The Economic Value of Marine and Coastal Biodiversity to the Maldives economy What biodiversity is worth to the National economy each year – direct values 100% 75% 50% 98% 71% 89% 25% 49% 62% 0% Employment Public Foreign Exports GDP revenues exchange Biodiversity-based sectors contribute: 71% of national employment (78,500 jobs) 49% of public revenue (Rf 2.5 billion) 62% of foreign exchange (US$ 435 million) 98% of exports (Rf 1.7 billion) Over recent years coastal zones have become the focus 89% of GDP (Rf 135 billion) of much attention at the global level. Their rich resources • Tourism employs 64,000 people or 58% of the workforce mean that they have long been important centres of trade • Tourism contributes public revenue of Rf 2.5 billion or 34% of and commerce. A large proportion of the world’s population all government receipts also live on the coast. Given the importance of coastal and • Tourism brings in US$ 434 million in convertible currency or marine areas in both conservation and development terms, 70% of all foreign exchange earnings there is increasing concern about the effects of environmental • Tourism accounts for Rf 1,920 million in capital investments or degradation, climate change and other human impacts on 29% of all investment these precious but threatened ecosystems. • Tourism generates direct and indirect consumption and spending of Rf 9,413 million Nowhere are these links more evident than in the Maldives, a • The current upstream contribution of tourism to the economy is nation of small islands which depends entirely on marine and US$ 764 million or 67% of GDP coastal resources, and contains some of the world’s richest • Fisheries yield processed products worth Rf 960 million in marine and coastal biodiversity. There are few other places company sales where an entire nation’s wellbeing is so closely linked to • Fisheries add Rf 12 million to the public budget marine and coastal ecosystems. For the Maldives, any threat • Fisheries create 14,500 jobs with wages worth Rf 510 million to biodiversity means adverse impacts on current economic • Fisheries produce export earnings worth Rf 1.7 billion or 99% wellbeing and future development. Clearly then, there is a of all exports strong imperative to recognise and demonstrate that there is an economic – in addition to a biological and ecological – rationale to biodiversity conservation. The problem of under-valuation Biodiversity degradation and loss is often seen as being a Recognising the critical importance of the natural resource solely biological or ecological problem. Far from this, it is also base, the Government of the Maldives has long pursued a critical problem in economic and development terms, due a strategy of marine and coastal conservation. The Atoll to the extremely high value of biodiversity. This is especially Ecosystem Conservation (AEC) project, implemented by the case in a country such as the Maldives, where most levels the Ministry of Housing, Transport and Environment with the and sectors of the economy depend intimately on biodiversity support of GEF and UNDP, is working for the “conservation and goods and services. sustainable use of globally significant biological diversity in the Maldives’ Baa Atoll”. Activities to address the links between the One of the most serious implications of under-valuing economy and biodiversity conservation form an important part biodiversitybiodiversity isis thatthat itit isis notnot accordedaccorded a sufficientsufficient prioritypriority inin nationalnational of the project. This briefing paper summarises the findings of policies,policies, planningplanning andand budgetsbudgets asas anan economicallyeconomically productiveproductive a study recently carried out by the AEC project, which looked sector.sector. CurrentCurrent investmentinvestment inin biodiversitybiodiversity doesdoes notnot adequatelyadequately at the economic value of marine and coastal biodiversity in reflectreflect itsits immenseimmense valuevalue toto thethe nationalnational economyeconomy andand futurefuture the Maldives. Other briefing papers have also been produced development.development. AsAs a resultresult thisthis vitalvital asset,asset, thethe “natural“natural capital”capital” ofof dealingdealing withwith thethe topicstopics of thethe valuevalue ofof biodiversitybiodiversity inin BaaBaa Atoll,Atoll, thethe Maldives,Maldives, isis beingbeing erodederoded withwith declinesdeclines ofof severalseveral harvestedharvested financingfinancing biodiversitybiodiversity conservation,conservation, and economiceconomic incentivesincentives marinemarine speciesspecies (sharks,(sharks, lobsters,lobsters, seasea cucumbers,cucumbers, ssomeome reefreef for biodiversity. fish),fish), pollutionpollution andand damagedamage toto reefsreefs fromfrom construction.construction. Produced for Atoll Ecosystem Conservation (AEC) Project by IUCN The direct value of marine and coastal biodiversity to How Maldivians and overseas tourists value marine the national economy and coastal biodiversity The AEC study found that marine and coastal biodiversity In addition to the values which are reflected in the national plays an immensely important role in the national economy. economy and through costs and damages avoided, humans The economic importance of biodiversity does not always show value the Maldives’ marine and coastal biodiversity and up in official statistics, because it remains buried in figures of ecosystems for a number of other important reasons. The output and income in other sectors. material benefits gained from biodiversity and its provisioning, regulating and supporting services is one reason for this value, The Economic Value of Marine and Coastal In order to highlight these “hidden biodiversity values”, the AEC but other factors such as enjoyment of the beauty of these study analysed two of the economic sectors in the Maldives natural ecosystems, interest in the unique and rare species that depend most on coastal and marine biodiversity: fisheries they contain, appreciation of their cultural, traditional and iconic Biodiversity to Baa Atoll economy and tourism. This involved tracing through all of the values significance, and wishes to ensure that coastal and marine that biodiversity provides to the economy via these sectors, biodiversity remains for the benefit of future generations, all such as income, employment, government earnings, foreign also contribute to these human values. the Ministry of Housing, Transport and Environment with the exchange and exports. support of GEF and UNDP, is working for the “conservation and The AEC project conducted and reviewed surveys of the sustainable use of globally significant biological diversity in the It is clear that the national economy could not prosper and way in which Maldivians and overseas tourists value marine Maldives’ Baa Atoll”. Activities to address the links between the grow without marine and coastal ecosystems and biodiversity. and coastal biodiversity. Interviews and questionnaires were economy and biodiversity conservation form an important part Fisheries and tourism directly and indirectly generate just administered in Male’ and Baa Atoll to collect information about of the project. This briefing paper summarises the findings of under three quarters of national employment, half of public how people perceive these values. They found that more than a study, recently carried out by the AEC project, which looked revenues, nearly two thirds of foreign exchange earnings, three quarters of tourists and residents of Male’ and over 90% at the economic value of marine and coastal biodiversity in almost all of exports, and close to ninety percent of GDP. The of the inhabitants of Baa Atoll considered marine and coastal the Maldives. Other briefing papers have also been produced results underline the fact that the vast majority of production, biodiversity to hold a personal value to them, reflected in their dealing with the topics of the value of biodiversity to the national consumption, income, employment and trade in the Maldives willingness to contribute funds towards conservation. Survey economy, financing biodiversity conservation, and economic relies directly on biodiversity. Together these two biodiversity- findings indicate that these economic values total come to Rf incentives for biodiversity. based sectors form the mainstays of the national economy, 6 million a year for Maldivian residents, and just under Rf 230 and are the main engines for growth and development. million a year for overseas tourists. Baa Atoll’s biodiversity The indirect value of ecosystem protection to human How people value biodiversity – direct, indirect and The Maldives contains by far the largest group of coral reefs settlement and production existence values in the Indian Ocean, as well as extensive shallow and deep More than three quarters of overseas tourists visiting Baa Atoll lagoons, sandy beaches, and mangrove and seagrass areas. As well as the physical products and raw materials that underpin income and employment, marine and coastal ecosystems express the value they place on marine and coastal biodiversity Baa Atoll (and its 75 component islands) has a particularly through a willingness to pay more than US$30 per visit to support generate a number of life support services that are extremely distinctive biodiversity. It features certain species that have conservation. important to the functioning of the Maldives economy, and the not yet been recorded elsewhere in the country, as well as Around 75% of the residents of