The War in Ukraine: Maldives

The War in Ukraine and its Impact: The Maldives Perspective

The impact of Russia's war on Ukraine is being felt acutely across several countries, particularly in the Maldives because of its strong economic ties with Russia and Ukraine, the conflict having reduced the inflow of tourists from these two nations. Beginning on 24 February 2022, the conflict created more challenges for a global economy already struggling to recover from the COVID-19 pandemic, the war-induced economic disruption occurring for two reasons. The first of these was the slew of economic sanctions imposed on Russia by western powers such as the United States, EU, UK, Canada, Japan and other countries. The other was the blockade of Ukrainian ports and supply routes by Russia.

Tourism is the main industry of the Maldives, contributing 76% of the country's GDP. Before the war began, Russia was the top origin of tourists to the Maldives with 16.8% of total arrivals to the country, and Ukraine occupied eighth place with 2.3%. The war caused most Russian-based airlines (including Aeroflot, Russia's flag carrier) to cease all international flights to the Maldives.

While the Maldives has managed to attract tourists from other countries thanks to a vigorous marketing campaign by the Maldives Marketing and Public Relations Corporation (MMPRC), it has been unable to replace Russia as a tourist source with its population of 142 million people.

Russia’s aggressive war on Ukraine has triggered the biggest energy price shock since the 1970s, with market analysts predicting prices will remain high over the course of the next few years. Even though the Maldives is a high middle-income economy, it is import-dependent especially for oil and gas, making it vulnerable to fluctuations in fuel prices. Setting a new tourist arrival target of 2 million for 2023, the Maldivian government is still wary of the fallout from the Ukraine war, anticipating turmoil in oil and gas prices as well as fewer tourists from the two warring nations, which in turn may impact tourist arrivals from west European countries to the Maldives.