• 98.6%

    Youth literacy (2007)

  • 6.5%

    of the population is unemployed (2002)

  • 69.6

    years is the life expectancy (2010)

  • 10.3

    infant mortality per 1,000 live births (2010)

  • 0.5%

    is the population growth rate

About Tuvalu

Overview

Tuvalu
Photo: Nacanieli Speigth/UNDP.

The atoll physical land formation of Tuvalu imposes special ecological constraints to crop production. The limited land in Tuvalu is generally of a low quality with poor fertility. With sea levels rising due to climate change and global warming, Tuvalu’s main constraint is the high concentration of salt in the soil. The range of plant species which can survive in such habitat is limited to pandanus, breadfruit and bananas. Root crops such as pulaka and taro are common in the Outer islands. Cash is becoming an increasingly important adjunct to the islands economy. With the growth in cash incomes from overseas remittances and relatives from Funafuti, there is a growing tendency for imports to replace local products.

The country’s exclusive economic zone (EEZ) covers an area of approximately 900,000 square kilometers and is rich in oceanic fish stocks. The Government offers fishing licenses for foreign fishing companies to operate their fishing vessels within the EEZ. Tuvalu has received a substantial amount of money from these fishing licenses. In 2008, Tuvalu Fisheries resources within this area also offered potential for upgrading the country’s small scale fishing to meet the local demand for fish. Overfishing is an issue in both the open ocean and in coastal areas.

Government


Tuvalu became constitutionally independent on 1 October, 1978. Her Majesty Queen Elizabeth II is the Head of State and is represented in the country by a Tuvaluan Governor General and whose powers are, however, limited. Tuvalu has a political structure which provides for an elected Government, complemented by a strong local council system under the control of the Falekaupule (Outer Islands executive arm). Each island has an Island council (Kaupule), an island court with specific powers and limited jurisdiction in criminal and civil matters. Kaupule usually consist of six elected members of whom one becomes a president and another vice president.  The Kaupule Secretary looks after the overall management of the Kaupule. Each Kaupule is responsible for the financial management and maintenance of local services such as health and education.

Parliament has a single chamber of 15 members, with two members from each island except Nukulaelae. Parliamentary terms are for four years and Members may take as many terms as for which they as elected. Cabinet is responsible for policy and administration and is made up of the Prime Minister and seven ministers. Caucus is made up of 10 members including the Prime Minster, Speaker to Parliament, Cabinet Ministers and a MP. The highest court in Tuvalu is the High Court. Rulings from the High Court can be appealed in the Court of Appeal.

For the first time between 2000 and 2003, Tuvalu experienced a period of political instability with three Prime Ministers in two years. However in recent years (2006-2010), politics have been stable, despite a move from the opposition for a vote of no confidence.

Tuvalu’s main bilateral partners are Japan, Taiwan, Australia and New Zealand. Tuvalu is a member of several multilateral organizations such as the Asian Development Bank, World Health Organizations and the United Nations. Tuvalu became a full member of the International Monetary Fund and World Bank in 2010.

Economic Setting


Tuvalu has a very limited resource base which narrows down options available for development. In addition, Tuvalu is relatively remote from major markets, has a comparatively high cost of transportation for trade, a huge gap between exports and imports and therefore relies on foreign aid and overseas remittances to bridge the gap, and it is also vulnerable to external factors (mainly the exchange rate between the local currency of Australian Dollar against the US Dollar).

Tuvalu’s overall economy is measure in Gross Domestic Product (GDP). Because Tuvalu is heavily relying on foreign aid and overseas remittances rather than domestic production, Gross National Income (GNI) is sometimes referred to as a more practical indicator than GDP. GNI is derived from GDP and it includes primary income earned by residents in Tuvalu and from abroad.

Between 1996 and 2002, the Tuvalu economy grew at a real rate of 7.3% per annum or 6.1% in per capita (head) terms. However, recent figures release by the Central Statistics Division and the International Monetary Fund in July 2009 reveal that economy grew at a lower rate of 1.5% between 2001 and 2008.

Windfall revenue from fishing licenses resulted in a high level of annual growth in 1998 with 19.7%. This is also seen in neighboring country Kiribati, where they also had the highest annual growth of 20% in 1998 due to buoyant revenue from fishing licenses (Kiribati MDG National Report 2007). The same scenario also occurred between 2000 and 2002, when fishing licenses combined with dot TV revenue and the contribution from foreign reserves helped deliver an average annual growth rate of 4.3%. Because of these revenues, the Government finances large public projects such as the Funafuti tar sealed road. The public sector also continued to expand and as bank lending also increased thereby increasing activities in the private sector. From 2003 to 2005, the economy slowed down to an average growth rate of -2.7% mainly because of the completion of some of the major projects such as the Government Building and the Princess Margret Hospital. The economy then had a positive annual growth rate of 3.1% between 2006 and 2008 due to the strong US Dollar and undertaking major projects such as the new Funafuti Power House (2007) and the Funafuti Wharf (2008). The positive annual growth rate occurred despite food and fuel prices increasing. The annual inflation rate in the last quarter of 2008 was 10.4%. This is an increase of 6% from the average inflation rate of 3.4% between 1999 and 2007.

Working on foreign vessels as seamen provides employment for Tuvaluan men. In 2007 there were 335 seafarers actively engaged as seamen on overseas sea vessels. This is 11% of the estimated adult male working population (15-65 years of age). The average total cash remittances from seafarers as recorded from 2001 to 2003 was AUD4.2 million. It is estimated that in 2007, the total remittances from seafarers was AUD2.2 million dollars. This is 6.3% of GDP or 3.8% of GNI in 2007. Overseas remittances have a more direct impact at household level in improving social welfare than some of the aid programmes. Opportunities are at minimum level recently due to poor discipline, alcohol abuse and high transportation costs (airfares).

Source: Tuvalu MDGs Report 2010

Country flags
Statistics
Capital
Funafuti
Population
11,206 (2011)
Area (in sq. km)
26
Area (in sq. mi)
10.04
EEZ (sq. km)
760,000
Language
English and Tuvaluan
Basic Needs Poverty
26.3% (210)
GDP per capita
US$ 3187.2 (2010)

Sources: ADB Basic Statistics, 2013; Secretariat of the Pacific Community, 2013 UNDP/Human Development Report, UN Statistics.