The World Bank has approved an USD 12.8 million Covid-19 Emergency Income Support Project, to the Maldives.

The project is to help the country to mitigate the economic impact of the COVID-19 crisis on poor and vulnerable workers and their families, and aims to increase the capacity of the country’s social protection programs to respond to future emergencies.

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 coronavirus pandemic”.

It added that this “will give a lifeline to struggling families and enable them to stay at home, preventing further spread of the virus, especially within the congested capital city”.

World Bank Country Director for Maldives, Nepal, and Sri Lanka, Idah Z. Pswarayi-Riddihough noted that “the drastic fall in tourism revenues and the constraints necessitated by the COVID-19 containment efforts have dealt a severe blow to low-income households who have lost their jobs or their source of income”.

She added 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”.

Further, the new project will also strengthen the government’s capacity “to distribute allowances and other cash transfers” and enhance administrative systems 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, is also to 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.

The Covid-19 Emergency Income Support Project is to be implemented by the Ministry of Economic Development with support from the National Social Protection Authority (NSPA) 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.

The World Bank approved a USD 7.3 million emergency support fund for the government of Maldives in its efforts to combat the Covid-19 outbreak, back in April. Further, a contingency financing of USD 10 million has also been offered as support, this was under the Disaster Risk Management Development Policy Financing with a Catastrophe Deferred Drawdown Option (CAT DDO), signed during 2019.