advanced Level examinations, or the Higher Qualifications Framework (MNQF) to Secondary Certificate (HSC) examinations, synchronize education qualifications in a to qualify for entry into higher education. The unified structure, facilitate internal quality government requires five or more O-Level assurance, and provide a framework passes (a pass is a minimum of a C grade) for linking education and training more for entry into the higher secondary level. closely to the labor market, but the utility Students who complete lower secondary of the framework is constrained by gaps education but are not inclined or able to in the regulatory infrastructure. The MNQF complete traditional higher secondary 21 The 2021 NALO included Grade 4 TIMSS Math items. 72 Maldives Human Capital Review Unleashing People’s Full Potential Source: ©Fotopogledi/Shutterstock education can join vocational streams and proper intervention are necessary if such as BTEC. Essentially, a student who the country is to fulfill its human capital participates in the BTEC program and development goals. achieves a Level 4 has completed the equivalent of a higher secondary education Maldives is seeking to modernize and diploma and is positioned to qualify for entry develop its higher education system in into higher education. As an alternative the face of rising demand, but quality- path to entry, students who are at least 18 controlled expansion poses a major and have a minimum of one year of work challenge for the system. Demand for experience are eligible to enroll in higher higher education has been rising, evidenced education programs (MOE 2019). These by a steady increase in enrollment rates over alternate streams have facilitated increased time. Moreover, as the economy modernizes, participation in higher secondary and employers are also increasingly seeking higher education, but low completion and more sophisticated skills that require higher graduation rates from the upper secondary education. The country’s higher education level and from higher education are still system consists of three types of institutions: compromising human capital development Tier I: Universities (government-funded), Tier in the country. Further analysis of this issue II: Degree-Granting Colleges/Institutions (few 73 government-based, mostly private sector- because of gaps in human resource capacity based), and Tier III: Training Institutions and training to deploy the system (MOE 2019). (offering short-term programs, some in the In 2016, the Maldives also implemented an government sector but the majority in the attendance policy—leading to a reduction in private sector) (MOE 2019). To increase the school absenteeism by 30 percent in the first public share of growth in higher education, two months of its introduction. The policy the GoM established the Maldives National has also helped communities to track out- University, and the Islamic University of the of-school children (MOE 2019). The MOE Maldives through legislation in 2011 and 2015, also conducts a risk assessment for Grade respectively. Additional demand has led to a 1 students as an early-warning measure to sharp rise in the number of higher education identify students at risk of failing in school providers, and as a result, besides the above- and to provide early intervention. As of 2019, mentioned institutions, there are more than approximately 6,616 students have been 200 private institutions offering courses up assessed as being at risk; 92 percent of them to diploma level in various fields throughout have received support and have been moved the country. This, however, has created a to the zero-risk category (MOE 2019). High fragmented and dispersed sector in need of primary and lower secondary completion greater, more uniform regulation. rates, and the reduction in the number of out-of-school children (OOSC), indicate that the system’s efficiency is clearly strong at Efficiency of the 4.2.4. lower levels. education system and transition to the labor market Still, the sharp drop in the higher secondary NER, and low enrollment, retention, The Maldives has several mechanisms to and completion rates both at the higher monitor and improve the education system secondary and tertiary levels, signal that that have proven useful for promoting the system is less efficient at higher levels— efficiency at its lower levels. Maldives and that it poses a serious challenge for Education Management System (MEMIS) human capital development. As previously is the primary tool the Maldives uses for discussed, the NER drops sharply at the monitoring and reporting all education- higher secondary level, from essentially 100 related data. Launched in 2017, it allows percent at the primary and secondary levels the Ministry of Education to collect and to 44.5 percent at the higher secondary level. analyze data from schools, teachers and In 2018, the NER at the upper secondary students in real time. It provides schools level was 44.5 percent (50.4 percent for with a complete data management system girls, 38.9  percent for boys). These upper that enhances the efficiency of school and secondary enrollment rates are below those central-level management (MOE 2019). To of small-island nations and other countries in ensure that all children of school age are the region that have lower per capita income enrolled in schools, MEMIS is updated with than the Maldives. Moreover, there is a large records from the Department of National gap in the number of students who pass the Registration. MEMIS is also used to monitor O-levels and those who go on to sit for the and track services for children with special A-level examinations. Additionally, students needs. However, the utilization of MEMIS who exit the system at the secondary level is still at a developmental stage—mainly or at the higher education level are among 74 Maldives Human Capital Review Unleashing People’s Full Potential the youngest in the workforce—indicating 170,000 expatriates in its labor force—mainly a serious loss in terms of human capital in tourism, banking, finance, construction, development (MOE 2019). trade and shipping, and education (MOE 2020). This speaks to the shortage of Maldivians with The mechanisms for establishing effective the skills to fill available jobs. This mismatch links between industry and training are would seem to suggest that employers in weak, at best. No systematic training needs these key sectors are looking for “soft skills” assessment is conducted to align courses that young labor market entrants lack in the and priorities in the higher education sector Maldives (World Bank 2014). Two decades with the needs of the labor market in a way ago, manufacturing provided the most that ultimately facilitates a demand-driven employment opportunities for Maldivians. higher education system (MOE 2019). Not Now, tourism has taken over as the highest only is there an absence of any systematic, source of employment opportunities. But large-scale assessment of training needs, more than half the workforce in this sector are but other mechanisms such as Employment expatriates (Thashkeel 2018), suggesting that Sector Councils (ESCs) need to be further the education and training systems are unable strengthened and sustained. Reestablished to produce workers with the necessary skills in 2021 under the aegis of MSNDA, the six to satisfy employment needs. ESCs—Tourism, Fisheries and Agriculture, Transport, Social, ICT and Construction—are expected to identify the skill requirements 4.3 Overview of the health sector within their relevant sectors. Mechanisms The Maldivian health system has far to support close links between industry outperformed nearly all its South Asian and training need to be developed and neighbors in health outcomes. Maldives is strengthened to ensure that the higher also the only South Asian country to have education and post-secondary training achieved all of its health-related Millennium systems are adequately equipping students Development Goals (MDGs) and mortality- for the labor market. based Sustainable Development Goals (SDGs) ahead of time (World Bank 2022g). The large number of expatriates employed in prominent sectors such a tourism points With over half a million people, the to the challenge the Maldives faces in Maldives has made impressive progress in producing human capital with the skills improving its health sector indicators over and competencies to meet the demands of the past several decades. Infant mortality its growing economy and compete in the rates declined by more than 90 percent global economy. In 2018, the government between 1990 and 2021, from 63 to 5 per 1000 produced a skills shortage list, identifying over live births, respectively. The country has also 300 areas that had insufficient numbers of significantly reduced maternal mortality, with skilled locals. As of 2019, the unemployment rates halving between 2000 and 2017, from rate stood at approximately 3 percent and 125 to 53 per 100,000 live births. Additionally, an additional 6 percent are in the potential immunization coverage and institutional labor force (Maldives Bureau of Statistics births are close to 100 percent, indicating 2019). In other words, in all, approximately that the country provides adequate access to 9  percent of the labor force is underutilized. essential healthcare services. The incidence At the same time, the Maldives has more than of tuberculosis is low, with only 38 cases per 75 100,000 people in 2021, and stunting among levels of economic development (figure 4.3). children under 5 is at 14.2 percent as of As in other UMICs, the key health challenge 2020, a decrease from 19 percent in 2009. is noncommunicable diseases (NCDs), In 2020, expected life expectancy at birth which account for 80 percent of all deaths reached 80 years, and the under-5 mortality and 73 percent of the burden of disease as rate was 6.4 per 1,000 births, both figures measured in disability-adjusted life years outperforming most regional peer countries (or DALYs). and global comparator countries with similar Figure 4.2: Life expectancy at birth and the under-5 mortality rate (global comparisons), 2020 85 Maldives Mortality rate, under-5 (per 1,000 live births) 100 80 Life expentancy at birth (years) Sri Lanka 75 75 Bangladesh Pakistan Bhutan Afghanistan 70 Nepal India 50 Pakistan India Bangladesh 65 Afghanistan 25 Nepal Bhutan 60 Sri Lanka 0 55 Maldives 250 500 1000 4000 12000 35000 100000 250 500 1000 4000 12000 35000 100000 GNI per capita, US$ GNI per capita, US$ Source: Global Health Expenditure Database (n.d.) With a high life expectancy and yet points to the need for Maldives to address relatively young population, Maldives is its ongoing demographic transition, which in the midst of a demographic shift, and is expected to result in increased demand the population as a whole is expected to for healthcare because of the expected age over the next three decades. In 2020, growing prevalence of NCDs in an aging the population pyramid had a broad bulge of population. Compounded with increasingly young adults, indicating a high proportion of unhealthy lifestyle choices such as smoking, younger individuals and a low proportion of consumption of sugary drinks and processed the elderly (figure 4.3). However, projections foods, and low intake of vegetables and fruits, indicate that, by 2050, the pyramid is expected Maldives’ demographic transition will further to become more rectangular, reflecting exacerbate its NCD burden. an aging population structure. This trend 76 Maldives Human Capital Review Unleashing People’s Full Potential Figure 4.3: Projected changes in Maldives’ population pyramid between 2020 and 2050 Maldives 2020 Maldives 2050 Population 514,438 Population 569,909 Age Male Female Age Male Female 100+ 0.0% 0.0% 100+ 0.0% 0.0% 95-99 0.0% 0.0% 95-99 0.1% 0.1% 90-94 0.1% 0.0% 90-94 0.3% 0.3% 85-89 0.2% 0.1% 85-89 0.8% 0.7% 80-84 0.3% 0.3% 80-84 1.5% 1.2% 75-79 0.4% 0.4% 75-79 2.3% 1.7% 70-74 0.5% 0.5% 70-74 3.5% 2.3% 65-69 0.8% 0.7% 65-69 5.3% 3.3% 60-64 1.5% 1.2% 60-64 6.8% 4.0% 55-59 2.0% 1.6% 55-59 5.4% 3.6% 50-54 2.6% 1.9% 50-54 3.1% 2.7% 45-49 3.4% 2.3% 45-49 1.9% 2.0% 40-44 4.6% 2.9% 40-44 2.6% 2.5% 35-39 6.7% 4.1% 35-39 3.5% 3.2% 30-34 8.4% 4.8% 30-34 3.4% 3.3% 25-29 7.0% 4.5% 25-29 3.1% 2.9% 20-24 4.6% 3.6% 20-24 2.5% 2.3% 15-19 3.2% 2.8% 15-19 2.2% 2.0% 10-14 3.5% 3.2% 10-14 2.2% 2.1% 5-9 4.0% 3.6% 5-9 2.4% 2.3% 0-4 3.8% 3.7% 0-4 2.5% 2.4% 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% Source: PopulationPyramid.net (n.d.) 4.3.1 Health financing Per capita spending on healthcare in to services and economies of scale. In addition, Maldives far outstrips and, indeed, dwarfs the healthcare system has high transport costs average per capita expenditure in other and relies heavily on a revolving door of foreign South Asian countries (figure 4.4).Although health workers with high turnover. (In 2019, 64 this does reflect the government’s high percent of medical doctors and 42 percent of commitment to health, the high costs are also nurses in the country were expatriates.) This driven by the country’s unique geography and highlights the need for Maldives to invest in healthcare delivery system. Island countries developing its domestic healthcare workforce with small, dispersed populations typically to reduce its dependence on foreign have higher costs of health service delivery and professionals and to create a more sustainable face challenges in balancing adequate access healthcare system. 77 Figure 4.4: Regional comparison of per capita government health expenditures, 2020 $700 $660 $600 $500 $400 $300 $200 $104 $113 $100 $69 $6 $9 $21 $18 $13 $0 Afghanistan Bangladesh Bhutan India Sri Lanka Maldives Nepal Pakistan South Asia regional average Source: Global Health Expenditure Database (n.d.) The health sector is currently a major and the decline in GDP due to the contraction spender of the government’s fiscal budget, of the tourism sector. This proportion is notably and so the sustainability of health spending higher than that of other South Asian nations, and needs to be closely monitored. In 2019, if the higher than even the average for high-income Aasandha health insurance program is included, economies, which allocate 14 percent of their the government spent approximately 20 percent budget and 5.5 percent of GDP , to healthcare of its budget, equivalent to 7 percent of GDP, on (figure 4.5). Compared even to other small island healthcare. In 2020, this rose to an estimated countries, Maldives’ health spending is high from 9.07 percent of GDP because of the pandemic every perspective (figure 4.6). Figure 4.5: Domestic government health expenditure as a share of GDP and of total government expenditure Domestic Government Health Expenditure as % GDP 10.0 25 Maldives Domestic Government Health Expenditure as Total Government Expenditure (%) 7.5 20 Maldives 15 5.0 10 Bhutan Bhutan Sri Lanka 2.5 Nepal Nepal Sri Lanka 5 Afghanistan Pakistan Afghanistan India Bangladesh Pakistan India Bangladesh 0.0 0 250 500 1000 4000 12000 35000 100000 250 500 1000 4000 12000 35000 100000 GNI per capita, US$ GNI per capita, US$ Source: WHO Global Health Expenditure Database (2020) 78 Maldives Human Capital Review Unleashing People’s Full Potential Figure 4.6: Regional comparison of government health expenditures as a share of GDP, 2020 10 9.1 9 Per capita expenditure (% of GDP) 8 7 6 5.4 5 3.9 3.6 4 3.0 3 2 1 0 Maldives Tonga Samoa Seychelles Solomon Islands Source: Global Health Expenditure Database (n.d.) The Aasandha health insurance program Improvements in domestic healthcare has been instrumental in protecting capacity in Maldives have yielded positive households from unforeseen health- outcomes for efficiency and equity. Recent related financial burdens. A national (non- analysis of HIES data reveals a significant decline contributory) health insurance scheme, in OOP spending on overseas care between 2016 Aasandha has evolved into a universal and 2019. The percentage of households with healthcare program available to all Maldivians. at least one overseas outpatient visit in 30 days Citizens, including those overseas, can get almost halved, from 6.2 percent in 2016 to 3.3 immediate treatment at empaneled hospitals percent in 2019, while domestic outpatient visits in the Maldives, Sri Lanka, or India provided increased from 48 percent in 2016 to 55 percent they obtain pre-authorization from a 24-hour in 2019. This shift from overseas to domestic helpdesk. Data from the Household Income care-seeking can be attributed to factors such as and Expenditure Survey (HIES) show a marked increased local healthcare capacity—the number decrease in out-of-pocket (OOP) health of general practitioners rose from 97 in 2016 to costs in the Maldives, from 9 percent of total 254 in 2019—and the expanding coverage of household expenditure in 2009 to 2.2 percent Aasandha, which has improved access to local in 2019. This decline can be attributed to the high-end private healthcare. This trend has implementation of the Aasandha program, positive implications for both efficiency (since which provides coverage for expenses that overseas care is more expensive to reimburse) were previously not covered. The largest and equity (since overseas care is less accessible decrease in OOP costs occurred among to poorer households) in health spending. lower-income households, resulting in a more balanced distribution of public health It has been observed that government spending across the various income groups agencies’ expenditures have exceeded their by 2019. The occurrence of catastrophic budgeted allocations, as demonstrated by a OOP costs, an SDG indicator (SDG 3.8.2), also consistently high budget execution rate well showed a decline of at least 50 percent in all over 100 percent. The trend of overspending income quintiles between 2016 and 2019. has been particularly pronounced at the Indira Gandhi Memorial Hospital (IGMH) and the 79 National Social Protection Agency (NSPA). For of the healthcare system. The Maldives spent example, IGMH overspent by 213 percent in 2014 US$74  million acquiring medical consumables, and 237 percent in 2016, while NSPA overspent test kits, and personal protective equipment in by 211 percent in 2017. The Public Expenditure 2021. An additional US$25 million was used to and Financial Accountability (PEFA) performance purchase diagnostic and medical equipment, assessment report revealed that, in both 2018 construct medical and quarantine facilities, and and 2019, the actual expenditure on healthcare build intensive care units (ICUs) in eight atolls and exceeded the allocated health expenditure a 300-bed ICU facility in Hulhumalé, in the south of budget. The absence of financial discipline and North Malé Atoll. The government also disbursed stringent accountability in these organizations US$17 million to over 13,000 medical and frontline could significantly impact the country’s overall workers, with most of these expenses incurred by health expenditure. the Ministry of Health and the National Disaster Management Authority. The government is expected to increase its investment in the healthcare sector, with a plan to allocate more funds to capital investments. 4.3.2 Institutions and health This includes raising the proportion of Public service delivery system Sector Investment Program (PSIP) funds from 11 The Maldivian healthcare delivery system is largely percent to 15 percent for 2022–2024, resulting in public sector-driven. Several private healthcare an annual budget of US$76 million (1.16 billion providers support and supplement the public MVR). The additional funds will be directed healthcare system with diagnostic and curative toward constructing new hospital facilities on services and medicines. There are also several 13 islands and the continued development healthcare nongovernmental organizations of cancer and tertiary hospitals in Gan, the (NGOs). Most health services are concentrated in southernmost island of Addu Atoll. As a result, the Greater Malé Region. Government policy aims there will likely be an increase in health spending to establish at least one public health facility, such in the medium term because the new facilities as a hospital or a health center, on each inhabited will require additional staff and the purchase of island, and tertiary services at selected urban medical equipment and consumables. These locations. The government uses a grading system investments will contribute significantly to to decide each facility’s service level, employing improving healthcare accessibility for Maldives criteria such as the location, number of beds, residents, particularly those in remote areas. patient load, and services rendered. The facilities are organized in a three-tier system: primary In 2020 and 2021, the government allocated care through health centers at the island level significant fiscal resources to tackling the (Grades 1, 2, 3, and 4), secondary care delivered pandemic and strengthening the country’s via atoll and regional hospitals (Grades 1, 2, 3, pandemic response capacity and future and 4), and tertiary care available at four tertiary preparedness. In 2020, the Maldives spent hospitals, the Indira Gandhi Memorial Hospital US$188 million, or 5 percent of annual GDP, on its (IGMH) being the country’s main referral health COVID-19 policy response, higher than most South facility. The three other tertiary-level hospitals are Asian countries. Of this amount, roughly half was ADK Hospital and Tree Top Hospital in Greater directed toward health and social spending, with Malé, and Addu Equatorial Hospital in the south the remainder going toward economic support of the Maldives. There are also six regional and for households and firms. Most of the health 14 atoll hospitals in strategic locations around the and social spending was allocated to procuring country, which serve as the first referral points for medical supplies and expanding the capacity each inhabited island. 80 Maldives Human Capital Review Unleashing People’s Full Potential The national healthcare service delivery the Aasandha health insurance program, the system is supported by the government’s high cost of pharmaceuticals, and challenges universal health insurance scheme, in hospital management. In addition, Maldives Aasandha. The tax-funded scheme provides has a hospital-centric healthcare system, with essential healthcare services to all Maldivian less focus on prevention and primary care. To citizens, including outpatient services, inpatient create a more efficient and more cost-effective care, medications, consumables, emergency health system, there needs to be a shift toward evacuations, and costs associated with accessing strengthening prevention, health promotion, and healthcare abroad when services are not available early disease detection and management in the locally. However, the dispersed population, high primary care settings. prices of medicines, and shortage of locally trained healthcare staff—in 2019, 64  percent Although the Aasandha program has helped of medical doctors and 42 percent of nurses to reduce household out-of-pocket health were expatriates—contribute to the high cost of expenditure and to shield households from service delivery. Moreover, the generous service catastrophic health-related spending, it coverage under Aasandha, and the scheme’s has also led to budgetary pressures on the limited cost management features, pose further government. Compared to many social health challenges to the long-term sustainability of the insurance programs globally, Aasandha has more country’s current healthcare financing system. generous service coverage: it reimburses inpatient and outpatient medical costs and pharmaceutical Improving healthcare delivery, particularly costs in public and private health facilities, as well in the atolls, is critical to reducing Maldives’ as transport costs and overseas treatment costs, spatial disparities. The government has on a fee-for-service basis. Despite the ongoing largely protected households against high out- efforts to contain Aasandha expenditures and of-pocket expenses, but there is a need for make it more efficient, the program has limited more comprehensive health sector reforms to tools for strategic purchasing and expenditure address inefficiencies and strengthen healthcare containment. The escalation in costs has services in the community health centers and in been primarily driven by the rising expenses of the atoll hospitals. The pandemic underscored outpatient care and medication, rather than an the importance of investing in emergency increase in the number of beneficiaries. From preparedness to respond promptly and efficiently 2014 to 2019, the Aasandha scheme sustained a to health crises, particularly given the tourism compound growth rate of 18 percent per year in sector’s high vulnerability. By strengthening expenditures. Over the same period, the number existing health services and introducing new of beneficiaries increased by only about 3 percent services such as telemedicine, the country per year. High drug prices—on average 15 to 75 will be better equipped to respond quickly to times higher than international benchmarks—are health emergencies, thereby sustaining the largely attributable to the absence of robust competitiveness of its high-end tourism industry. procurement and purchasing methods, according to a 2018 World Bank comparative study (“Maldives Health Sector Expenditure 4.3.3 Efficiency in Review,” 2018 internal document cited in World health spending Bank (2022e)). Between 2017 and 2019, spending on drugs and medical consumables rose by 24 The Maldives faces several challenges in percent annually on average. The government’s achieving efficiency in the healthcare sector. plan to impose a maximum ceiling on Aasandha’s Key factors affecting the efficient delivery of reimbursements of pharmaceutical drug retail services include the rising costs associated with costs is a commendable measure that would 81 likely effectively reduce fiscal pressure on the of the regulatory frameworks, which led to the government, but its implementation has been enactment of the Health Services Act and the delayed since April 2022. To achieve cost savings, Health Care Profession Act. The Health Services the government is also exploring the possibility of Act (29/2015) directly addresses the framework bulk procurement of major drugs. for healthcare services. It uses a quality-of-care framework to assess and improve health facilities to ensure universal health coverage. The Health 4.3.4 Health strategy and policies Care Profession Act (13/2015) provides guidelines Maldives’ health sector is currently guided by the on working in the healthcare profession in the National Health Master Plan, 2015–2026. The plan, Maldives, determines the mandate and executive which supports several of the SDGs, focuses on powers of councils responsible for the monitoring the quality of healthcare and the ease of access and implementing of the profession, and defines for all. It further mandates the strengthening the guidelines and standards they are subject to. 4.4 Overview of the social protection sector Box 4.1: Why social protection matters for human capital Social protection comprises a variety of policy tools—from cash transfers to the poor and people with disabilities, to social care services for vulnerable populations, from employment and labor market programs to unemployment insurance and old-age pensions. Although not explicitly included in the calculation of the HCI, social protection plays a major role in helping households build and protect human capital. This occurs through both (i) programs that protect the poor and the vulnerable (through cash transfers and social care services) and (ii) programs that support human capital formation. For instance, while cash transfers to the poor and the vulnerable can ensure basic income security, social care services, on the other hand, can offer households parental advice on childbearing and child raising, stimulate the use of health and education services, provide information on nutrition, and nudge parents to use cash transfers to invest in their children’s future. Well-designed cash transfer programs provide vulnerable households and people with disabilities with financial stability; but also support better early childhood and nutrition practices, greater use of health and education services, and reduced reliance on child labor. Many social assistance programs also add accompanying measures to direct transfers that can enhance human capital formation, such as providing premiums to children who regularly attend school. Unemployment benefits can be linked to participation in skills development programs that equip jobseekers with newer or higher-quality skills, in the best case leading to new, more productive, and better-paying job matches. When social protection is provided in response to economic shocks or natural disasters, it can also protect consumption and mitigate the need for households to engage in negative coping strategies that may affect their wellbeing, undermine their children’s future, or degrade their human capital. Many cash transfer programs have flexible rules that can be modified to quickly respond to crises; and for middle- class households, unemployment insurance protects household consumption and human capital during crises by smoothing income during times of job loss. Social protection programs also support employment and youths’ transition into the labor market, making it more likely that investments in human capital will be fully used. Social protection and employment programs promote the creation of more and better jobs, and help vulnerable populations women, youth, marginalized groups, the poor, and older citizens access jobs. Job-finding services include profiling, intermediation services, and skill enhancement training programs. Lastly, social protection is a core pillar of social policy, tying in education and health. It protects people from falling into poverty and destitution, helps them cope with adverse idiosyncratic or systemic shocks, smoothens consumption over their lifetime, promotes human capital accumulation, and facilitates access to jobs. Not surprisingly, as with education and health systems, social protection systems vary by context. Yet, an effective system should be (i) adequate, aligning the level and generosity of support with the of need; (ii) effective, (iii) equitable and (iv) financially sustainable. The social protection sector in the Maldives Defining exactly which programs are social comprises a menu of social assistance protection programs is not straightforward. programs (mostly categorically targeted The National Social Protection Framework, conditional transfers), a very generous launched in January 2023, defines social pension scheme, food programs, and protection somewhat narrowly to cover social universal health insurance. Social spending assistance and social insurance that ensure on transfers, subsidies, and insurance is an basic income security across the life cycle important element of Maldivian policy. In 2021, and protect against sickness, injury, and the allocation for social protection exceeded 7 unemployment. It does not include labor percent of GDP . Although the country’s health market programs and social care services insurance and old-age income support programs that are typically part of social protection. are comprehensive and provide significant Universal subsidies for fuel, electricity, water, benefits to citizens, it has left little fiscal space food, and transport are also excluded from for direct cash transfers (safety nets), which this new definition of social protection. What in 2018 amounted to only 0.3 percent of GDP . follows, below, describes a broader array of The country is transitioning away from reliance programs what is covered in the definition in on price subsidies for electricity, food and fuel, the National Social Protection Framework. which are inefficient and costly and expose the budget directly to external price shocks. 83 4.4.1 Financing social response to the COVID-19 pandemic. A large part protection expenditures of the social assistance spending—1.88 percent of In 2021, Maldives allocated 7.72 percent of its GDP—is on social pensions, including allowances GDP to social protection—a very high figure for groups other than the elderly, such as single in international terms—concentrated on just a women and persons with disability. Another few programs: social pensions, subsidies, and 2.95 percent is earmarked for social insurance, a health insurance program. Social assistance, mainly comprising the health insurance program including expenditure on subsidies, accounts for Aasandha, the Maldives Retirement Pension 4.77 percent of GDP , of which 0.63 of a percentage Scheme (MRPS), and the Other Pensions program. point represents additional expenditures incurred in Labor market programs are nascent in Maldives. Table 4.1: Expenditures in 2021 Programme Budget 2021 % of % of social % of % of MVR million category protection budget GDP Single parent 60.00 1.89 1.17 0.17 0.09 Foster parent 2.85 0.09 0.06 0.01 0.00 Disability allowance 250.00 7.89 4.88 0.72 0.38 Food Assistance 0.25 0.01 0.00 0.00 0.00 Medical welfare 110.00 3.47 2.15 0.32 0.17 Basic pension 937.40 29.60 18.28 2.69 1.41 Electricit subsidy 427.70 13.50 8.34 1.23 0.64 Water subsidy 21.00 0.66 0.41 0.06 0.03 Food subsidy 365.35 11.54 7.13 1.05 0.55 Fuel subsidy 366.40 11.57 7.15 1.05 0.55 Pre-school grants 21.00 0.66 0.41 0.06 0.03 Therapeutic devices 33.00 1.04 0.64 0.09 0.05 Flexible welfare 3.00 0.09 0.06 0.01 0.00 School breakfast 148.10 4.68 2.89 0.43 0.22 COVID support 421.00 13.29 8.21 1.21 0.63 Social assistance total 3,167.05 100.00 61.77 9.10 4.77 No COVID 2,746.05 100.00 58.35 7.89 4.14 Aasandha 1,313.50 67.02 25.62 3.78 1.98 MRPS 251.00 12.81 4.90 0.72 0.38 Other pensions 395.40 20.17 7.71 1.14 0.60 Social insurance total 1,959.90 100.00 41.65 5.63 2.95 Unemployment - 0.00 0.00 - 0.00 Labour market total - 0.00 0.00 - 0.00 Overall total 5,126.95 100.00 14.74 7.72 No COVID 4,705.95 100.00 13.53 7.09 Source: Government of Maldives (2023) 84 Maldives Human Capital Review Unleashing People’s Full Potential Subsidies (including electricity, water, individuals across the life cycle by targeting food, and fuel) account for another transfers to poor households regardless of 1.7 percent of GDP and are poorly their age composition. targeted.The low coverage of poor and vulnerable households, coupled with high expenditures on subsidies, present a strong 4.4.2 Institutions case for rechanneling them in more poverty- The two main social protection agencies are targeted schemes. Looking forward, the the National Social Protection Agency (NSPA) government faces a large threat to fiscal and the Maldives Pension Administration sustainability owing to the large weight of Office (MPAO). NSPA was established under non-contributory social pensions. Unless the 2014 Social Protection Act to implement such program parameters are reformulated all social assistance programs, as well as some or adjusted, this represents a formidable subsidies and health insurance schemes. fiscal threat. Targeting social pensions at NSPA also was formerly responsible for paying poor and vulnerable households could the electricity subsidy, which is now paid better serve social assistance’s poverty directly by the Ministry of Finance. The MPAO, alleviation goals by reaching elderly people set up under the Pensions Act (2009), manages who live in poor or vulnerable households. the (MRPS), a government-run, contributory Finally, social assistance is predominantly pension scheme for all civil servants and reserved for the elderly at the expense of formal private sector workers as well as the children and the working poor. Tight social Basic Pension scheme. assistance budgets should rather be used to maximize the welfare and livelihoods of Source: ©Duc Huy Nguyen/Shutterstock 85 Job centers add a third important institutional The Act identifies specific groups of citizens pillar to social protection. The job centers, considered to be in need of assistance. These which are being rolled out under the Ministry include single parents looking after children on of Economic Development, are responsible for their own, those who do have no one to look delivering employment services and verifying after them (the “destitute”), psychiatric patients, eligibility for the proposed unemployment children and the caretakers of children who benefits scheme. do not receive support from their parents (foster children), owners of small- or medium- Child protection services are the responsibility size businesses operating in various industrial of the Ministry of Gender, Family and Social sectors that may require assistance due to a Services (MoGFSS). The main service delivery difficult incident; and students. points are the Family and Childrens Service Centers, located in every atoll. Schools and The Pensions Act governs both contributory health centers are obligated to report cases and non-contributory pensions. A new bill of child abuse to social workers. The MoGFSS proposes to introduce an unemployment also runs a child helpline (1412) and an benefits scheme to strengthen social security online reporting app. Services for those with for workers, which would be a new milestone. a disability are shared between the MoGFSS, NSPA, and the Disability Council. There is no The National Social Protection Framework, single agency tasked with overseeing all social launched in January 2023, states the objective protection policies and programs. of social protection in Maldives to be to protect everyone from life cycle shocks, including those suffering specific shocks or distress. It 4.4.3 Government strategy envisions a three-tier social protection system: and approach 1) social assistance comprising access to healthcare and income security across the life Social protection in the Maldives has cycle, 2) mandatory social insurance comprising a comparatively strong legislative and pensions, unemployment benefits support for strategic policy basis. It is governed by various sickness, maternity, and so on, and 3) voluntary laws, including the Pensions Act and the 2014 social insurance, which provides additional Social Protection Act. The Social Protection benefits for those who choose to contribute. Act lays out the overall vision and framework for the delivery of social protection programs. The Act aims to 4.4.4 Programs and services • Offer citizens social protection assistance The four main social assistance programs to overcome poverty shocks and difficult administered by the NSPA are: conditions i. The Single Parent Allowance: a targeted • Reduce the gap between the rich and conditional cash transfer program of 1,000 the poor MVR (US$65) per child (below 18 years of age) • Give all citizens equal access to the ii. The Foster Parent Allowance: a monthly country’s resources allowance of 1,000 MVR per foster child • Provide assistance to citizens who do not (below 18) and 500 MVR (US$32.50) for a have the means to meet their basic needs guardian or foster parent 86 Maldives Human Capital Review Unleashing People’s Full Potential iii. The Disability Allowance 0.09 percent of the population. The most recent COVID-19 response, an income support program iv. The Food Subsidy Program: a targeted transfer, covered only 22,941 individuals. conditional cash transfer program (40 MVR per person and a maximum of 240 MVR (US$15.60) per household). Pensions The Maldives has an excellent pension system Both the Single Parent Allowance and the Foster comprising a social pension, a top-up pension, Parent Allowance are conditional on school and a well-integrated public and private sector attendance and on children receiving required contributory system, the MRPS, managed by the vaccinations and attending regular health MPAO. The social pensions, which dominate checkups. The health conditionality is checked social protection expenditure in Maldives, are only at the time of application (by looking at among the largest in the South Asia region. The vaccination cards) and is followed up only every Old-Age Pension Scheme guarantees all citizens two years. Overall, school attendance condition 65 and above a minimum monthly income of is not closely monitored nor enforced. The 5,000 MVR (US$325), comprising a 2,300 MVR disability allowance is not targeted while the (US$150)/month Basic Pension, and a 2,700 MVR others are based jointly on an income test (per (US$176)/month top-up called the Senior Citizens capita income of less than 45 MVR /day) and a Allowance. The old-age pension, categorically proxy means test score. NSPA also has plans targeted by design, is the least progressive of to introduce programs for the destitute and benefits: only 43  percent of pensioners come mentally ill, but these have not yet been instituted. from the bottom 40 percent of the distribution In principle, NSPA could introduce additional (SPJ SAR BOOK). Both payments are pensions- benefits for students and small business owners, tested, meaning that they are conditional on other but at present has no plans to do so. pensions being below 5,000 MVR (US$325) but do not consider other household income. The The social assistance programs have the MRPS defines the contributory pension scheme most generous benefits in the South Asia for all civil servants and formal private sector region. Monthly transfers range between 1,000 workers (roughly 40 percent of the population). MVR (US$65) per child per month for the In addition to the MRPS, the Maldives provides foster/single parent allowance, and 5,000 MVR Other pension benefits to public service retirees, (US$325) per month for old-age pensioners. in effect creating a provision of “double pensions.” The persistence of “double pensions” for some Nevertheless, the cash transfer programs are government agencies that provided full benefits narrowly targeted, covering only 3.9 percent under the scheme in place before the 2009 of the total population. For instance, in 2022, reform and, in addition, provide full benefits under the Single Parent Allowance and Foster Parent the scheme established in 2009, raises equity Allowance covered only 1.6 percent of the concerns. population. In terms of the coverage of the poor, they covered 4.2 percent of those in the poorest The national (non-contributory) health quintile of the income scale, and 2.5 percent in the insurance scheme, Aasandha—discussed second-poorest quintile. The disability allowance in subsections 4.4.1 Health financing and reaches 1.98 percent of the total population: 4.4.2 Institutions and health service delivery 7.3 percent of the poorest 20 percent, followed system—has evolved into a universal by 4.3 percent of the second-poorest 20 percent. healthcare program available to all Maldivians. The food assistance program reached only Citizens, including those overseas, can receive 87 immediate treatment at empaneled hospitals in doubled from 3 percent of GDP in 2019 to 5.7 the Maldives, Sri Lanka, or India provided they percent in 2022, mainly due to a sharp rise in fuel obtain pre-authorization, available from a 24-hour subsidies, adding further pressure to an already helpdesk. Although this falls under the health high public debt ceiling (see figure 4.7 below for sector, given its universal nature, it is also included more detail on subsidy costs). in the Public Expenditure Review (PER) under social protection. Expenditures on the universal Electricity and fuel subsidies increased from health insurance scheme have consistently risen. 18 percent in 2019 to 60 percent in 2022. Within There is a case for revisiting and rationalizing this mix, the share of electricity remained about the program from both a targeting perspective the same, at 18 percent of the total subsidies, and a program operations perspective. Savings while that of fuel increased from 0 percent to from a streamlined Aasandha program could be 43 percent. The category called “fuel subsidy” redirected to broaden the coverage of safety net was introduced as a line item for the first programs. Measures to improve people’s access time in 2021. Fuel subsidies are basically the to the disability certification process would also difference between the landing cost of fuel and help improve safety net coverage. the cost at which this fuel is sold to electricity utility companies. The diesel component of the subsidy is large while the subsidy on gasoline at Subsidies the pump is relatively small. On electricity, there There is a wide array of subsidies in place is a two-stage subsidy: fuel is offered at reduced (including on electricity, water, food, and cost to the utility company, and a tariff-subsidy fuel) that form a major component of is offered to the end user. The tariffs follow an public expenditure in the country. The “increasing block tariff” price structure, though Social Protection Act envisions many forms of there are significant regional variations. During assistance to be provided through subsidies. COVID-19, there was an additional subsidy The subsidy bill as a percent of GDP almost offered on tariffs to end users. Source: ©byvalet/Shutterstock Food in the Maldives has historically been housing subsidies. The implicit subsidies work subsidized implicitly by directing the state- through rents recovered by the government. owned State Trading Organization (STO) The houses are built by the Housing to sell basic food items through its retail Development Corporation in the Ministry of stores below cost. When the government National Planning, Housing and Infrastructure increased the scheduled retail price of rice through loans (mainly from China and India) in 2016, roughly halving the food subsidy bill, and rented below the market price. The NSPA introduced a food subsidy cash transfer subsidy component is the difference between as compensation to poor households for the the market value and the rents paid, as well as impact of this price increase. the cost of defaults on rental payments. The default rate, which is also in the nature of an Lastly, housing subsidies exist but are embedded subsidy, in Maldives is close to difficult to measure. There is currently no 35%, which makes the rent-to-own program in specific line item giving the quantum of Maldives inefficient. Figure 4.7: Maldives: Subsidy structure Maldives: Subsidies as a Percent of GDP Composition of Subsidies as a Percent of GDP 6 80% 73% 70% 5 4.6 4.3 60% 51% 50% 50% 49% 4 43% 3.2 3.0 40% 30% % of GDP 3.8 30% 27% 23% 3 20% 18% 17% 14%12%17% 15% 9% 8% 6% 2 10% 0% 1 1.7 Electricity Food Health Insurance Fuel 0 Subsidies Subsidies premium Subsidy 2015 2016 2017 2018 2019 2020 2021 2022 2017 2019 2020 2021 2022 Source: Ministry of Finance Maldives (2022) Note: The total subsidy bill in 2017 was 1.263 billion MVR (US$82 million). Subsidies rose to 5.779 billion MVR (US$375 million) in 2021 and to 5.449 billion MVR (US$353 million) in 2022. The fuel subsidy, as a percentage of total subsidies, reached 43 percent in 2022. The subsidies for the health insurance premium were expected to fall from 73 percent in 2017 to 30 percent in 2022 and are expected to remain at about that level in percentage terms in 2023. In 2017, the health insurance premium subsidies were 728 million MVR (US$47.3 million) and rose to 1.638 billion MVR (US$106 million) in 2022. Subsidies currently are provided through efficiencies in procurement. Hence the cost budgetary support to state-owned enterprises. of subsidies exceeds their benefit, and these The support is vulnerable to price shocks driven programs could be replaced by better-targeted by international market dynamics. The current cash transfers or utility credits. structure of support does not incentivize 89 2017, 12.6 percent of Maldivian women have Labor market programs experienced intimate-partner violence and 1 in Maldives is also investing further to expand 4 has experienced some form of GBV during active labor market programs. This includes her life. Although the government runs several establishing a network of job centers that programs for the prevention of GBV and to provide counseling, employer–job seeker support GBV survivors, these programs have job matching, and referrals to reskilling and not been integrated into the social protection upskilling opportunities. The government is system. Moreover, there are conflicts at also introducing an unemployment benefit the policy and institutional levels as well as scheme that will provide up to three months overlaps in roles and responsibilities in service of conditional unemployment benefits but provision. The conflicts create challenges mandate beneficiaries to enroll in labor market in monitoring coordination among the half a programs and actively apply to jobs. The dozen or so government agencies that share unemployment insurance will be a contributory responsibility for this function—namely, the scheme managed by the MPAO. The scheme Ministry of Gender, Family and Social Services therefore links the labor market information (MGFSS), the Family Protection Authority (FPA), system to the MRPS. the Human Rights Commission of Maldives (HRCM), the National Integrity Commission (NIC), the Children’s Ombudsperson’s Office Care Services (OCO), the Department of Juvenile Justice, Care services such as Child Protection and the Family and Child Protection wing of Services and gender-based violence (GBV) the police. Bridging institutional partnerships support and prevention programs are not between NSPA and these agencies could help well integrated with other social protection streamline administration and resolve these schemes in the Maldives. With regard to fragmentation issues. child protection, the government operates two institutions for children: one at Hulhumale and one at Vilimale. Most of the children are victims 4.4.5 Efficiencies in the social of abuse and neglect, and a few are orphans. protection system Where possible, the children are either returned The Maldives has a fairly advanced social to their families or placed into foster care. The protection delivery system in place that Family and Childrens Service Centre continually enables adaptive and scalable responses. monitors reintegrated children for one year after The Maldives has expanded the array of social their return. The foster system operates based protection programs that cover risks across on a multi-stakeholder panel comprised of a the life cycle, and made improvements in doctor, a lawyer from the Attorney General’s developing integrated delivery systems that Office, NGO representatives, and ministry support these programs. Elements of the officials. Social workers follow a monitoring delivery system include the establishment plan to regularly check on fostered children. of a social registry for the delivery of multiple Carers are entitled to financial assistance from programs, a digital ID system, unified beneficiary NSPA as described above. information systems, and electronic payment of benefits. The NSPA houses a digitized GBV is a major issue for a significant portion beneficiary registry system called the Social of women in the Maldives. According to Protection Information System (SPIS) that can the Demographic and Health Survey 2016– 90 Maldives Human Capital Review Unleashing People’s Full Potential be accessed from the island councils. In 2020 the Maldives utilized these established aspects of its social protection delivery system to swiftly introduce a new emergency income support allowance program for workers who had lost their incomes because of COVID-19 (more information in Chapter 5).1 One challenge to effective scalability is the overly narrow coverage of the poorest. Current safety nets cover people in all the income quintiles, not just the poorest, making it imperative that targeting be improved to focus on including the poorest and excluding those in higher income brackets. Households in the poorest quintile that do not specifically belong to any of the groups targeted by the current categorical programs—although still covered by health insurance and old-age income support programs—are largely excluded from cash-based safety net support. Based on the available data, the benefit impact is much greater for those in the poorest income quintiles, and significantly less for those in higher-income quintiles. 91 Source: ©KlavdiyaV/Shutterstock Chapter 5 Shocks that Threaten Human Capital in the Maldives Chapter 5: Key Messages Impact of COVID-19 • The pandemic severely impacted the economy and exposed its vulnerabilities and sustainability challenges, emphasizing the need for better crisis response and planning. • Overreliance on tourism as virtually the island’s sole source of economic activity led to major economic shocks. • Multiple sectors—from construction, fisheries, and transport to food manufacturing and electricity—were impacted, with tourism and fisheries sustaining job losses and reduced worker salaries. • School closures and differential access to remote learning widened the education gap between public and private schools, affecting already disadvantaged children, especially girls. • The economy recovered significantly in 2021, driven by a rebound in tourism. Impact of climate shocks • Climate-related shocks undermine hard-won development gains and human capital accumulation. • In the Maldives, climate change threatens livelihoods, health, education, and specific vulnerable groups. • Food security is vulnerable to extreme weather events because of limited storage facilities and disruptions in transport. • Education is affected by school infrastructure damage, limited access, and increased drop-out rates. • Health risks include heat-related illnesses, undernutrition, infectious diseases, and air pollution. • Livelihood sectors, such as tourism and fisheries, are highly vulnerable to climate impacts. • At-risk populations—including migrants, women, persons with disabilities, the poor, and children—face systemic barriers and heightened risks due to climate change. Government response to date • The Strategic Action Plan 2019–2023 promotes climate resilience, sustainable agriculture, resilient infrastructure, the protection of natural resources, and climate-sensitive social protection. • The Climate Change Policy Framework focuses on low-emissions development, ecosystem adaptation, food production safety, sustainable economic development, and fulfilling international commitments. • National disaster risk reduction policies—like the Community-Based Disaster Risk Management Framework and the National Disaster Management Plan—incorporate community-based climate change adaptation. • Adaptations include desalination water plants, elevated water storage systems, sea walls, artificial islands, improved waste management, water harvesting, and deep-sea tuna harvests, as well as data collection, community engagement, progress monitoring, and adequate finance and capacity. supported by the Income Support Allowance 5.1 The impact of COVID-19 Program. A Rapid Assessment of the Impact of pandemic and lessons learned COVID-19 on Livelihoods by the UNDP in May The COVID-19 pandemic dealt a massive 2020 reported that, as a result of COVID-19, blow to the Maldivian economy, exposed 67,000  employees of resorts (22,000 local its vulnerabilities to external shocks, and employees and 45,000 foreigners) were highlighted grave sustainability challenges. affected by either redundancy, retention but Even though rapid containment measures with no-pay leave, or retention with reduced and effective treatment led to a relatively low pay (UNDP and MED 2020). number of deaths,22 the World Bank and Asian Development Bank named Maldives as one of The construction, fisheries, transport, food the worst-hit countries economically in South manufacturing, and electricity sectors Asia (UNDP and MED 2020). The concurrent were not spared. The COVID-19 restrictions economic shocks of the massive reduction resulted in a halt in construction activities in global tourism and business travel in 2020 across the country. To limit the spread of the and 2021, the global recession, and the war virus, the government’s efforts focused on in the Ukraine illustrated the risks of national the repatriation or relocation of thousands of overreliance on a single economic activity foreign workers. The fisheries sector, a major such as tourism. Additionally, the tourism employer of men outside the capital of Malé, industry and urban centers such as Malé rely took a considerable hit as a result of border heavily on imported oil for electricity and on closures and the drop in tourism. This was imported food because of low agricultural reflected in the 4,262 fisheries sector workers production. COVID-19 highlighted the lack (32 percent of the entire sector) who applied of resilience in the context of volatilities in to the Income Support Allowance program international commodities markets. Limited (MED 2021). Similarly, the transport industry sectoral diversification, and overreliance on faced a complete disruption—with internal imports, are therefore two prime challenges for movement restrictions, inter-island travel the Maldives. bans, and especially the border closure. Air travel faced the biggest impact as almost all Unsurprisingly, the lack of economic flights were halted, with only a few operated for diversification and the massive blow emergency responses and to supply of goods sustained by the tourism sector resulted to remote islands. The inter-island travel ban in a ripple effect across the different suspended sea transport services entirely, economic sectors (MED 2021). The and internal movement restrictions, combined distribution of applicants in the Income with the contagious nature of the virus, meant Support Allowance Program revealed that that land transport was also minimal. In food although the pandemic significantly affected manufacturing, the export disruption led to the tourism sector in particular—almost many workers being laid off; approximately 61  percent of workers in that sector either 20 percent of all applicants to the income lost their jobs or went on reduced salaries— support allowance program were from this several other key sectors were impacted. sector. Lastly, the electricity sector took a major This is evident in the number of beneficiaries hit: already considered among the most costly 22 As of October 12, 2023, there have been 186,694 confirmed cases of COVID-19 in the Maldives—36 percent of the population—but a relatively low number of mortalities—316. WHO, “Global Data—Maldives Situation,” https://covid19. who.int/region/searo/country/mv. 95 and inefficient energy sectors in the region, not to mention the loss of income and government’s subsidies (reaching 1 percent of livelihoods. Because of Maldives’ geography as GDP in 2019) imposed further fiscal pressure an archipelago of more than 185 small, inhabited on the sector’s limited public resources (Blum islands with low population pockets dispersed and Yoong 2020). over 90,000 sq. km of land and sea, delivery of services was time-consuming and costly during The decreased household earnings of workers the pandemic. As a result, some households in engaged in tourism-related jobs (one-third of remote parts were left out (World Bank 2022c). adult males and a quarter of females worked The brunt of the impact was felt most palpably within the sector) and the dependence of by already marginalized groups such as women, lower-income households on the disrupted children, the elderly, the poor, and persons with fisheries sector due to weak demand raised disabilities (UN Maldives 2020a). concern that poverty rates might increase in 2020, especially for households already close The provision of healthcare during the to the poverty line. However, all sectors except pandemic highlighted inequalities between for construction showed a significant rebound, urban centers and the more remote islands, particularly in the second quarter of 2021. The resulting in reduced access to key services. poverty rate, which rose sharply to 11 percent As the pandemic overburdened the hospitals in 2020, fell back to 4 percent in 2021 (Blum throughout the country, essential services and Yoong 2020). and ongoing public health programs were compromised. The small size of the islands and their geographical dispersion, as well as 5.2 COVID-19 and human reduced staffing due to the pandemic, led to development high service delivery costs and limited financial resources, resulting in the prioritization of Globally, COVID-19 had a devastating COVID-related services over others (UN impact on human capital. It strained human Maldives 2020b). development sectors and exacerbated their challenges. It brought to the fore systemic issues School closures and differential access to that had been present but had not seemed good-quality remote learning resources prominent, revealing significant vulnerabilities may have a negative long-term impact on within the education, social protection, and children’s learning and psychological and health sectors. In doing so, it highlighted the emotional development. School-based importance for effective rapid response, crisis learning completely ceased on March 9, 2020 management planning, and building solid and gradually restarted as islands were declared delivery systems both for normal times and in COVID-free between July and October 2020. anticipation of crises. During this time, schools shifted to remote means via the internet, phone, and social In Maldives, the consequences were media.23 Online classes were not systematically substantial. Children’s learning was disrupted, provided to all public school students, and food insecurity grew because of supply chain only 72 percent of them reported having disruptions, and hospitals were overwhelmed, access to broadband internet at home in order 23 In Maldives, 82 percent of students attend public schools, 12 percent private schools, and 6 percent attend community schools. 96 Maldives Human Capital Review Unleashing People’s Full Potential to access the classes. By contrast, all private Girls were also at risk of missing out on online school students were offered online learning education opportunities while staying at options (UN Maldives 2020b). Differences in home because many of them were expected access to remote-learning options may further to take on additional domestic and care widen the gap between public and private work duties since they were physically not in education (UN Maldives 2020b). In addition, school. This experience also highlighted the the curriculum was condensed, daily hours public sector’s limited use and knowledge were reduced, and the school week shortened of innovation and technology and the need to four days to allow teachers one day for to develop distance-learning modalities in planning. As a result, effective study time was case of future school closures (UN Maldives lost due to school closures and reduced class 2020b). There is already evidence of the hours. The most disadvantaged children, such impact of COVID-19 on children’s education, as those with disabilities, were the most at risk with the standardized Grade 4 NALO test on of being left out of remote-learning options Mathematics demonstrating an immediate and without access to classes tailored to their drop, especially for girls (see figure 5.1). specific needs (UNICEF and UNESCO 2021). Figure 5.1: Gender trends in Grade 4 NALO Mathematics test scores, 2017 to 2021 80 Mathematics test score averages (%) 57.04 59.53 60 54.65 51.13 51.5 50.7 40 20 0 Total Boys Girls 2017 2021 Source: NALO (2017 and 2021) Several social assistance initiatives were systems, nevertheless, were robust enough launched to mitigate the economic impacts to enable new assistance programs to be of COVID-19, after strict containment introduced swiftly, including the COVID-19 measures were put in place. Although the Income Support Allowance, which provided a Maldives social protection system has a range safety net of US$325 for up to 10 months to of health and education benefits, the programs households that either were unemployed, were were not designed to be scalable. The delivery on leave with no pay, had their salary reduced, 97 or were self-employed or freelance and had percent reported they were on unpaid leave, their earnings reduced due to COVID-19. and almost 15 percent said they had been Ministry of the Economy data from April to terminated from their jobs. Among them, 19.4 June 2020 indicate that it received 17,005 percent were self-employed, and 22 percent applications from 9,000 unique individuals for of the approved applications were submitted the Income Support program. Of those, 22 by women (UNDP and MED 2020). percent reported a deduction in their salary, 21 Box 5.2: The COVID-19 Income Support Allowance Scheme Reprioritizing public expenditures was the primary measure taken by the government during the COVID-19 pandemic, with a focus on health and relief interventions for households and businesses. The Ministry of Finance announced an Income Support Relief Package of US$65 million (2.9 percent of GDP) to households, comprising expenditure cuts in non- essential areas and financial support for the fisheries and tourism sectors. The government deferred student, housing, and SME loans for six months while additionally providing a 40 percent discount on utility bills in April and May 2020. To free up resources and finance priority healthcare and social welfare services, all public sector employees earning more than US$1,290 a month were subject to a 20–35 percent reduction in their earnings. As part of the relief package, the Income Support Allowance scheme aimed to provide approximately US$500 per month to workers and freelancers who have been furloughed, retrenched, or had suffered pay cuts owing to the pandemic. The government also increased spending on the Aasandha health insurance scheme, exempted medical products from import duties, and ramped up COVID-19 testing significantly in the Greater Malé region. Source: FAO (2018) Nevertheless, with the opening of borders levels by late 2023. Reflecting the resurgence and loosening of travel restrictions, in and heightened activity within the tourism 2021 the Maldives’ economy recovered sector, recent estimates point to 35.1 percent significantly led by the rebound in tourism, year-on-year growth in the first quarter of 2022, with estimates showing that poverty rates compared to 11.8 percent in the first quarter of are expected to fall back to pre-pandemic 2021. This growth contributed significantly to 98 Maldives Human Capital Review Unleashing People’s Full Potential the overall economic expansion, constituting and productivity, affecting health and nutrition half of the total economic growth. Moreover, outcomes, and impacting learning and this growth in tourism also propelled the Real educational attainment. Heat and pollution GDP to expand by 19.3 percent year-on-year raise the likelihood of illnesses in both children within that same period. and adults and directly impede learning and productivity (Please find below a selection of The first eight months of 2022 marked a 42.9 peer-reviewed studies for reference) (Currie percent y-o-y increase in tourist arrivals. Hotel et al 2009). Heat and drought affect crop and resort occupancy rates grew by 60.5 production, consumption, and nutrition, percent compared to 51 percent in 2021, leading to inadequate cognitive development with the average stay rising from 6.3 nights early in life, which in turn depresses an (pre-pandemic) to 8.1 nights during that individual’s entire earnings trajectory. Even period. The transport and communications present discounted losses solely in terms of sector, benefiting from the increase in visitors, lost wages are enormous. Extreme weather grew by 23.6 percent in 2022 Q1, and the events disrupt access to critical human construction sector recovered from the 32.1 development services. These setbacks percent contraction in 2021 Q1 and grew by undermine investments in human capital and 22.3 percent (y-o-y) in 2022 Q1, mainly due to make the task of improving human capital much the continuation of PSIP projects in transport, more difficult for the education, health, and infrastructure, and housing (Maldives Monetary labor-intensive sectors. Although the impacts Authority 2022). Real GDP is projected to grow of climate change on human development by 10.2 percent in 2023 due to the improved depend on one’s physical exposure to them capacity of the tourism sector, completion and one’s adaptive capacity, the adverse of the Velana International Airport expansion effects disproportionately disadvantage the project, return of Chinese tourists, and poor and the most vulnerable. continued capital expenditure, along with election-related spending. Although there is Climate-smart policies and interventions some upside potential for increasing arrivals can help significantly reduce the negative from traditional tourism markets such as China impacts of climate change on human and Western Europe, and new markets such as capital. Developing such policies, however, Saudi Arabia, tourism could still be adversely requires a keen awareness of climate risks, impacted by a persistent reduction in Russian an understanding of the country’s delivery and Ukrainian tourists (World Bank 2022a). capacity, and a fundamental grasp of context and location-specific vulnerabilities— for example, how exposed are people, 5.3 Climate shocks impacting particularly the most vulnerable, to weather- human capital gains in maldives related shocks? How dependent are people on jobs that expose them to greenhouse Climate-related shocks are becoming gas emissions? To what extent are people’s more frequent, more intense, and less livelihoods or access to human capital predictable, undermining hard-won services affected? And what education and development gains, poverty reduction skills will be needed to drive the changes efforts, and the accumulation of human required in designing and implementing capital. Climate change is already severely climate-smart policies and programs? impacting people, communities and economies globally, threatening livelihoods 99 The global climate crisis poses an Climate change will impact all of Maldives’ existential threat to the low-lying major livelihood sectors—including archipelago of the Maldives. The economy, agriculture, fisheries, tourism and tourism- society, and geography are all extremely related ancillary activities such as food vulnerable to rising temperatures, sea level and fish processing. Given the nature of rise, flooding, and coastal storms. As the the archipelago—more than 80 percent of its lowest-lying nation in the world, the Maldivian 1,190 coral islands lie less than a meter above islands are vulnerable to changes in weather sea level, for example—many communities patterns and inundation caused by sea level on remote islands are at higher risk of being rise, which can result in beach erosion, negatively impacted by climate change because damage to infrastructure, contamination of of the lack of diversified incomes. Specifically, fresh water sources, damage to coral reefs, women, persons with disabilities, and migrants and weather-related impacts to human health face numerous systemic economic and social and the economy. It is not inconceivable that challenges that can be further exacerbated by climate change will make many of the islands climate change events and impacts. uninhabitable by the end of the century. Indeed, the predicted sea-level rise between The socioeconomic development of the 10 and 100 centimeters by 2100 could see islands is thus intrinsically linked to its the Maldives completely submerged under environmental health, which will undoubtedly water. Even if the climate stays below 1.5°C of be negatively impacted by climate change in global warming, Maldives would see a further a business-as-usual scenario. Climate change 70–90 percent deterioration of its surrounding will affect everyone, but some more than others. life-giving coral reefs than in the business-as- Below is an overview of the impacts of climate usual case. While global projections indicate change on human capital in the Maldives, with a mean sea-level rise of 0.44 0.74 meters a focus on food security, health, education, by 2100, substantiated by the IPCC Fifth livelihoods, and specific vulnerable groups. Assessment, some analysts foresee more substantial elevations, such as the 2007 Adaptive social protection instruments are National Adaptation Program of Action’s gaining increasing attention as valuable observation of a slightly higher long-term tools for helping individuals and households trend of 1.7 millimeters annually compared to build resilience so they can be better to the global average (IFRC 2021). In terms of prepared for future shocks (climate or economic loss, the Asian Development Bank human-made). Social protection has a role in 2014 projected that, by 2100, the Maldives to play in both climate mitigation as well will be the hardest hit of six South Asian as adaptation. Building resilience through countries, losing on average 2.3 percent of productive inclusion/livelihoods programs GDP in 2050 and 12.6 percent of GDP (ADB and savings programs can provide a cushion 2021). In addition, critical infrastructure, of protection to households when a climate such as communications, airports and over shock hits but before the social response kicks 100 harbors are located within 100 meters in. Likewise at the community level, community (328 feet) of the coast and are vulnerable and public work programs that restore land, to climate change-related weather events promote home/community gardens, and repair (ADB 2021). culverts or roads may support adaptation by reducing the severity of climate impacts. 100 Maldives Human Capital Review Unleashing People’s Full Potential Source: ©PHOTOCREO Michal Bednarek/Shutterstock 5.3.1 Food security Food security in the Maldives is extremely disruptions of local and regional fishery vulnerable to climate-related challenges. systems would further threaten access to this Agriculture in the Maldives has always been nutrient-dense food source. a small-scale industry due to the small land area of the islands and even smaller area of Existing agricultural production is also cultivatable land, limited freshwater availability, under threat due to climate change, which and a shortage of domestic labor. Though more may lower production capacity unless than 23 percent of Maldives land is devoted adaptations are made. Challenges include to agriculture, it makes up only a little over less carbon dioxide availability (which affects 4 percent of the economy (FAO 2017), and the all photosynthesis), changeable and intense sector accounted for only 5.2 percent of GDP precipitation and temperatures, limited in 2017. The country imports 90 percent of the availability of fresh water, soil organic matter food it consumes, including fresh produce transformation, soil erosion, changes in pest and rice. During an extreme weather event, and disease profiles, and a decline in arable challenges with the distribution of food across areas due to the submergence of coastal the country, limited food storage facilities, lands (ADB 2021). Despite these limitations, and disruptions to both land- and sea-based agriculture is a key sector the country should transport would likely hinder the population’s consider for investment, adaptation, and access to food. Additionally, since fish is innovation in order to create a more food- the primary source of protein for Maldivians, secure population. 101 5.3.2 Education Climate change poses a range of direct and diminished educational attainment, lower human indirect challenges for education. The direct capital accumulation, reduced labor productivity, impacts include potential damage to school hindered economic opportunities, and increased infrastructure; indirect consequences include poverty rates. adverse effects on accessibility such as the disruption or destruction of roads caused by The changing climate also exerts a direct flooding or other extreme weather events, influence on employment and training circumstances that can hinder students’ and choices, particularly impacting vulnerable teachers’ ability to reach schools, leading to populations. Impoverished boys and young prolonged absences, school closures, and a men frequently encounter circumstances that heightened risk of students dropping out. Even necessitate seeking low-paying, labor-intensive with functioning schools and roads, climate- and precarious jobs for immediate income, related disasters or ongoing environmental diverting their focus from pursuing education degradation can push children from financially to alleviate long-term financial burdens and stressed families into day labor, negatively provide for their families. These climate-related affecting their educational progress, and can force risks underscore the crucial significance of girls into early marriages if their family feels they inclusive education and skills training systems need the dowry to supplement their resources. A that encompass all children and adults who family may also find the idea of their daughter’s are out of school, thereby fostering elevated early marriage attractive as a way to cut down on learning levels and expediting the enhancement the family food bill. The compounded effects of of human capital. climate change and disasters disproportionately affect the most vulnerable children, including Fundamental literacy, numeracy, and those who are already experiencing educational socioemotional skills are paramount in exclusion, particularly girls and children from determining individuals’ readiness for learning, disadvantaged backgrounds. both within formal education settings and when adapting to disruptions in the job market. Extreme, prolonged heat directly impacts learning Regrettably, curricula often fail to keep pace with outcomes, as evidenced by research indicating the evolving demand for the new skills required that a child exposed to temperatures 2°C above in newly emerging sectors, industry fields, and the average is expected to achieve 1.5 fewer years economies. Starting with very young children, of schooling compared to those experiencing schools can integrate climate and hazard average temperatures. This loss in education awareness, efficient utilization of resources, and and learning perpetuates a damaging cycle of environmental care into their subjects to instill learning poverty and foregone future earnings behavioral changes that will persist throughout that can affect an entire generation. Because the children’s lives. This would position the affect agriculture and food production, the educational institutions to equip their students consequences of extreme, prolonged heat are with the requisite knowledge, skills, values and particularly severe for young children, leading outlook to navigate the challenges presented to elevated rates of malnutrition and stunting, by climate change, resource scarcity, and especially among those under the age of 2. increased global competition, thereby ultimately Such effects directly impact their cognitive redirecting the nation’s developmental trajectory development and, in the long term, contribute to toward a sustainable future. 102 Maldives Human Capital Review Unleashing People’s Full Potential access to a varied diet. Poor and vulnerable 5.3.3 Health households are disproportionally at risk of Health threats due to climate change in the hunger and undernutrition. It is estimated that Maldives will stem from sea-level rise, higher the global risk of hunger and malnutrition will frequency and intensity of floods and storms, increase to 20 percent by 2050. The Maldives heat stress, and the spread of vector-borne is already well on its way toward this prediction diseases. Weather events can have both direct unless the country changes course. As of and indirect impacts: direct human impacts can 2017, 14.8 percent of children under 5 (more include sickness and death from dehydration, than one in seven) are underweight,24 15.5 injury, drowning, and disease. Indirect health percent suffer from stunting,25 and 9.1 percent effects may include impacts on food production exhibit wasting (World Bank n.d.c).26 as discussed above, water provision, ecosystem disruption, infectious disease outbreaks, and • Infectious and vector-borne diseases: vector distribution. Over the long term, climate Temperature extremes and changing change impacts can result in post-traumatic precipitation patterns affect the geographic stress, reduced access to services, and distribution, seasonality, and incidence population displacement (WHO and UNFCCC of disease vectors and the diseases they 2016). Specific climate change-related factors transmit (NIEHS 2022). Climate conditions may include: are projected to become significantly more favorable for the transmission of infectious • Heat-related sickness and mortality: and vector-borne illnesses, increasing the Increases in mean annual temperature and risk to many populations if control measures higher intensity and more frequent heat are not maintained or strengthened (WHO waves will likely result in greater incidences and UNFCCC 2016). of heat exhaustion, heatstroke, and hyperthermia. Extreme heat can also worsen • Air pollution: Polluting forms of energy are chronic conditions such as cardiovascular major drivers of climate change and also disease, respiratory disease, cerebrovascular contribute to worsening air quality. In the disease, and diabetes-related conditions. Maldives, it is estimated that approximately The elderly, children, the chronically ill, 9 percent of the population in rural areas the socially isolated, and manual laborers use primarily solid fuels such as charcoal, working outdoors are particularly vulnerable crop waste, or dung for cooking, thereby to heat-related conditions (NIEHS 2022). increasing the risk of ischemic heart disease, stroke, lung cancer, chronic obstructive • Undernutrition: Higher temperatures, land pulmonary disease and acute lower and water scarcity, flooding, drought and respiratory due to household air pollution. displacement negatively impact agricultural Women and children are at especially great production, create disruptions to fisheries, and risk of becoming ill from household air can cause breakdowns in food systems and pollution (WHO and UNFCCC 2016). 24 The prevalence of underweight children is the percentage of children under age 5 whose weight for their age is more than two standard deviations below the median for the international reference population ages 0–59 months. 25 The prevalence of stunting is the percentage of children under age 5 whose height for their age is more than two standard deviations below the median for the international reference population ages 0–59 months. 26 The prevalence of wasting is the proportion of children under age 5 whose weight for their height is more than two standard deviations below the median for the international reference population ages 0–59. 103 a third of government revenue (ADB 2021). 5.3.4 Livelihoods The sector is a big driver of employment and Tourism and fisheries are the primary a source of income for the local population economic drivers in the Maldives and both in service areas such as accommodation, sectors are highly vulnerable to the impacts catering, handicrafts, transport, and outdoor of climate change. These two sectors together activities like diving, boat tours, and account for three out of four jobs in the country, parasailing. More than a fifth of the population 90 percent of its GDP, and almost all its foreign is engaged in the tourism sector, and visitor exchange earnings (Waheed 2020). exports and investments in the sector are expected to grow over the next ten years. Since tourism is highly dependent on the dry Fisheries season and on environmental capital such as Fisheries are a critical component of pristine beaches, coral atolls, marine life and the Maldivian economy, with more than a pleasant climate, it is particularly vulnerable 20 percent of the population employed in to climate impacts. Tourism infrastructure this sector, and is a major contributor to the such as resorts but also airports and financial subsistence of the local labor force communications infrastructure are typically (besides providing the population’s primary located within 100 meters of the coastline. source of dietary protein). Tuna is the most Over time, rising sea levels, shoreline and common fish and appears daily in the local beach erosion, coral bleaching, a reduction in diet. Tuna fisheries are highly seasonal, with sea life, and supply chain disruptions will likely catches peaking around April and November, reduce the quality of resort and beach spaces at the onset and offset of the Northwest and the range of tourism-related activities monsoon season. However, in the past few available (ADB 2021). In fact, 62 percent of years, the fishing season has followed irregular all inhabited islands and 45 percent of tourist trends, which may be attributed to changes resorts already report experiencing extensive in local weather, sea water temperatures, and beach erosion (UNDP n.d.). PH levels caused by global climate change (FAO 2023). Tuna has a strong preference for Beach activities such as snorkeling and specific conditions of the ocean environment, diving are major draws for tourists from and given the climate projections, it is possible around the world and will be highly that a greater proportion of tuna catch will need impacted by climate change. In a survey to be made in international waters. In addition, by the Ministry of Tourism in 2017, when coral reefs are linked to the fisheries sector, asked what their main purpose of visiting the and demand for reef fish has been increasing Maldives was, 8 percent of respondents said over the years (ADB 2021). snorkeling and 6 percent said diving. When asked about what they most liked about the Maldives, 27 percent said the beach, Tourism 22  percent said marine life, and 16  percent Tourism, the Maldives’ main economic driver, said snorkeling and diving (Ministry of Tourism is highly vulnerable to climate change and 2017). Environmental degradation, loss of will likely face major challenges moving coral reefs, and coastal erosion all threaten forward. Tourism accounted for a quarter of the recreational snorkeling and diving sector national GDP in 2019, is the country’s fastest- as well as the beaches and marine life. growing sector, and accounts for more than 104 Maldives Human Capital Review Unleashing People’s Full Potential increased risk of livelihood insecurity and 5.4 Climate change and impacts overall loss of wellbeing (IFRC 2021). Many on at-risk populations migrants are also prone to becoming more exposed to infectious diseases during transit Although climate change will impact everyone, and resettlement, becoming infected by or foreign and domestic migrants, the most at-risk transmitting diseases to host populations, and population groups—rural women and children, engaging in health behaviors that increase communities residing in the remote northern communicable disease risk (IFRC 2021). and less-developed atolls, and persons with disabilities—face numerous systemic economic and social obstacles to their progress that 5.4.2 Women emerge as a result of their response to climate change challenges. Although the Maldives has made significant progress in the legal codification of gender equality over the past 30 years, other indicators of gender equality indicate that 5.4.1 Domestic and there has been less progress. The Maldives foreign migrants has taken steps to strengthen and further Migration from the outer atolls is one align its legal framework with gender-related response to climate change in communities provisions and principles in international law, with higher levels of poverty, limited access such as the Convention on the Elimination of to resources and healthcare facilities, and all Forms of Discrimination Against Women greater dependence on natural resources (CEDAW). However, Maldives’ rank as 83rd out such as fishing and agriculture. Extensive of 191 countries on the 2021 UNDP Gender internal migration from the provinces to the Inequality Index points to the fact that Maldivian capital to find employment are common in women still face high discrimination in health, the Maldives, mainly for livelihood, social and empowerment, and the labor market.27 environmental reasons (Asia-Pacific RCM Thematic Working Group on International Rural women in the Maldives tend to be Migration 2012). Migrants come to urban more dependent on climate-sensitive natural centers for better economic opportunities resources and activities for their livelihoods, and tend to be men, often leaving their wives such as subsistence farming, home gardening, and families behind (IFRC 2021). Higher coconut collection, handicrafts, rope migration often leads to the urbanization of weaving, and fish processing (IFRC 2021). health problems and mental health challenges. Women participate in all areas of agriculture Migrants face numerous systemic economic and horticulture as well as fish-related, post- complications such as informality, unsteady harvesting activities aimed at adding value work, income disparities, lack of information, such as drying and salting. Recent declines in and lack of social safety nets, as well as social the fishery sector have impacted women the challenges such as family separation, poor most. Additionally, the migration of men to urban living conditions, discrimination, ostracization, centers to look for job opportunities results in negative profiling/stereotypes, and limited women being left on their own to maintain the access to services. This places them at household and care for children and older 27 In 2021, Maldives scored 0.348 (lower being better) on the UNDP Gender Inequality Index, placing it 83rd (higher being better) out of 191 countries (IFRC 2021). 105 parents (more than 50 percent of households are concentrated in the less developed Northern female-headed). Female-headed households region. Climate-driven poverty will likely tend to be poorer than other households contribute to poor dietary habits and low access because of lower income, limited diversification to vitamin-rich vegetables and fruits as well options, and limited control over household as reduced access to fish as the main dietary assets (El-Horr and Pande 2016). source of protein. In addition, 28.36 percent of boys and 45.42 percent of girls in Maldives are anemic (iron-deficient), resulting from a diet poor 5.4.3 Persons with disabilities in red meat and other iron sources (Orłowska 2018). Access to drinking water is limited on Persons with disabilities are more likely most islands largely because of factors such as to have adverse socioeconomic outcomes saltwater infiltration and contamination issues. such as less education, poorer health, Communicable diseases connected with climate lower levels of employment, and higher change are causing morbidity among Maldivian poverty rates (IFRC 2021), as well as children, according to WHO. These diseases discrimination and exclusion from the include dengue, scrub typhus, toxoplasmosis health, education, employment, social due to diarrhea, and acute respiratory infections and governance spheres. They therefore (Orłowska 2018). As a result of poor water have less resources and capacities to draw security, many children and adolescents are on to adapt to a changing climate (IFRC additionally exposed to water-borne diseases 2021). Women with disabilities tend to have (UNICEF 2015). even fewer resources and skills, face higher social discrimination, and have limited work opportunities than women without disabilities. 5.5 Responses to date More women also work as caregivers to not only children but also both men and women Recognizing the detrimental impact of climate with disabilities, even as they face gender- change on the country, the Government has based barriers to access to health facilities been proactive in disseminating policies and and secure livelihoods (IFRC 2021). plans to mitigate these impacts and adapt the country to climate and disaster risks.28 For example, the 2019–2023 Strategic Action 5.4.4 Children Plan aims to promote climate resilience and sustainability and treats climate change as a The food security, health and livelihoods cross-cutting issue. For example, Action 1.2 challenges discussed above also have a considers climate change a health risk, and distinct impact on children because they are commits to monitoring the heath impacts of still growing, are at greatest risk of injury, climate change and reorienting programs to disability or death caused by climate change, address emerging diseases and health impacts. and are less mentally and emotionally Policy 3 intends to mainstream climate- equipped to cope with life-threatening smart, sustainable agricultural practices and conditions (World Vision n.d.). One-third of to address the impact of climate change on Maldivians are children or adolescents, mainly livelihoods. The ambitious plan also covers 28 Additionally, the Government of Maldives is party to several international treaties. The main ones are Biodiversity, Climate Change—Kyoto Protocol, the Montreal Protocol, the UN Framework on Climate Change, and MARPOL Ship Pollution. Maldives is also a member of the Intergovernmental Organization for Marketing Information and Technical Advisory Services for Fishery Products in the Asia and Pacific Region (INFOFISH) and the Bay of Bengal Programme (BOBP). 106 Maldives Human Capital Review Unleashing People’s Full Potential resilient infrastructure and the protection of various programs and policies, the aim is natural resources, and advocates for climate- to mainstream disaster risk reduction at the sensitive social protection (Government of national level (ADPC and UNDRR 2019). Maldives 2019).29 Beyond the policy level, the government has The Ministry of Environment and Energy, in invested in physical adaptations to counter August 2015, published the Maldives Climate climate change impacts. These include the Change Policy Framework, setting out the key promotion of desalination water plants and the issues and steps that the government and elevation of water storage systems to counter other stakeholders, ranging from NGOs to the saltwater intrusion and to increase access to private sector to the people of the Maldives, clean drinking water; building sea walls around should focus on to mitigate and adapt to the Malé; and building artificial islands so that families effects of climate change. The framework impacted by climate change can move to urban focuses on low emissions development aimed centers where there are more economic and at stabilizing greenhouse gases, adaptation educational opportunities. Other interventions of ecosystems to climate change, the safety that aim to mitigate the impacts of climate change for food production, sustainable economic include improved waste management practices, development, and meeting international enhancing water harvesting, and promoting obligations. These goals are intended to be deep-sea tuna harvests (IFRC 2021). achieved through a combination of technology transfers, finance and capacity building (Ministry Although the multi-faceted impact of climate of Environment and Energy 2015). change is high up on the government’s agenda, the implementing protocols may thus Climate change adaptation has been far not be enough. The “soft” aspects of climate mainstreamed into several national disaster change adaptation also need to be reinforced. risk reduction policies over the past 25 years. Systematic and accurate data collection Key policies are the 2014 Community Based of weather- and climate-related indicators Disaster Risk Management Framework, the throughout the islands is necessary to ensure 2015 Disaster Management Act, the 7th National that adaptations are evidence-based. Meaningful Disaster Management Plan (NDMP), the National engagement of communities and civil society is Emergency Operations Plan (NEOP), the 2010– necessary to ensure that the implementation of 2020 Strategic National Action Plan for Disaster policies is relevant and sustainable (IFRC 2021). Risk Reduction and Climate Change Adaptation Measuring outcomes regularly through both (SNAP), and the 2014–2024 Maldives Climate quantitative and qualitative methods is needed Change Policy Framework (MCCPF). All of these to assess progress against stated objectives policies use a community-based disaster risk and to adapt programs and policies to ensure management approach to create awareness they are on track to achieving their goals. Finally, and action plans as well as capacity building the government needs finance and capacity to and adaptation measures around climate and enact the above measures in a meaningful way disaster risks throughout the country. Through (IFRC 2021). 29 The 2015 Intended Nationally Determined Contributions and 2020 Update of Nationally Determined Contribution also set out the government’s commitments for climate change adaptation and mitigation. The main foci of intervention include targets related to agriculture and food security, infrastructure resilience, public heath, water security, coastal protection, coral reef biodiversity, tourism, fisheries, disaster risk reduction, early-warning systems, and improved weather forecasting. The document, updated every five years, was submitted to the United Nations Framework Convention on Climate Change (UNFCCC). 107 Source: ©Jag_cz/Shutterstock Chapter 6 Conclusions and Recommendations In the current fiscally constrained, post- social protection that enables them to be resilient COVID-19 context, Maldives must prioritize against shocks of various kinds. high-impact human capital investments that can promote increased equity, resilience To achieve these objectives, which would enable and opportunity, as well long-term economic Maldives to leapfrog in terms of human capital growth. Improving human capital accumulation accumulation and utilization, this report identifies and utilization for all and boosting future the following recommendations at the national productivity require synergistic investments in and sector levels: health, education, and nutrition throughout an individual’s life cycle, supported by resilient delivery systems to support people during crises 6.1 At the national level and to avoid erosion in human capital. • Increase the level and efficiency of social sector spending for improved human Moving forward, and to address the main development and macro-fiscal outcomes. challenges identified in this report, Maldives Despite the social sectors making up a large should: (i) address persistent geographic share of the government’s budget, spending disparities in access to education; (ii) focus on remains inefficient and heavily geared improving the quality of education for all; (iii) tackle towards health insurance and pensions. It the relatively high levels of stunting, with a focus is therefore important to continue investing on those regions with the worst outcomes; and in system strengthening for increased (iv) promote better employment outcomes for efficiency gains as well as to, for example, Maldivian women. At the same time, Maldives ought engage in difficult reforms (i.e.: subsidy to: (v) increase the efficiency and effectiveness of reform) and re-allocate some of the savings social sector spending to enable people to obtain to promote more and better investments in good-quality education, maintain good health, find human development. good jobs, and secure access to comprehensive 109 • Integrate and strengthen service provision it is equally important to address challenges on toward greater promotion and protection the demand side of the labor market related of human capital. A whole-of-government to limited jobs and high reservation wages. approach is necessary to promote human Creating more and better jobs is necessary to capital accumulation and protect it during curb unemployment, especially as the country crises. Integrated and coordinated efforts across undergoes its demographic transition, and sectors are important to address persisting during the current peak of the WAP . In particular, challenges such as stunting and poor learning supporting the fishing industry through outcomes. Effective coordination will require market diversification and modernization—for putting in place institutional arrangements, example, supporting the nascent guesthouse with clear roles and responsibilities for each sector through better regulation and upscale institution, and the development of referral marketing, among other things—would protocols and cross-sectoral monitoring tools. bring higher returns, offer more resilience to Maldivians, protect human capital gains, and • Promote social and geographic equity promote more equitable growth. through needs-based budgeting. The national budgeting process can be used as a tool for • Improve data collection, relevance, analytics promoting equitable outcomes, through the and reporting, and align these with the allocation of enhanced public resources national policy vision. As the Maldives moves based on degree or complexity of needs. For forward with its development plan to establish example, gender-responsive budgeting is used regional economic hubs, data and reporting today by more than 80 governments world-wide ought to follow this subnational division. The to advance gender equity. The Maldives could country can begin by establishing baselines in use its budgeting process to tackle particularly order to be able to measure progress down gender and geographic inequalities in service the road. Data quality and reporting is another delivery and labor markets. issue that calls for attention. Education statistics, for instance, reflect only the total • Improve the management of the social number of children enrolled yearly at the sectors’ workforce. In all human development national, atoll, and island levels. Enrollment sectors, it is difficult to attract and maintain rates, which is a better indicator of access, are qualified professionals because of low provided only at the national level. salaries. Staffing is often insufficient or poorly distributed across the country. In the education 6.2 Sector-specific sector, for instance, there is a shortage of recommendations teachers, especially trained ones, and the geography of the Maldives renders this issue 6.2.1 Education even worse. Promoting effective management • Improve child development and learning of social sectors’ workforce will inevitably outcomes by integrating high-quality, lead to improved equitable access to quality contextually relevant parenting and services, thus boosting human development behavioral change programs into existing levels, productivity and economic growth. health, social protection, and education platforms. Early intervention, including • Support private sector-led job creation. access to early childhood education, is Although it is necessary to improve the quality vital to mitigating risks and promoting and relevance of education and access to protective factors that shape healthy brain upper and tertiary education on the supply side, 110 Maldives Human Capital Review Unleashing People’s Full Potential development, yielding gains for future dispersed geography poses intrinsic health, learning, and productivity. challenges to educational access, MFPs can be an important strategy to improve access • Continue investing in improving the quality to learning, particularly at the secondary level, of education. The government is aware of in those regions that lack secondary schools. the challenges in the quality of education Although the Maldives has implemented some and has therefore laid out a strategic vision flexible learning options, including the use of in its Education Sector Plan (2019–2023) for technology and distance learning, as part of improving learning outcomes. This vision its upper secondary education development includes a series of initiatives that include, strategy and during COVID-19, development among other things, strategies for effective and implementation of this strategy are still curricula implementation, school-based at a nascent stage. The Maldives needs to professional development of teachers, develop and effectively implement a robust, and the introduction of a quality assurance flexible learning system that can address its framework and system to monitor the quality access challenge. of schools. Ensuring proper implementation of these initiatives will require financial and • Develop an evidence based TVET system human resources, technical capacity, and that is responsive to labor market needs. a mechanism to systematically monitor, In many developed countries, TVET is assess, and make course corrections to considered an important strategy to build implementation if need be. human capital and prepare students for the labor market (OCED 2010). TVET, when • Strengthen and improve the use of properly planned and implemented, has national assessments for raising the great potential to address labor needs quality of the education system. National (World Bank 2021). assessments are designed to provide evidence and feedback to improve a country’s education system. Although the 6.2.2 Health Maldives has been conducting national • Improve maternal and childhood nutrition assessments (specifically, NALO) since 2015, to reduce stunting and malnutrition. it needs to further develop its institutional Childhood malnutrition significantly hinders and technical capacity to administer and use health and human development outcomes the results of the assessment to improve the in the Maldives, and efforts should therefore quality of education. Coordination and links be made to improve maternal and childhood between the Quality Assurance Division— nutrition, particularly in the first 1,000 days of the unit responsible for NALO—and the each child’s life, through more comprehensive different units of the Ministry of Education, growth monitoring, better breastfeeding and including the National Institute of Education, diet practices in the community and the need to be strengthened to ensure that the household, as well as early diagnosis and findings of national assessments translate intervention for malnutrition. into appropriate policy actions. • Reform health financing and payment • Improve access to upper-secondary mechanisms for Aasandha. Aasandha, the education through the expansion of national health insurance scheme, has a very multiple and flexible learning pathways significant role to play in shaping an efficient (MFPs). In a country like Maldives where and effective health system. Provider payment 111 reforms can help optimize resource allocation well-designed feedback loop to capture and and improve the efficiency of service delivery. respond to detailed end-user experience in as Currently, hospitals are reimbursed through close to real time as possible. Strengthening an inefficient fee-for-service payment preventive care and primary healthcare for method in which all itemized expenses are NCDs, particularly in the atolls, can enhance paid by Aasandha. However, the global norm promotive and preventive healthcare services is to adopt a case-based approach, such as and eventually limit the growth of healthcare diagnosis-related groups, which implies the costs. Considering the unique geography of sharing of financial risk with the provider. the Maldives, telemedicine (both domestic Adopting such an approach would help to and international) and digital health offer incentivize more judicious use of Aasandha opportunities to bridge gaps in service resources. Developing the ability to leverage provision. Rotating specialists from Malé to the claims data for strategic purchasing would atolls on a short-term or roster basis could also lead to better-informed decision-making ensure broader access to good-quality care. and more efficient resource management in healthcare financing efforts. Aasandha could also benefit from a well-defined and 6.2.3 Social protection costed benefits package of services. In • Continue to invest in integrated and addition, introducing benchmarking tools adaptive social protection systems to into the current outpatient reimbursement ensure equity, resilience, and opportunity scheme could generate significant savings. for all. Well-designed, integrated social The first step, currently being implemented, protection systems protect individuals and is to conduct internal benchmarking and households against risks throughout the life set a unified price (a reimbursement rate). cycle and address their specific needs as and In the future, it may be useful to compare when they arise. They encompass an array of Maldives’ prices with those of other countries programs that promote and protect human and explore the possibility of developing capital during the human capital-formative an external reference pricing structure for years, facilitate its utilization during adulthood, various services, devices, and procedures. and provide social care during old age. Adaptive social protection systems, on the • Redesign the health service delivery other hand, promote household resilience in system to tackle the growing burden of the face of shocks, including through programs NCDs more effectively. Establishing an that diversify assets and income, and ensure integrated, people-focused continuum of swift system response to crises. care that incorporates effective referral links is crucial to maintaining high-quality healthcare • Begin by further integrating and services. Strengthening primary healthcare consolidating the demand side of the capacity, guided by evidence-based treatment social protection system by developing protocols, is central to improving the quality of the existing social registry as a gateway care and enhancing health system efficiency. for social services. This would facilitate the Strengthening the quality of health services access of both individuals and households requires (i)  effective accreditation systems, to all the services for which they are eligible (ii) a focus on evidence-based treatment under social protection, streamline the protocols, including regulatory supervision application process, and cut administrative and monitoring of these protocols, and (iii) a costs on the supply side of the system. 112 Maldives Human Capital Review Unleashing People’s Full Potential • Further expand social protection • Continue to invest in active labor market information systems to help scale up and programs and encourage partnerships speed up response during a shock. NSPA’s between the job center network and work in establishing a registry for people with employers. Apart from increased and disability (PWD) that can be accessed from prioritized education sector investments island councils is commendable. However, to improve access to, and the quality and more should be done to build an information relevance of, education, active labor market system in support of creating a universal programs are important to help address any social registry that is comprehensively and information asymmetry and intermediation thoroughly populated. The interoperability gaps in order to link individuals to jobs, of the social registry with other information especially those programs that target youth systems and programs is also critical. and women. Furthermore, ensure that The government’s work to develop a reskilling, upskilling, TVET, and other labor system to continually update the MPAO’s market programs are designed in response to beneficiary registry and link it to other regular labor market demand assessments. government services should be promoted. Other information systems such as the • Address challenges to female labor PWD registry and eFaas, Maldives’ national market participation. Increasing the digital identification card system, should be participation of females requires ensuring integrated and interoperable with the social access to reliable child-care services, registry to allow for optimized social spending addressing social norms that restrict female and to prevent the overlap of benefits. mobility, and ensuring safe sea travel and culturally appropriate accommodation on • Revisit social assistance benefit levels in resort and industrial islands. This would not terms of generosity and targeted groups. only help address poverty and human capital Currently, social assistance spending is heavily accumulation deficits at the subnational skewed toward old age through a generous level but also contribute to increased, more old-age pension. Little is dedicated to early equitable, and sustainable growth. childhood and school-age children. Greater focus should be given to early childhood and school-aged children. Another rationale for revisiting benefit levels is that the current social pension is unsustainable, especially in light of the country’s fast-changing demographic structure. • Rationalize the universal health insurance program both from a targeting perspective and from a program operations perspective. Savings from spending on the Aasandha program could be redirected to broaden the coverage of safety net programs. Measures to improve access to the disability certification process would also help enhance safety net coverage. 113 List of References ADB. 2021. Climate Risk Country Profile: Maldives. Mandaluyong, Philippines: Asian Development Bank. https://www.adb.org/publications/climate-risk-country-profile-maldives. ADPC and UNDRR. 2019. Disaster Risk Reduction in Republic of Maldives: Status Report 2019. Bangkok and Geneva: Asian Disaster Preparedness Center (ADPC) and United Nations Office for Disaster Risk Reduction (UNDRR). https://www.undrr.org/publication/disaster-risk-reduction-republic-maldives. Allais, S. 2017. “Labor market impact of national Qualification Frameworks in six countries.” Geneva: International Labour Organization. https://www.ilo.org/skills/pubs/WCMS_585696/lang--en/index.htm. Areeba. 2022. “N. Lhohi faces food shortage amid sea transport disruption.” The Times of Addu, May 19, 2022. https://timesofaddu.com/2022/05/19/n-lhohi-faces-food-shortage-amid-sea-transport-disruption. Asia-Pacific RCM Thematic Working Group on International Migration including Human Trafficking. 2012. Situation Report on International Migration in South and South-West Asia. Asia-Pacific Regional Cooperation Mechanism Thematic Working Group on International Migration including Human Trafficking. https://www.unescap.org/sites/default/files/SDD_PUB_Sit-Rep-book.pdf. Asra, M., L. Xiaofang, U. H. Ijaz, B. P. Asfia, S. Yingying, Q. Rui, H. Manli, D. Ye, and W. Zhixu. 2020. “Malnutrition associated factors on children under 5 years old in Lhaviyani Atoll, Maldives.” Journal of Biomedical Research 34, no. 4 (March): 301–08. Doi: 10.7555/JBR.33.20180141. Blum, F. M. and P. S. Yoong. 2020. Maldives Development Update 2020: In Stormy Seas. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/336011591808041663/pdf/Maldives- Development-Update-In-Stormy-Seas.pdf. Cazzaniga, E., Antonina O., A. Terenzio, C. Suardi, C. Mognetti, F. Gennaro, L.Antolini, and P. Palestini. 2022. “Health Status and Nutritional Habits in Maldives Pediatric Population: A Cross- Sectional Study.” Int J Environ Res Public Health 19, no. 23 (November): 15728. doi: 10.3390/ijerph192315728. Chitrakar, R. 2009. Overcoming Barriers to Girls’ Education in South Asia: Deepening the Analysis. Kathmandu, Nepal: United Nations Children’s Fund Regional Office for South Asia (UNICEF ROSA). http://www.paddle.usp.ac.fj/collect/paddle/index/assoc/ungei014.dir/doc.pdf. Currie, J., E. A. Hanushek, E. Megan Kahn, M. Neidell, and S. G. Rivkin. 2009. “Does Pollution Increase School Absences?” The Review of Economics and Statistics 91, no. 4 (November): 682–694. doi: https://doi.org/10.1162/rest.91.4.682. El-Horr, J. and R. P. Pande. 2016. Understanding Gender in Maldives: Toward Inclusive Development. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-0868-5. FAO. 2017. Maldives. Global Strategy on Agricultural and Rural Statistics (GSARS), Asia Pacific Country Series. Rome: Food and Agriculture Organization. https://www.fao.org/fileadmin/templates/rap/files/Project/Global_Strategy_Country_Pages/ Maldives/Maldives_flyer_FINAL.pdf. FAO. 2018. Country Programming Framework for Maldives: 2018 to 2020. Rome: Food and Agriculture Organization. https://www.fao.org/3/I8860EN/i8860en.pdf. FAO. 2023. Fishery and Aquaculture Country Profiles: Maldives, 2009. Country Profile Fact Sheets. Rome: Food and Agriculture Organization, Fisheries and Aquaculture Division. Updated June 7, 2023, last accessed August 16, 2023. https://www.fao.org/fishery/en/facp/mdv. FAO, IFAD, UNICEF , WFP and WHO. 2021. The State of Food Security and Nutrition in the World 2021. Transforming food systems for food security, improved nutrition and affordable healthy diets for all. Rome: Food and Agriculture Organization. DOI: https://doi.org/10.4060/cb4474en. Flabbi, L. and R. Gatti. 2018. A Primer on Human Capital. Washington, DC: World Bank. https://doi.org/10.1596/1813-9450-8309. Fulu, E. 2016. The Maldives Study on Women’s Health and Life Experiences: Initial Results on Prevalence, Health Outcomes and Women’s Responses to Violence. Malé: Ministry of Gender and Family, Republic of Maldives. https://maldives.unfpa.org/sites/default/files/pub-pdf/WHLESurvey_0.pdf. Global Nutrition Report. 2021. 2021 Global Nutrition Report: The State of Global Nutrition. Bristol, UK: Development Initiatives Poverty Research Ltd. https://globalnutritionreport.org/documents/753/2021_Global_Nutrition_Report.pdf. Global Nutrition Report. 2022. Global Nutrition Report: Stronger commitments for greater action. Bristol, UK: Development Initiatives Poverty Research Ltd. https://globalnutritionreport.org/reports/2022-global-nutrition-report. Golder, A. M., J. G. Erhardt, V. Scherbaum, M. Saeed, H. K. Biesalski, and P. Fürst. 2001. “Dietary Intake and Nutritional Status of Women and Pre-School Children in the Republic of the Maldives.” Public Health Nutrition 4, no. 3 (June): 773–80. https://doi.org/10.1079/PHN2000101. Government of Maldives. 2019. Strategic Action Plan, 2019–2023. Malé: The President’s Office, Republic of Maldives. https://storage.googleapis.com/presidency.gov.mv/Documents/SAP2019-2023.pdf. Government of Maldives, National Social Protection Agency. 2023. “Maldives National Social Protection Framework.” https://www.nspa.gov.mv/v2. Gunatilaka, R. 2013. Employment Challenges in the Maldives. Sri Lanka and the Maldives: International Labour Organization. https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-colombo/documents/ publication/wcms_232216.pdf. Hadad-Zervos, F. 2022. “Beyond Tourism: The evolving narrative of Maldives’ growth.” World Bank End Poverty in South Asia blog, March 31, 2022. https://blogs.worldbank.org/endpovertyinsouthasia/beyond-tourism-evolving-narrative-maldives-growth. ILOSTAT (International Labour Organization). n.d. website. https://ilostat.ilo.org. IFRC. 2021. Climate Change Impacts on Health and Livelihoods: Maldives Assessment. Geneva: International Federation of Red Cross and Red Crescent Societies. https://www.climatecentre.org/wp-content/uploads/Climate-change-impacts-on-health-and- livelihoods-MALDIVES-assessment_April-2021_.pdf. Kraay, A. 2018. “Methodology for a World Bank Human Capital Index.” Policy Research Working Paper 8593. Background paper to the 2019 World Development Report. https://thedocs.worldbank.org/en/doc/841571538503209726-0140022018/render/ HCIMethodologyPaper14Sept2018.pdf. Lama, P. D. 2018. “Gender equality, climate change and the myth of participation: The Case of the Maldives.” The Asia Dialogue, September 5, 2018. https://theasiadialogue.com/2018/09/05/gender-equality-climate-change-and-the-myth-of- participation-the-case-of-the-maldives. Maldives Bureau of Statistics. 2019. Household Income and Expenditure Survey (HIES) 2019— Employment. Malé: Ministry of National Planning Housing & Infrastructure, Republic of Maldives. https://statisticsmaldives.gov.mv/nbs/wp-content/uploads/2022/04/Employment-Summary.pdf. Maldives Bureau of Statistics, UNICEF Maldives, and Oxford Poverty and Human Development Initiative (OPHI). 2020. National Multidimensional Poverty in Maldives 2020. https://www.unicef.org/maldives/media/3116/file/National%20Multidimentional%20Poverty%20 in%20the%20Maldives.pdf. Maldives Monetary Authority. 2022. Economic Update January 2022, Volume 4 Issue 1. http://www.mma.gov.mv/documents/Economic%20Update/2022/EU-Jan-2022.pdf. Mcclain-Nhlapo, C. V., M. H. Koistinen, J. E. Lord, A. H. Martin, and T. R. Rana. 2022. Disability inclusion and accountability framework. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/437451528442789278/Disability-inclusion-and- accountability-framework. MED (Ministry of Economic Development), Government of Maldives. 2021. The Impact of COVID-19 Pandemic on Employment in the Maldives. Malé: The Ministry of Economic Development. https://trade.gov.mv/en/the-impact-of-covid-19-pandemic-on-employment-in-the-maldives. MFDA, Government of Maldives. 2017. National Food Safety Policy 2017–2026. Malé: Maldives Food and Drug Authority (MFDA), Ministry of Health. https://faolex.fao.org/docs/pdf/mdv172928.pdf. Ministry of Environment and Energy, Government of Maldives. 2015. Maldives Climate Change Policy Framework. Malé: Ministry of Environment and Energy, Climate Change Department, Republic of Maldives. https://policy.asiapacificenergy.org/sites/default/files/Maldives%20Climate%20Change%20 Policy%20Framework%20%28MCCPF%29%20%28EN%29.pdf. 116 Maldives Human Capital Review Unleashing People’s Full Potential Ministry of Tourism, Government of Maldives. 2017. Maldives Visitor Survey, September 2017. Malé: Ministry of Tourism, Republic of Maldives. https://www.tourism.gov.mv/dms/document/98405648b5cd73bbe99e5744eab23878.pdf. MOE (Ministry of Education), Government of Maldives. 2018. School Statistics 2018. Malé: Maldives Ministry of Education, Republic of Maldives. https://www.moe.gov.mv/assets/upload/STAT_BOOK_2018.pdf. MOE (Ministry of Education), Government of Maldives. 2019. Education Sector Analysis: Maldives. Ministry of Education, Republic of Maldives. https://support.moe.gov.mv/wp-content/uploads/2020/05/EDUCATION-SECTOR-ANALYSIS_ESA.pdf. MOE (Ministry of Education), Government of Maldives. 2020. School Statistics 2020. Malé: Maldives Ministry of Education, Republic of Maldives. https://www.moe.gov.mv/assets/upload/School_Statistics_20201.pdf. MOE (Ministry of Education), Government of Maldives, and Global Partnership for Education. 2019. Education Sector Analysis. Malé: Ministry of Education, Policy Planning and Research Division, Republic of Maldives. https://www.unicef.org/maldives/media/2976/file/Education%20Sector%20Analysis%20of%20 the%20Maldives.pdf. MOH (Ministry of Education), Government of Maldives, and ICF. 2018. Maldives Demographic and Health Survey (DHS) 2016-17. Malé, Maldives and Rockville, Maryland: Maldives Ministry of Health (MOH) and ICF International. https://www.dhsprogram.com/pubs/pdf/FR349/FR349.pdf. MOHF and ICF Macro. 2010. Maldives Demographic and Health Survey 2009. Calverton, Maryland: Maldives Ministry of Health and Family (MOHF) and ICF Macro. https://dhsprogram.com/publications/publication-fr237-dhs-final-reports.cfm. National Bureau of Statistics, Ministry of Finance and Treasury, Republic of Maldives, and United Nations Population Fund, Maldives Country Office. 2018. Maldives population projections 2014-2050: Assumptions and result analysis. Malé, Maldives. National Bureau of Statistics. 2020. Statistical Pocketbook of Maldives 2020. Malé: Ministry of Planning, Housing and Infrastructure, Republic of Maldives. https://statisticsmaldives.gov.mv/nbs/wp-content/uploads/2020/12/Statistical-Pocketbook- 2020-updated-12820.pdf. NIEHS (National Institute for Environmental Health Sciences). 2022. Human Health Impacts of Climate Change. Research Triangle Park, North Carolina: NIEHS. https://www.niehs.nih.gov/research/programs/climatechange/health_impacts/index.cfm. Orłowska, J. 2018. Effects of Climate Change on Children in the Maldives. New York: UNICEF. https://www.unicef.org/maldives/media/291/file/Climate%20Change%20and%20its%20 Effect%20on%20Children.pdf. Psacharopoulos, G, and H. A. Patrinos. 2018. Returns to Investment in Education: A Decennial Review of the Global Literature. Policy Research Working Paper no. 8402. Washington, DC: World Bank. DC. http://hdl.handle.net/10986/29672. 117 Pavlova, M. 2014. “TVET as an important factor in country’s economic development.” Springerplus 3, Suppl. 1 (December): K3. doi: 10.1186/2193-1801-3-S1-K3. Rahman, A., S. Rahman, M. A. Rahman, E. A. Szymlek-Gay, R. Uddin, and S. M. S. Islam. 2021. “Prevalence of and factors associated with anaemia in women of reproductive age in Bangladesh, Maldives and Nepal: Evidence from nationally-representative survey data.” PLoS ONE 16 (1): e0245335. doi: 10.1371/journal.pone.0245335. Schady, N., A. Holla, S. Sabarwal, J. Silva, and A. Y. Chang. 2023. Collapse and Recovery: How the COVID-19 Pandemic Eroded Human Capital and What to Do about It. Washington, DC: World Bank. http://hdl.handle.net/10986/39403. Segnana, J., M. J. Bricker, and J. Bajwa. 2022. Poverty and Inequality in Maldives – 2022. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/099050006092240654/pdf/ P175692013149d03082ee01cbf1e014aed.pdf. Shafeeu, I. 2019. “Relationship Between Principals’ Instructional Leadership and School Effectiveness. Does It Make a Difference? Evidence from the Maldives.” PhD diss., University of Durham, UK. http://etheses.dur.ac.uk/13134. Sundararajan, S. and H. Rabe. 2021. “Prevention of iron deficiency anemia in infants and toddlers.” Pediatric Research 89 (April): 63–73. https://doi.org/10.1038/s41390-020-0907-5. Thashkeel, A. 2018. “Local talent in the tourism industry.” Maldives Financial Review, November 18, 2021. https://mfr.mv/travel-and-tourism/local-talent-in-the-tourism-industry. Torlesse, H. and D. Raju. 2018. Feeding of Infants and Young Children in South Asia. Policy Research Working Paper no. 8655. Washington, DC: World Bank. http://documents.worldbank. org/curated/en/831741543414631952/Feeding-of-Infants-and-Young-Children-in-South-Asia. Trading Economics. 2023. “Maldives Food Inflation.” Last modified July 2023. Accessed August 15, 2023. https://tradingeconomics.com/maldives/food-inflation. UN Maldives. 2020a. Addressing the Socio-Economic Impact of COVID-19 on the Maldives: Reducing the impact of the health crisis on the most vulnerable and sustaining progress towards the 2030 Agenda. Malé: United Nations in Maldives. https://www.undp.org/sites/g/files/zskgke326/files/migration/asia_pacific_rbap/Maldives-Socio- Economic-Impact-Analysis.pdf. UN Maldives. 2020b. COVID-19 Socio-economic Response and Recovery Framework. Malé: United Nations in Maldives. https://reliefweb.int/report/maldives/united-nations-maldives-covid-19-socio-economic- response-and-recovery-framework?gclid=Cj0KCQjwldKmBhCCARIsAP-0rfzd5IlpczPsTgmVnBLA NQcTjjE5ekO7Ng7G93WHNyQFXJmDy1ZkHtQaAgATEALw_wcB. UNCTAD. 2022. Revisiting development strategies for small island developing States in the post- pandemic competitive landscape. Note by the UNCTAD Secretariat. Geneva: United Nations Conference on Trade and Development. https://unctad.org/system/files/official-document/ciiem6d2_en.pdf. 118 Maldives Human Capital Review Unleashing People’s Full Potential UNDP (United Nations Development Fund). n.d. Climate Change Adaptation: Maldives. New York: United Nations Development Programme. Last accessed August 16, 2023. https://www.adaptation-undp.org/explore/maldives. UNDP (United Nations Development Fund) and Maldives Bureau of Statistics. 2022. “Informal Sector Survey: Rapid assessment of the impact of COVID-19 on Informal sector, Maldives”. Malé, Maldives. https://statisticsmaldives.gov.mv/nbs/wp-content/uploads/2022/07/Informal-Sector-Survey-2021.pdf. UNDP and MED. 2020. Rapid Livelihood Assessment: Impact of the COVID-19 Crisis in the Maldives. Malé: United Nations Development Programme and Ministry of Economic Development, Republic of Maldives. https://maldives.un.org/sites/default/files/2021-03/1598369482.pdf. UNFPA (United Nations Population Fund). 2018. Maldives Population Projections 2014-2054: Assumptions and Results Analysis. New York: UNFPA. https://statisticsmaldives.gov.mv/nbs/wp-content/uploads/2018/07/UNFPA-Report-Maldives- Population-Projections-2014-2054.pdf. UNFPA (United Nations Population Fund). 2020. Against My Will: Defying the Practices that Harm Women and Girls and Undermine Equality. New York: UNFPA. https://esaro.unfpa.org/en/publications/against-my-will. UNICEF (United Nations Children’s Fund). 2023. “Maldives—Key demographic indicators.” UNICEF databank, last accessed August 14, 2023. https://data.unicef.org/country/mdv. UNICEF and UNESCO. 2021. Maldives Case Study: Situation Analysis on the Effects of and Responses to COVID-19 on the Education Sector in Asia. Nepal and Thailand: United Nations Children’s Fund (UNICEF) and United Nations Educational, Scientific and Cultural Organization (UNESCO). https://www.unicef.org/rosa/media/16526/file/Maldives%20Case%20Study%20.pdf. UNICEF Maldives. n.d. Education: Because every child deserves to learn. https://www.unicef.org/maldives/what-we-do/education#:~:text=Education%20is%20now%20 seen%20as,child%20up%20to%20grade%2012. UNODC (United Nations Office on Drugs and Crime). 2013. National Drug Use Survey. Maldives—2011/2012. Malé, Maldives: UNODC. https://www.unodc.org/documents/southasia//reports/National_Drug_Use_Survey_-_Report.pdf University of Bristol. n.d. Education in the Maldives. Bristol, England: University of Bristol School of Education. https://www.bristol.ac.uk/education/research/sites/smallstates/education-in-the-maldives. Waheed, H. 2020. Conserving Maldives’ Ocean Resources for a Sustainable Livelihood. World Bank news, February 27, 2020. https://www.worldbank.org/en/news/feature/2020/02/27/maldives-ocean-resource- conservation-sustainable-livelihood. WHO (World Health Organization). n.d. Global Health Expenditure Database. Last updated August 10, 2023. https://apps.who.int/nha/database/Select/Indicators/en. WHO (World Health Organization). 2023. “Maldives COVID-19 Dashboard.” World Health Organization, Regional Office for South-East Asia. Accessed August 7, 2023. https://covid19.who.int/region/searo/country/mv. 119 WHO and UNFCCC. 2016. Climate and Health Country Profile – 2015 Maldives. World Health Organisation and United Nations Framework Convention on Climate Change. https://www.who.int/publications/i/item/WHO-FWC-PHE-EPE-15.25. World Bank. n.d.a. “ASPIRE: The Atlas of Social Protection Indicators of Resilience and Equity.” World Bank databank, last accessed August 15, 2023. https://www.worldbank.org/en/data/datatopics/aspire. World Bank. n.d.b. Human Capital Project. https://www.worldbank.org/en/publication/human-capital. World Bank. n.d.c. “Prevalence of wasting, weight for height (% of children under 5) – Maldives.” World Bank databank of UNICEF , WHO and World Bank Joint Child Malnutrition Estimates, last accessed October 12, 2023. https://data.worldbank.org/indicator/SH.STA.WAST.ZS?end=2017&locations=MV&start=1994&view=chart. World Bank. n.d.d. World Development Indicators. World Bank databank, last accessed August 15, 2023. https://databank.worldbank.org/source/world-development-indicators. World Bank. 2014. Higher Education in the Maldives: An Evolving Seascape. Washington, DC: World Bank. https://documents.worldbank.org/en/publication/documents-reports/ documentdetail/305511468120885835/higher-education-in-the-maldives-an-evolving-seascape. World Bank. 2017. Maldivian labour market: spotlight on youth, tourism, and fisheries: Analysis based on census 2014. Washington, DC: World Bank. http://saruna.mnu.edu.mv/jspui/handle/123456789/5744. World Bank. 2020a. “2020 HCI: Country Briefs and Data.” World Bank Human Capital Project website. https://www.worldbank.org/en/publication/human-capital#Visualization. World Bank. 2020b. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19. http://hdl.handle.net/10986/34432. World Bank. 2021a. Early Learning and General Education in the Maldives: Performance, Challenges and Policy Options. Washington, DC: World Bank. https://documents.worldbank.org/en/publication/documents-reports/ documentdetail/889841625048965345/early-learning-and-general-education-in-the-maldives- performance-challenges-and-policy-options. World Bank. 2021b. “Global Wealth Has Grown, But at the Expense of Future Prosperity.” Press release, October 27, 2021. https://www.worldbank.org/en/news/press-release/2021/10/27/global-wealth-has-grown-but- at-the-expense-of-future-prosperity-world-bank#:~:text=The%20report%20shows%20that%20 human,total%20global%20wealth%20in%202018. World Bank. 2021c. Maldives Systematic Country Diagnostic Update. Washington, DC: World Bank. https://doi.org/10.1596/35512. 120 Maldives Human Capital Review Unleashing People’s Full Potential World Bank. 2021d. South Asia’s Digital Economy: An Opportunity to Build Back Better, Digitally. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/099230004062228270/ P1723000e5e0d20908c790a5ffdda147f1. World Bank. 2022a. Maldives Development Update: Navigating Choppy Seas. Washington, DC: World Bank. https://documents.worldbank.org/en/publication/documents-reports/ documentdetail/099240106152215221/p1774450f6c58a0140af4d0df92d59263c7. World Bank. 2022b. “Maldives Development Update: Rising Uncertainty Following the Strong Tourism-Led Recovery.” World Bank Who We Are blog, April 25, 2022. https://www.worldbank.org/en/news/feature/2022/04/25/maldives-development-update-rising- uncertainty-following-the-strong-tourism-led-recovery. World Bank. 2022c. “Maldives’ Economy Records Strong Recovery Amid Existing Weaknesses and Global Challenges.” World Bank press release, 13 April, 2022. https://www.worldbank.org/en/news/press-release/2022/04/13/maldives-economy-records- strong-recovery-amid-existing-weaknesses-and-global-challenges. World Bank. 2022d. “Maldives Public Expenditure Review: Charting a More Resilient and Prosperous Future.” World Bank website, Who We Are, August 9, 2022. https://www.worldbank.org/en/news/feature/2022/08/03/charting-a-more-resilient-and- prosperous-future-for-maldives. World Bank. 2022e. Maldives Public Expenditure Review: Restoring fiscal health. Washington, DC: World Bank. https://doi.org/10.1596/37879. World Bank. 2022f. Poverty and Inequality in Maldives. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/099050006092240654/pdf/ P175692013149d03082ee01cbf1e014aed.pdf. World Bank. 2022g. Telemedicine Readiness in Maldives for Pandemic Preparedness and Health Care Delivery in Atolls. Washington DC: World Bank. http://documents.worldbank.org/curated/ en/099205006202222611/P175636087e28b0d0a3f50150bb131cc5d. World Bank. 2023a. Education Statistics (EdStats). World Bank database, accessed August 15, 2023. https://datatopics.worldbank.org/education. World Bank. 2023b. Maldives Development Update, April 2023: Navigating a Tight Line. Washington, DC: World Bank. https://doi.org/10.1596/39627. World Bank. 2023c. “The World Bank in Maldives.” World Bank blog. Last updated April 6, 2023. Accessed August 14, 2023. https://www.worldbank.org/en/country/maldives/overview. World Vision. n.d. “Climate change: The effects on children.” World Vision Australia website, last accessed August 16, 2023. https://www.worldvision.com.au/global-issues/work-we-do/climate-change/climate-change- the-effects-on-children. Young, Malissa F. 2018. “Maternal anaemia and risk of mortality: a call for action.” The Lancet 6, no. 5 (May): E479–E480. DOI: https://doi.org/10.1016/S2214-109X(18)30185-2. 121 M A L D I V E S Human Capital Review Unleashing People’s Full Potential November 2023