Tuvalu

New Zealand Aid Programme allocated funding

New Zealand Aid Programme transparency

Snapshot

  • Tuvalu is a constitutional monarchy, made up of nine low-lying coral atolls and islets with a total land area of 26 square kilometres.
  • The population is approximately 11,000
  • Most people are subsistence farmers or fishers.
  • A large proportion of the formal workforce is employed by the Government of Tuvalu.
  • Tuvalu generates income from the Tuvalu Trust Fund, commercialisation of the ‘.tv’ web domain address, and fishing licences and remittances, including remittances from Tuvaluan sailors employed on overseas ships.
  • There is a strong sense of community on Tuvalu, along with a tradition of reciprocity and a culture of sharing. This provides everyone with good access to subsistence resources.

Development challenges

  • Tuvalu is vulnerable to cyclones and the effects of rising sea levels as the highest point in the island group is only 4.5 metres.
  • The atolls have poor soil quality which only supports coconuts, breadfruit, pandanus (a fruit) and pulaka (similar to taro).
  • Tuvalu’s small economy is especially vulnerable to adverse international financial and economic conditions.
  • Tuvalu has very limited exports and the country’s isolation makes the distance to markets, and importing goods, financially challenging.

New Zealand Aid Programme activities

New Zealand’s development support for Tuvalu for 2011/12 is NZ$3.5 million.

The New Zealand Aid Programme activities in Tuvalu are based on the overall aid programme mandate and the specific development challenges in Tuvalu. In 2005 Tuvalu finalised its own national strategy for sustainable development, Te Kakeega II, 2005-2015. The New Zealand Aid Programme supports the priorities set out in Te Kakeega II and focuses on three core areas: financial management, outer island development, and workforce skills development.

Financial management support

The Tuvalu Trust Fund (TTF) was set up in 1987 with contributions from New Zealand, Australia, United Kingdom, Japan, South Korea and Tuvalu itself. Tuvalu is now the largest contributor to the fund, which has a market value of approximately AUD$100 million.

These contributions are invested overseas and the returns are used to meet the Tuvalu Government’s expenditure. The New Zealand Aid Programme funds an expert economic and investment advisor to represent New Zealand on the TTF Board of Directors and the TTF Advisory Committee (Tuvalu and Australia are also represented on the Board and the Advisory Committee). The board and the committee provide advice and support on wider economic and social issues facing Tuvalu.

The New Zealand Aid Programme makes periodic capital contributions to the TTF. In 2008, recognising the impact of the global financial crisis on Tuvalu, the New Zealand Aid Programme provided NZ$4.4 million in direct budget support to the Tuvalu Government for the period 2009-2012.

Outer island development

Ship to Shore Project

Most foodstuffs, building materials and manufactured products are transported to the islands by ship. Transport is limited to small inter-islands ships. Tuvalu has two passenger/cargo ferries, and a limited number of other vessels can be used for other purposes, such as emergency evacuations.

To improve access to the eight outer islands, the New Zealand Aid Programme is funding the Ship to Shore Transport Project. The project is being led by the Government of Tuvalu. New Zealand will contribute approximately NZ$7 million to the project, which aims to imporve the quality, cost effectiveness and safety of passengers and cargo transport services to the outer islands. The project includes reef channel development and improvements to landing areas, cargo handling, and passenger transfer.

Community assistance

Another key focus of outer island development is helping the local communities manage the development of their islands more effectively. The Falekaupule Trust Fund (FTF) was established in 1999 to generate funding for community development projects. New Zealand is working with the Government of Tuvalu to assist the Falekaupules (island councils) to manage the FTF and build community knowledge of how to access and use proceeds from the FTF.

Since 2009 the New Zealand Aid Programme and UNDP have jointly funded the three-year Local Government Support for Outer Island Development project to help strengthen Tuvalu’s local government capability. Tuvalu’s Home Affairs and Rural Development Ministry are implementing the project with assistance from UNDP. The New Zealand Aid Programme provides the majority of the project funding.

Workforce skills development

The development and maintenance of a skilled work force is critical to economic development. New Zealand’s development effort in Tuvalu has a strong focus on education and training opportunities.

The New Zealand Aid Programme provides scholarships for tertiary study in New Zealand and the Pacific region as well as short-term training attachments and technical and vocational training courses for Tuvaluans in New Zealand.