The Board of Executive Directors of the World Bank has approved USD 12.8 million as part of the COVID-19 Emergency Income Support Project to help the Maldives mitigate the economic impact of the pandemic on poor and vulnerable workers and their families.

A statement issued by the World Bank said that the new project will largely finance the Government’s COVID-19 Income Support Allowance scheme by providing temporary support of up to MVR 5,000 (approximately USD 322) per month to workers who have lost their jobs or income as a result of the COVID-19 pandemic to give a lifeline to struggling families and enable them to stay at home to prevent further spread of the virus, especially within the congested capital city.

World Bank's Country Director for Maldives, Nepal, and Sri Lanka, Idah Z. Pswarayi-Riddihough said that the drastic fall in tourism revenues and the constraints necessitated by the COVID-19 containment efforts have dealt a severe blow to the low income households.

She said that “this project will support the Government’s efforts to deliver cash transfers and food benefits directly to those who need them the most. The project will also strengthen the country’s social welfare system to improve its preparedness for future crises.”

The project will strengthen the Government’s capacity to distribute the allowance and other cash transfers. Administrative systems will be enhanced to give a greater role to local councils in helping people across the archipelago access support. A new unemployment insurance program, along with a far-reaching national social protection framework, will also be formulated and launched to help soften the blow on both employers and employees in future emergencies. Additionally, the existing retirement pension scheme and other similar programs will be reviewed to make sure future generations of Maldivians can reap the benefit.

Senior Economist and Task Team Leader, Thomas Walker said that “the current crisis shows the importance of having a safety net for all Maldivians, to prevent people from falling into poverty when times get tough, this project will help to build fiscally sustainable social protection programs that can reach any Maldivian who needs help.”

The COVID-19 Emergency Income Support Project will be implemented by the Ministry of Economic Development with support from the National Social Protection Authority and Maldives Pension Administration Office. The total project cost is USD 12.8 million, including a USD 6.4 million grant and a USD 6.4 million credit from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries.