A sultanate since the 12th century, the Maldives became a British protectorate in 1887. It became a republic in 1968, three years after independence. President Maumoon Abdul GAYOOM dominated the islands' political scene for 30 years, elected to six successive terms by single-party referendums. Following political demonstrations in the capital Male in August 2003, GAYOOM and his government pledged to embark upon a process of liberalization and democratic reforms, including a more representative political system and expanded political freedoms. Political parties were legalized in 2005.In June 2008, a constituent assembly - termed the "Special Majlis" - finalized a new constitution ratified by GAYOOM in August 2008. The first-ever presidential elections under a multi-candidate, multi-party system were held in October 2008. GAYOOM was defeated in a runoff poll by Mohamed NASHEED, a political activist who had been jailed several years earlier by the GAYOOM regime. NASHEED faced a number of challenges including strengthening democracy and combating poverty and drug abuse. In early February 2012, after several weeks of street protests in response to his ordering the arrest of a top judge, NASHEED resigned the presidency and handed over power to Vice President Mohammed WAHEED Hassan Maniku. In mid-2012, a Commission of National Inquiry was established by the government to probe events leading up to NASHEED's resignation. Though the commission found no evidence of a coup, the report recommended strengthening the country's democratic institutions to avert similar events in the future, and to investigate alleged police misconduct during the crisis. NASHEED, WAHEED, and Abdulla YAMEEN ran in the 2013 elections with YAMEEN ultimately winning the presidency after three rounds of voting. Maldivian officials have played a prominent role in international climate change discussions (due to the islands' vulnerability to rising sea-level).
Maldives has quickly become a middle-income country, driven by the rapid growth of its tourism and fisheries sectors, but the country still contends with a large and growing fiscal deficit. Economic growth slowed to 2.8% in 2015, mainly because of a decline in tourists from China and Russia. Despite lower growth, tourism-related tax receipts increased by 13% in 2015 because of higher tax rates. This increase in tax receipts led to higher usable foreign exchange reserves that helped partially fund increases in construction related imports.In 2015, Maldives’ Parliament passed a constitutional amendment legalizing foreign ownership of land; foreign land-buyers must reclaim at least 70% of the desired land from the ocean and invest at least $1 billion in a construction project approved by Parliament.Diversifying the economy beyond tourism and fishing, reforming public finance, increasing employment opportunities, and combating corruption, cronyism, and a growing drug problem are near-term challenges facing the government. Over the longer term, Maldivian authorities worry about the impact of erosion and possible global warming on their low-lying country; 80% of the area is 1 meter or less above sea level.