Fishing dominates the economy. It is traditionally the main occupation and employs about one-quarter of the country’s total labour force. Almost two-thirds of the annual catch is exported and the rest is consumed locally. The fishing industry generates about 14 per cent of GDP (tourism at 17.7% is now the biggest single contributor to GDP), accounting for 75 per cent of export products.

The predominant methods of fishing are pole and line for skipjack, and trolling for tuna, mackerel and wahoo. Maldivian fishing vessels are called dhoni and closely resemble Arab dhows. In the 1970s, the government launched a program of modernizing and mechanizing the fishing fleet, and recently embarked on a new design for a second-generation Mark II dhoni which is sleeker, faster and holds more fish than the older-style dhoni.

In the past, the bulk of the catch was exported to Sri Lanka in the form of dried and smoked tuna. In 1971 however, when the Sri Lankans reduced the quantity of Maldivian fish they wished to import, the need to find alternative markets and new processing methods become urgent. The government acted promptly, signing agreements to sell frozen fish to several foreign companies. In 1977, a small fish-canning factory was established by Japanese investors, on Felivaru in Lhaviyani Atoll. Today the factory is wholly owned and operated by the Maldives Industrial Fisheries Corporation, and has the capacity to produce 50 tonnes of canned tuna per day for exportation to the Far East and Europe.

The national shipping line, which is operated by Maldives National Ship Management Limited, handles 95% of the country’s imports. Since the mid-1960’s the shipping industry’s profits have been an important source of foreign exchange. During the 1980’s however, a glut of shipping services sent freight prices crashing and to make matters worse, the war between Iran and Iraq affected trade between the Maldives and the Middle East.

Tourism has been the most dynamic sector of the economy over the last two decades. Since the first resort was built in 1972, the number of tourist arrivals has risen from 1000 to 200,000 per year. Tourism contributes nearly 26.6 % of the national revenue and is the country’s biggest earner of foreign exchange.

Agriculture is mostly a supplementary source of income. Coconut farming and the cultivation of cash crops, such as millet, areca nut, mangoes, bananas, onions and chillies are widespread. The main markets for agricultural produce are Male’ and the tourist resorts. Unfortunately, large quantities of fruits, vegetables and poultry products still need to be imported but the government has implemented measures such as coconut rehabilitation, pest control and the utilization of more uninhabited islands, to help stimulate and improve agriculture in the Maldives.

Traditional cottage industries such as boat building, mat weaving, rope making, ironmongery and handicrafts, have been strengthened by the growth in tourism. These industries account for nearly one quarter of the workforce, predominantly women. Modern industries which have recently evolved include fish canning, garment manufacture, the production of PVC pipes and soaps and washing powders, and the bottling of soft drinks.