Republic of Maldives - The Governance of State-Owned Enterprises

SOEs in the Maldives play a critical role in the development of the economy as they are located in strategic sectors and provide essential goods and services. SOEs are one of the main drivers of the economy as they play a pivotal role in key sectors such as tourism, fisheries, telecommunication, and financial services, contributing to revenue generation and employment. Like other small island states, Maldives faces specific challenges related to its geography. Its high dependency on imports, limited access to certain specialized skills, a small domestic market and scattered population make the provision of goods and services costly and limit the attractiveness of markets to the private sector. As a result, historically SOEs have played a significant role in providing essential goods and services to citizens.The Government of Maldives requested World Bank support to assess and advise on the SOE corporate governance reforms initiated in 2013. The Ministry of Finance and Treasury (MoFT) and the SOE ownership entity, the Privatization and Corporatization Board (PCB), requested Bank support in assessing and advising on the Government’s recent SOE corporate governance reforms. Given the reform focus on ownership arrangements and performance management, Bank support is expected to focus primarily on ownership arrangements, performance monitoring, and fiscal risk.

The objective of this study is to generate knowledge and inform the Government of Maldives, and World Bank staff, about the Corporate Governance of SOEs and related reform actions. To achieve this objective, the study incorporates the following activities; an SOE Corporate Governance Country Diagnostic, a pilot analysis on fiscal risk management, and a medium-term Action Plan. The study thus seeks to respond to the Government’s expectations of international knowledge exchanges and a gradual solution-oriented approach to identified challenges.