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Map of Tuvalu

Map of Tuvalu.
flag of the Tuvalu.

Tuvalu


Key facts

Geography/Demographics

Official Name - Tuvalu
Land Area
- 26 sq km - nine islands - 5 atolls and 4 coral islands
Population
- 9,847 (2012 est.))
Capital
- Fongafale
Main Atoll
- Funafuti
Language
- English, Tuvaluan (a Polynesian dialect); I-Kiribati (Gilbertese)
Currency - Australian Dollar (with Tuvaluan coins circulating on par with Australian coins)
EEZ
- 900,000 sq km


Political

Political system - Constitutional monarchy with a parliamentary democracy.

National government
-A 15-member Parliament is elected every four years.

National legislature
-A unicameral parliament or Fale I Fono. Cabinet comprises the Prime Minister and not more than ten MPs, selected by the Prime Minister.

Last election - August 2010
Next general election due
- August 2014

Head of State - The British Monarch, Queen Elizabeth II, represented by Tuvalu’s Governor-General, Iakoba Italeli
Head of Government - Hon Willy Telavi, Prime Minister and Minister of Natural Resources

Key Ministers

Hon Kausea Natano
Deputy Prime Minister, Minister of Communication, Transport, and Public Utilities;

Hon Apisai Ielemia
Minister of Foreign Affairs, Environment, Trade, Labour and Tourism;

Hon Dr Falesa Pitoi
Minister of Education, Youth and Sports;

Hon Taom Tanukale
Minister of Health;

Hon Pelenike Tekinene Isaia
Minister of Home Affairs and Rural Development

Rt Hon Sir Kamuta Latasi
Speaker to the House of Parliament;

Key Opposition MPs - No organised political parties.
Main political parties
- There are no political parties but members usually align themselves in informal groupings.


Economic

GDP - US$36 million (2012)
GDP per capita
- US$3300  (2011)
Real GDP growth
- 1.1% (2011 est)

Exports
- $1 million c.i.f. (2010est)
Main Exports - Copra, fish

Imports
- $12.91 million c.i.f. (2010est)
Main Imports -
Food, animals, mineral fuels, machinery, manufactured goods

Inflation
- 2.6 % (2012 est)


New Zealand Trade

NZ Exports (FOB) - NZ$4.1 million (Jun 2012)
Main Exports
- Building/prefabricated, milk products, wood

NZ Imports
(CIF) - NZ$50,969 (Jun 2012)
Main Imports
- Scrap metal, melon peel


History

Tuvalu was part of the British colony of the Gilbert and Ellice Islands from 1892. Formerly the Ellice Islands, it was administered together with the Gilbert Islands (now Kiribati) until 1975. This union, linking the Micronesians of the Gilbert Islands with the Polynesians of the Ellice Islands, was largely a colonial convenience. Tuvalu, which means “eight islands together”, became an independent constitutional monarchy on 1 October 1978, with Queen Elizabeth II as Head of State. In 1986 Tuvalu approved a new, locally written, Constitution. Tuvalu is ranked as the fourth smallest country in the world in terms of geography.

The eight islands, from north to south, are: Nanumea, Nanumaga, Niutao, Nui, Vaitupu, Nukufetau, Funafuti (capital), and Nukulaelae. The ninth, tiny Niulakita, has been inhabited only since the 1950s, by people from Niutao Island. Since the late 1940s, a Tuvaluan community has been living on the island of Kioa, off the east coast of Fiji's Vanua Levu, to avoid overcrowding on Vaitupu.  Most Tuvaluans are members of the Christian Church of Tuvalu (Ekalesia Kelisiano o Tuvalu), autonomous since 1968 and derived from the Congregationalist foundation of the London Missionary Society. Life, especially on the outer islands, revolves around religion.


Political Situation

Following a successful “no confidence” motion, a new Tuvalu Government was sworn in on 24 December 2010, with Hon Willy Telavi as Prime Minister.

Telavi replaced Hon Maatia Toafa who had as recently as September 2010 been voted in as Tuvalu's Prime Minister in a secret ballot by the 15 members of parliament.  This was the second time that Toafa has been ousted by a vote of no confidence - he was Prime Minister from 2004 until 2006 when ousted.

Following the December 2010 elections the opposition lodged a number of legal actions against members of the Telavi Government which, if successful, would have required by-elections.  In the end the High Court ruled in favour of the sitting MPs or postponed a decision until later in 2011.  This meant that Parliament could then sit in April 2011, for the first time since the Telavi Government was sworn in. 

Tuvalu has an elected fifteen-member legislative chamber. The legislature elects a Prime Minister, who then chooses up to ten MPs to join a Cabinet. The Governor-General is appointed by the Queen, on the recommendation of the Prime Minister who will have consulted with parliament.

In recent years, Tuvalu’s political situation has remained fluid with several changes of leadership. Seven different governments took office between 1998 – 2006 and none lasted more than 2 years.  Following the August 2006 elections, Hon Apisai Ielemia was elected as Tuvalu’s tenth Prime Minister. The previous general election was in July 2002, when Hon Saufatu Sopoanga was appointed as Prime Minister. He was replaced as Prime Minister in 2004 by Maatia Toafa, after his party lost a no-confidence vote and Sopoanga resigned (he was re-elected in a by-election but took the role of deputy Prime Minister). Members of Parliament have close links to their island constituencies and are not organised into any formal political parties. 

A comprehensive review of the programme of public sector reforms was initiated under the previous Government’s medium to long-term Vision 2015 development strategy. The reform programme included the reduction of government expenditure and the public service, corporatisation, facilitation of private sector development including the establishment of a new legislative framework for direct foreign investment, decentralisation of government to the outer islands, improving public sector performance, and further outer island development.

The Falekaupule Act gives island councils - comprised of traditional leaders - responsibility for managing their own finances from a budget allocated by central government. The Falekaupule Trust Fund, with initial capital of A$12m (in two tranches over 1999 and 2000) was established in 1999 for this purpose. Funded by a loan from the Asian Development Bank, the Tuvalu Government agreed to match this loan from its own resources.

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Economic Situation

Tuvalu’s economy is one of the three most vulnerable, in the Pacific, to the global economic crisis (ADB ranking) – especially with its heavy reliance on imported food and fuel.  Economic growth projection for 2012 is 1.2% based on expansion in private retail and education services and the development of partner-funded upgrade of the Tuvalu airport in the last quarter of 2012.  Inflation was expected to decline to 2.6% in 2012.  Remittances from seafarers have been declining for some years.

The 2012 budget projects a deficit of A$2.2m based on expenditure of A$30.2m against an expected revenue of A$28m.  Further deficits are projected for 2013 and 2014.  The ADB anticipates that without expenditure cuts or other remedial action, the government’s cash and Consolidated Investment Fund balance of A$4.4m will likely be exhausted in 2013.  It is critical that the government adopt a prudent fiscal stance and improve the quality of its decision making to achieve macro economic and fiscal stability over the medium term. 

Tuvalu introduced a broad-based consumption tax in July 2009 to offset the reductions in import duties required under the Pacific Island Countries Trade Agreement (PICTA).

Tuvalu Trust Fund

The Tuvalu Trust Fund (TTF) plays an important part in the economy. The Fund was created out of donations from the governments of New Zealand, Australia, the United Kingdom and Tuvalu in October 1987, and is regarded as a success though it has recently been affected by the global economic crisis.

The initial capital of A$26.4 million was raised  through contributions from New Zealand, Australia, England, Tuvalu, Japan and Korea.  Subsequent contributions by Tuvalu and other donors have increased the principal to A$58.53 million.  Tuvalu is today the largest contributor. The capital is invested globally and distributions are paid back into the government’s consolidated account. Through these distributions, the TTF has contributed approximately (A$79 million) 15% of the annual government budget each year since 1990. This provides an important cushion for Tuvalu's highly variable income from fishing.

The Tuvalu Trust Fund’s value as at 30 September 2012 was just over A$127.3m (A$115.1 million end Sept 2011).  Excluding the additional contributions received during the year, the market value of the fund rose approximately10.5% during the 2011/2012 financial year.  

Trade with New Zealand

In the year to June 2012, New Zealand exported goods to Tuvalu valued at $4.1 million.  Machinery and mechanical appliances - at $296,000 was the single largest export item.  Others included medicaments ($169,000), Meat ($136,000), Milk ($124,000), Petrol ($51,000) and wood ($192,000).

In the year to June 2012, Tuvalu exported goods to New Zealand valued at $50,969.  This was comprised of scrap aluminium ($25,000), media, unrecorded ($3,247).
Tuvalu currently remains a United Nations’ designated Least Developed Country, in recognition of its small size, almost total lack of exploitable resources, very limited potential for economic development and vulnerability to external economic and environmental shocks.

Most Tuvaluans are involved in traditional subsistence agriculture and fisheries, which are highly susceptible to adverse weather conditions, notably climate change and rising sea levels.  Around two thirds of the formal workforce is employed by the Government, leaving little room for private sector activity. Development of the economy is heavily reliant on overseas aid, traditionally from Australia, the United Kingdom and New Zealand, and now, increasingly from Japan, the European Union and Taiwan.

Tuvalu has been able to capitalise on its fortune in having the right to the highly marketable internet domain name “.tv”. By selling rights to the suffix to California company Idealab for approximately NZ$55m over 12 years (includes a yearly payment of approximately A$2.2 million), and by retaining a 20 per cent share in the “dotTV” company, Tuvalu hopes to receive significant profits.

Fishing licence fees provide another important source of foreign exchange. While fish licence revenue varies significantly from year to year, the payouts over recent years have been significant (Tuvalu budgeted for a payout of A$6.3m million in 2012, and received A$9 million). Tuvalu has fishing licence agreements with Taiwan, Japan, New Zealand, and is also party to the multilateral fishing agreement with the United States. Tuvalu is also one of the PNA nations (Parties to the Nauru Agreement), a regional cooperation agreement. Tuvalu has also entered into a fishing joint venture with a Taiwanese ship building company (Chin Fu). This joint venture vessel (per seine) is now operational and providing financial returns to the Government of Tuvalu. Tuvalu has also sold shares in an international telecommunications venture which leases Tuvalu lines and markets them internationally.

Remittances from Tuvaluans employed overseas, particularly as seafarers, have played a significant part in the economy, contributing approximately 10% of GDP.

Environmental Conditions

There are no streams or rivers on Tuvalu, and groundwater is not potable; most water needs are met by catchment systems with storage facilities (the Japanese Government has built one desalination plant and plans to build one other). Other environmental concerns include erosion of sand dunes and coastline, excessive clearance of forest undergrowth for use as fuel, and damage to coral reefs from the spread of the Crown of Thorns starfish.

Tuvalu is concerned about global increases in greenhouse gas emissions and their effect on rising sea levels, which threaten the country’s underground water table. The highest point of elevated land in Tuvalu is between 4-5 metres, which provides the basis to their concerns regarding the effects of climate change and the threat of sea level rise. The fragility of the island group was underscored in 1997 when a damage assessment team estimated that approximately 6.7% of Tuvalu’s total land mass had been washed away by Cyclones Gavin and Hina.

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Foreign Relations and Multilateral Linkages

The main focus of Tuvalu’s foreign policy is the Pacific region, but Tuvalu has become increasingly active in regional and international forums. Tuvalu has a High Commission in Suva, and a mission in New York. Tuvalu signed a Treaty of Friendship with the United States in 1979 and has entered into diplomatic relations with a range of other countries including Japan and the Republic of Korea. Tuvalu has also maintained diplomatic relations with Taiwan. Tuvalu is a member of the United Nations (since 2000), the Commonwealth, the Pacific Islands Forum, the Forum Fisheries Agency, the South Pacific Regional Environment Programme (SPREP), the South Pacific Applied Geoscience Commission (SOPAC), Secretariat of the Pacific Community (SPC), South Pacific Board for Educational Assessment (SPBEA), South Pacific Tourism Council, and the University of the South Pacific.  Tuvalu is party to a number of international environmental agreements including those related to: the Kyoto Protocol, Desertification, Endangered Species, Marine Dumping, Ozone Layer Protection, Shipping Pollution, Biodiversity and the Law of the Sea.

 

New Zealand Official Development Assistance

A key factor in the bilateral relationship is the development assistance programme between New Zealand and Tuvalu. New Zealand’s 2011/12 bilateral allocation for development assistance in Tuvalu was NZ$4.0 million and remains unchanged for 2012/13. The Joint Commitment for Development for Tuvalu is being finalised for signing. The priority areas are – lifting economic performance, workforce skills development, and renewable energy. The key activities to lift economic performance are support for public financial management and through better inter-island shipping and fisheries management.  Scholarships and vocational training will help develop Tuvalu’s workforce skills to meet local and international labour market demands.  Assisting Tuvalu implement its energy master plan will reduce reliance on diesel for power generation.

Development context

Tuvalu has few natural resources, a small and dispersed population, a very small domestic economy and limited access to capital. Tuvalu’s isolation also makes the distance to market, and importing goods, financially challenging. The local economy is dominated by the public sector and development projects. Tuvalu has a 900,000 square km exclusive economic zone, providing access to significant tuna/fish stocks which is a major source of revenue. Aside from fishing licences, the majority of revenue is generated from the Tuvalu Trust Fund, tax revenue, remittances, and fees from the .tv internet domain name. Tuvalu remains dependent on aid to make the budget balance.

New Zealand's Aid flows

Aid Flows

NZ$ (million)

2012/13 Indicative

7.5

Bilateral programme

4

Scholarships and Training

1.21

Other aid flows

1.7

2011/12

8.7

Bilateral programme (actual)

6.8

Other estimated aid flows 

1.9

New Zealand’s Engagement

New Zealand’s key policy dialogue is on: financial management and macroeconomic stability, with a view to encouraging fiscal restraint and focused expenditure on national development priorities (education, health, income generation).

Joint Commitment for Development Priority Sectors:

New Zealand’s major activities are:

Results/Key Achievements

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Australia/New Zealand Cooperation

Australia and New Zealand work very closely in Tuvalu to ensure coordination and harmonisation.  This includes undertaking joint country missions, jointly supporting the Tuvalu Trust Fund, and co-funding an advisor in Treasury.    Discussions are in train for Australia to co-fund the Tuvalu Ship to Shore Transport Project.  Conveying shared messages to the Government on the need for fiscal discipline helps reinforce A/NZ’s concerns with Tuvalu’s fiscal position.     

Other Major Donors

Donor

Aid Flow

Programme Focus

Taiwan, 2011-2012

A$7m per annum (indicative figure that is finalised during annual discussions on budget support & infrastructure project implementation)

Budget support, scholarships, infrastructure investment

Australia, 2011- 2012

A$7.4m (bilateral and A$2.5m other aid flows)

Climate change, financial management, health and education

European Union,

2008-2013

€7.5m

Water, waste and sanitation, technical assistance, budget support (V-Flex), and renewable energy

World Bank, 2012-2015

US$14.4m

Aviation sector support (approx. US$12m), technical assistance in fisheries and drought recovery, and potential budget support

 

Air Services

Funafuti’s only airlink is to Suva via a twice weekly Air Pacific flight.

 

Visits

Visits to Tuvalu

Visits to New Zealand

- Hon Dr. Falesa Pitoi - Minister of Education, Youth and Sports
- Hon Isaia Taeia Italeli - Minister of Natural Resources
- Hon Taom Tanukale - Minister of Health

 

Representation

 

Travel advice

The Safe Travel website provides a travel advisory for travellers to Tuvalu [external link].

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Page last updated: Monday, 09 December 2013 13:00 NZDT