UNDP is the UN’s global development network, an organization advocating for change and connecting countries to knowledge, experience, and resources to help people build a better
life. UNDP is on the ground in about 170 countries and territories, working with national counterparts on solutions to global and national development challenges. In the programme
countries, UNDP supports stabilization, state-building, governance and development priorities in in partnership with the host governments, the United Nations system, the
development partners and other partners to help the country to achieve sustainable development by eradicating poverty in all its forms and dimensions, accelerating structural
transformations for sustainable development and building resilience to crises and shock. UNDP has been a trusted development partner of the Maldives for more than 40 years,
helping to achieve the eradication of poverty, reduction of inequalities and exclusion in areas such governance, environment protection, climate change mitigation and adaptation. In each
of its thematic areas of work, UNDP at the request of its national partners provides relevant policy advisory support, technical assistance, advocacy, and knowledge to help Maldives
achieve its global commitment on Sustainable Development Goals (SDG). With Maldives’s transition to Middle Income Country Status, Official Development Assistance from
traditional donor sources has been on the continuous decline. UNDP is therefore working with its national partners to identify and tap into alternative and innovative financing
mechanisms for development. This process involves broadening outreach and forging wideranging partnerships with stakeholders - including other UN agencies, the government, the
private sector, philanthropic Foundations, multi-lateral and bi-lateral donors and International Finance Institutions to advance the country’s development strategies and
objectives.
Since 2008, the Republic of Maldives has embarked on an ambitious decentralization program aimed at strengthening local government and administration. The main objectives
of decentralizing the administrative divisions of the Maldives was to allow the island communities to make their own decisions in a democratic and accountable way, improving
living standards of the community through social, economic and cultural development and empowering the citizens to create an environment of peace and prosperity.
With renewed commitment from the current government to strengthen the decentralization system to empower the local communities, there has been significant work to reform the
national policies and the Decentralization Act to revitalize decentralization system of Maldives. In this regard the 8th and 9th amendment brought to Decentralization Act, includes
the legal framework to empower local councils financially and institutionally. Section 11 of Decentralization Act provides the opportunity for local councils to carryout business
initiatives at local level. This would be a great opportunity for councils to seek financial empowerment as majority of local councils are heavily dependent on the block grant given
by central government and many councils do not generate additional revenue. In order to provide opportunity to attain the fiscal empowerment, the recent amendments to Decentralization Act allows local councils to establish a company named as “Local Authority Company” (LAC). The purpose of this company is to work towards the development of the island, while conducting businesses and earning income to gain financial independence, so that council can implement developmental activities for the island community. LAC enables City councils, Atoll councils and Island councils to establish wholly or partly owned companies to carry out government approved business activities. While the regulation regarding the operation of Local Authority Companies by councils was published in April 2021, local councils are facing challenges in registering Local Authority companies. Therefore, an amendment was brought to the regulation in May 2022 to eliminate the limitations that councils have been facing to register the LACs and conduct small business initiatives at the community level to develop local economy.
To support this effort further, in partnership with the oversight body of councils the Local Government Authority (LGA), UNDP will introduce a handbook/manual that will support and guide councils to register and run the LACs. This handbook/manual will act as backbone materials that will give the guidance to create and run a LAC in a feasible and sustainable way so that it would lead to enhanced capacity of the councils, specifically to start and operate small business initiatives at the community level to develop local economies.
In this regard UNDP together with LGA is seeking the support of a local consultancy firm to develop a handbook/manual for councils on operation of LAC, formulating small business initiatives and on sustainable business management.
