As I mentioned in this post, Maldives will soon be facing the challenges of an aging population and declining birth rates, there is a need to rethink strategies for sustainable growth and development. A lot of other countries which are facing similar problems have tried to mitigate it through migration. Indeed, Maldives itself has a really high proportion of migrants; a ratio of around one migrant for four Maldivians. And while these migrants contribute significantly to infrastructure development and to the local economy overall, they’re not exactly bringing in a whole lot of money with them. (And in the end, money is the most important thing ever, right?)

In this post, we will explore how Maldives could potentially attract migrant from the other end of the economic spectrum, specifically looking at digital nomads. The presence of such individuals could significantly boost the Maldivian economy, enrich its cultural tapestry, and help offset demographic declines. We will look at how Maldives can attract and integrate these new residents into Maldivian society, emphasising the potential benefits and necessary precautions.

What are Digital Nomads?

“Digital” means “involving or relating to the use of computer technology”, and “nomad” means “a member of a people who have no fixed residence but move from place to place usually seasonally and within a well-defined territory”.

So basically, they are people who travel freely while working remotely using technology and the internet. While such people have existed for a long time, digital nomadism really took off during and after the covid pandemic.

Why are Digital Nomads?

Here are a few points from Nomadgirl, a blog written for/by digital nomads:

  • Many countries suffered a severe drop in tourism revenue from the ongoing Covid-19 pandemic. As a response to this drop in tourism countries began actively targeting digital nomads. The thought was that is better to have one tourist staying 12 months than 26 tourists staying 2 weeks, especially with all the travel regulations.
  • Working from home became the new normal during the pandemic and this made it easier to switch countries as well and work remotely. A new class of wealthier digital nomads or techpats (remote technology workers) was born.

Where are Digital Nomads?

Typically, people choose to work remotely in countries which have favourable conditions for such work. This includes factors such as low cost of living, high standard of living, high speed internet, ease of entry, and regulations around income tax.

You often find that countries with favourable conditions for digital nomads are a bit more “off the beaten track”, and not the standard tourist destinations. For example, in that same post from Nomadgirl, they list countries like Georgia, Estonia, Malta, and Latvia as having good conditions for digital nomads, amongst the more common tourist destinations like Spain and Greece. Closer to home, they mention Malaysia, Thailand and Sri Lanka.

Often, digital nomads go to countries that have lower living costs than their own countries, which is why developing, or newly industrialised countries are popular for digital nomads.

The Economic Benefits of Digital Nomads

Attracting remote working professionals from sectors like technology, finance, and creative industries can be transformative for the Maldives. These individuals often bring substantial disposable income, demand for high-quality goods and services, and a propensity to invest in local economies. By establishing a robust community of high-end migrants, the Maldives could see:

  1. Increased Economic Activity: Digital nomads and tech professionals typically have high spending power. Their demand for accommodation, dining, and leisure activities can stimulate local businesses, leading to job creation and economic diversification.
  2. Innovation and Skills Transfer: High-end migrants often bring with them cutting-edge skills and knowledge. This can foster a culture of innovation, support the growth of local tech ecosystems, and enhance the skills of the local workforce through collaboration and training.
  3. Global Networks: By attracting internationally connected individuals, the Maldives can integrate more seamlessly into global networks, opening up new opportunities for trade, investment, and cultural exchange.

Strategies to Attract High-End Migrants

To capitalise on these potential benefits, the Maldivian government could implement a range of strategies designed to attract and integrate high-end migrants:

Digital Nomad Visas and Tech Hubs

Introducing special visas for digital nomads and tech professionals can make the Maldives an attractive destination for these individuals. By offering long-term residency options, access to coworking spaces, and reliable high-speed internet, the Maldives can position itself as a premier location for remote work.

Long term residency is mostly a matter of paperwork/policymaking. Yes, there will be a bit to do in the way of housing, but that’s easy enough. It’s the high speed internet and other lifestyle amenities that Maldives would need to invest in to become more attractive to people who would consider moving there for work.

Citizenship by Investment

Citizenship by investment programs can be a powerful tool for attracting wealthy individuals and entrepreneurs. By offering Maldivian citizenship in exchange for substantial investments in local businesses, real estate, or infrastructure projects, the Maldives can attract individuals looking for a stable and beautiful place to live. This approach has been successfully implemented in other small island nations like St. Kitts and Nevis, which has the oldest of such programs. This was started in 1984, and since then, over 20,000 passports have been issued, with the requirement being that you either contribute at least $250,000 to their Federal Consolidated Fund, or invest at least $400,000 in real estate. This is an overall contribution of at least $3 billion since the program started, and that’s not including the flow on economic benefits of having all this money come into the country.

And while places like St. Kitts and Nevis, or European countries which have citizenship by investment programs typically have more incentives, particularly in terms of passport power, it’s all relative. I’m sure there are plenty of very wealthy individuals in places like Afghanistan and Pakistan who would see huge benefits in terms of their global mobility by becoming a Maldivian citizen. There are also definitely wealthy people people in the middle east who would see Maldivian citizenship as a path out of the semi-oppressive regimes of that region.

Language and Cultural Integration Programs

To ensure that high-end migrants integrate smoothly into Maldivian society, the government should offer language and cultural orientation programs. Learning Dhivehi, and understanding Maldivian customs and traditions can help new residents feel more connected and reduce cultural barriers. This also prevents high end migrants from becoming too insular as a community, which is what has happened in a lot of other countries. This can breed resentment from the local population and is overall just bad for everyone.

The Case for Caution

While the benefits of high-end migration are clear, it’s essential to implement these policies thoughtfully. Unchecked migration could lead to socio-economic disparities and cultural friction.

The government should set clear guidelines and quotas; establishing limits on the number of high-end migrants. This can help manage integration smoothly and ensure that local infrastructure and services can cope with the increased demand.

In addition, the government should regularly assess the impact of migration policies on the economy and society. This will help identify any emerging issues and allow for timely adjustments.

Avoiding the Pitfalls of Gentrification

I mentioned before that a lot of digital nomads move to places where their money would go further compared to their home countries (i.e. developing countries). This means they automatically join the wealthy upper classes of the societies they move to, even though they may be middle or even lower class in their own countries. If they start demanding services which are out of the reach of locals who have less money, this can cause problems.

In popular destinations like Bali, the influx of wealthy expatriates and digital nomads has driven up property prices and living costs, making it difficult for local residents to afford housing and maintain their livelihoods. To prevent similar issues in the Maldives, the government should consider the following strategies:

Affordable Housing Initiatives

Developing affordable housing projects specifically for local residents can help mitigate the impact of rising property prices. The government could provide incentives for developers to include affordable units in new housing developments or create regulations that ensure a portion of all new housing is set aside for locals.

It could be part of the Digital Nomad Visa policy that new migrants can only live in a certain type of housing, or will have some kind of tax that helps to offset any housing price inflation. Maldives can use its geography to its advantage here by requiring digital nomads to spread throughout the country, thus bringing more money to the outer islands without inflating the cost of living for locals.

Zoning Regulations

Establishing zoning regulations that limit the conversion of residential properties into commercial or tourist accommodations can help preserve affordable housing for local residents. These regulations can also designate specific areas for high-end residential developments, ensuring that they do not encroach on neighbourhoods traditionally inhabited by locals.

It is commonly known that short term accommodation (think AirBnb) has ruined the housing markets in many cities. Maldivian homeowners would be more than happy to use their homes to accommodate wealthy digital nomads at the expense of poorer locals. Policies should be put in place to prevent this from happening.

Community Development Funds

Creating community development funds financed by a portion of the revenues from high-end migration initiatives can support local projects, such as schools, healthcare facilities, and community centres. This approach ensures that the benefits of migration are distributed more equitably across society, and that the money doesn’t just end up lining the pockets of already-wealthy politicians.

Addressing Demographic Decline

The Maldives faces a looming demographic challenge, with an aging population and low birth rates threatening long-term economic stability. Attracting high-end migrants can help counterbalance these trends by infusing the population with younger, economically active individuals. These people will be bringing in a lot of money with them which will help in terms of having a tax base to fund the services required by an older population. Additionally, offering citizenship by investment to people from lesser-developed countries can provide them with greater travel benefits and opportunities, which they might not have in their home countries.

Conclusion

By embracing high-end migration, the Maldives can position itself as a vibrant, economically robust nation capable of navigating the challenges of demographic decline. Careful implementation of digital nomad visas, citizenship by investment programs, and integration initiatives will ensure that the influx of new residents is beneficial for both the migrants and the local population. With the right strategies, the Maldives can transform into a thriving hub for global talent and innovation, securing a prosperous future for its people.