The tourism sector, along with the services ecosystem, is the main driver of economic growth in the Maldives. This historically lopsided reliance on tourism earnings has taken a heavy toll on the local economy during the Covid-19 pandemic. The government's efforts in 2021-22 will be focused on reviving the economy by bolstering tourism activity in the islands. Alongside international marketing roadshows and loyalty programmes, the government plans to launch the 3V initiative-"visit, vaccinate, vacation"-whereby it will offer two vaccine doses to travellers, encouraging extended stays in the country's resorts. This is likely to be welcomed by tourists, the majority of whom are from high-income groups.

Vaccinating the entire population ahead of offering vaccines to tourists will be a priority for the government. With the easing of restrictions in early July and supplies of vaccines due by the end of the month, the government's vaccination programme is set to continue apace. We expect at least 60% of the population to be vaccinated by the end of the July-September quarter. The inoculation of resort employees, irrespective of their nationality, along with the country's unique "one island one resort" setup will put it in a favourable position to benefit from the anticipated recovery in international travel, especially during the end-year peak season.

Beyond the pandemic, Mr Nasheed's pursuit of a national referendum in 2022 to shift from presidential to parliamentary governance will occupy the political discourse. He has also sought, although to no avail, Mr Yameen's support to change the system of governance. Mr Solih, on the other hand, seems to be in favour of supporting the parliamentary scheme after the 2023 election, should he return as president, when he believes that the Covid-19 crisis will have abated. We expect the tussle on this matter to continue in 2021-22, putting any further reform measures under the Strategic Action Plan 2019-23 on hold.