## Enhancing Resilience to Climate Change in the Maldives

_IMF Working Papers, April 23, 2021_

## Source details

**Canonical URL:** [Enhancing Resilience to Climate Change in the Maldives](https://www.imf.org/en/publications/wp/issues/2021/04/23/enhancing-resilience-to-climate-change-in-the-maldives-50293)

## Other formats

- [Markdown version](/en/publications/wp/issues/2021/04/23/enhancing-resilience-to-climate-change-in-the-maldives-50293/index.md)
- [Structured JSON version](/en/publications/wp/issues/2021/04/23/enhancing-resilience-to-climate-change-in-the-maldives-50293/index.json)
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## Bibliographic details
- Authors: Giovanni Melina, Marika Santoro
- Published: April 23, 2021
- Series: IMF Working Papers

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### Summary
- The increased likelihood of adverse climate-change-related shocks calls for building resilient infrastructure in the Maldives.
- Fulfilling infrastructure needs requires comprehensive analysis of investment plans with respect to:
  - degree of climate resilience,
  - impact on future economic prospects,
  - funding costs and sources.
- The paper analyzes these challenges by calibrating a general equilibrium model.
- Main quantitative finding: under worsened climate conditions, the cumulative output gain from investing in more resilient technologies increases up to a factor of two.
- Fiscal constraint note: the Maldives has limited fiscal space, particularly after COVID-19.
- Donor timing finding: it is financially convenient for donors to help build resilience prior to the occurrence of natural disasters rather than helping finance reconstruction ex-post.

### Key findings and projections
- Significant dividend associated with building resilient infrastructure.
- Under worsened climate conditions, the cumulative output gain from resilient investment increases up to a factor of two.
- Given limited fiscal space after COVID-19, domestic financing alone may be insufficient to meet resilience needs.
- International community cooperation should be stepped up to support resilience-building.
- Donor financing before disasters is more cost-effective than ex-post reconstruction financing.

### Methodology and scope
- Analytical approach: calibration of a general equilibrium model to the Maldives context.
- Focus areas: investment plans’ resilience, macroeconomic impacts, and funding costs and sources.

### Policy recommendations
- Prioritize investment in resilient infrastructure to capture substantial cumulative output gains (up to a factor of two under worsened climate conditions).
- Mobilize international cooperation and donor support, recognizing the Maldives’ limited fiscal space after COVID-19.
- Encourage donor financing for resilience-building ex-ante (prior to disasters) rather than ex-post reconstruction financing.

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## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2021/english/wpiea2021096-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021096-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2021/04/23/enhancing-resilience-to-climate-change-in-the-maldives-50293_