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Background Information about Tuvalu

Author: IFAD



Economic Background
Tuvalu was one of the high performing PICs which achieved an average GDP growth rate of 5.6% per annum during the period 1996-2002. However, since 2003, growth rate slowed as Tuvalu was exposed to rapid rises of world fuel and food prices. Its average growth in the last ten years has been 1.8% and the World Bank (2012) estimates this at 1.1% for 2011. Average per capita GNI in 2011 was estimated at USD 5,010, World Bank (2012). According to the UNPFA (2012), its population in 2011 was 11,200. Estimates for 2008-09 suggest that population growth was -0.9% and due to accelerating rate of net out-emigration. Almost 50% of Tuvalu’s population lives in the capital city but traditional agriculture and fisheries continue to dominate Tuvalu’s economic activity. Agriculture accounts for 23% of GDP, while 9% is the industrial share. The largest share (67%) of GDP was services related activities in 2011, ADB (2012). Coconuts, fisheries, tourism and copra are the major economic outputs. Employment opportunities are scarce with the Government being the largest employer. About 15% of the adult male population work as seamen on merchant ships abroad, and remittances area vital source of income. Fisheries, television, internet infrastructure and stamp sales make the most of the Government revenue. Although there are no data on global HDI, Abbott (2007) suggests that Tuvalu’s Pacific HDI is 0.653 and ranks 10 in the region. 

Baseline Poverty Analysis
The MDG report (2012) provides some statistics on poverty and shows that the proportion of population below the BNPL has increased since 1996 from 23% to 26% in 2007. The poverty gap ratio actually declined from 8 in 1995 to 6 in 2010. The poorest quintile’s share of consumption initially increased to 10% in 2008 but in 2010 has since fallen to about 8%. Labour productivity has fallen consistently with negative growth outcomes. Although employment levels increased since 1990, more people are involved in vulnerable employment which is intermittent and low paying. There is a very low prevalence of underweight children in Tuvalu. The literacy rates remain relatively high. Tuvalu has significantly reduced both the under-five and infant mortality rates since 1990.

Tuvalu has achieved gender parity in education at all levels. However, this has not translated into equality in employment and participation of women in non-agricultural sector. While women account for nearly 50% of the civil service, they hold only 20% of the high-level positions. Youth issue remains, but with a rise in GDP and investment, growth in employment opportunities can potentially accommodate raising youth population, which is currently about 19% of the total.

Agriculture and Rural Development
Agriculture is limited to subsistence farming and fishing as Tuvalu has no known mineral resources. The most pressing issues are the growing disparity of incomes and the vulnerability to climatic change - both relate to agriculture. Land resources are a few and soil quality is poor. The highest point is only a few meters above the sea level and this limits any viable water source. Tuvalu is vulnerable to cyclones, tsunamis and sea level rise. Consumer inflation resulting from food and fuel prices (in 2008) induced significant pressure on the constrained household incomes. In Tuvalu a significant majority of population rely heavily on processed imported food which has lower nutritional value. Imports were USD 16 million in 2010, while exports were USD 0.3 million, World Bank (2012). Healthy diets and increased production of local nutritious food remain a priority for the Government. At the village level, agriculture remains their livelihoods in cultivation of trees, crops and raising a limited number livestock (pigs and chickens). Coconut is still the most important exportable product but is also important as food and raw material for handicraft, toddy and animal feed. Domestic fishing remains quite small compared to the activities of foreign fleets. 

Language:  English (United Kingdom)
Development Themes: Agriculture Food Security & Nutrition
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