The people of the Maldives have madesubstantial progress over the past two decades, as reflectedin rising incomes and improving social indicators. Thisreport provides an update on this progress, with anintegrative analysis of the Maldivian economy, includingrecent economic developments, macroeconomic policies, andprospects for growth and poverty reduction. In seeking tobecome an upper middle income country, the Government ofMaldives (GoM) will need to address several key developmentissues while managing the associated fiscal impacts, whichis a core theme of the report. These issues includemitigating vulnerability, fostering private sector ledgrowth, strengthening land management and housing finance,developing focus islands to lower the marginal cost ofservice provision, and improving fiscal systems.