Tuvalu country brief

Introduction

Tuvalu, formerly known as the Ellice Islands, is located midway between Hawaii and Australia in the South Pacific Ocean. It comprises nine islands (four reef islands and five coral atolls), eight of which are inhabited. Tuvalu's population is approximately 11 000, with about half living on the atoll of Funafuti, which is the capital.

Political overview

Tuvalu became independent from the United Kingdom in October 1978. It is a constitutional monarchy with a 15-member unicameral parliament elected every four years. Cabinet consists of the Prime Minister, elected by a majority of the members of parliament, and several ministers. The Prime Minister is the head of government. There are no organised political parties and members usually align with informal groupings. MPs have very close links with their island constituencies and effort is directed towards balancing island representation in Cabinet.

HM Queen Elizabeth II is the Head of State and is represented in Tuvalu by a Governor-General, currently the Hon Sir Iakoba Taeia Italei. Tuvalu's last national elections were held on 16 September 2010. On 29 September 2010, Maatia Toafa, who had served as Prime Minister from 2004 to 2006, was elected Prime Minister by a margin of eight votes to seven. However, on 21 December 2010, the Toafa government lost a vote of no-confidence. Willy Telavi was elected Prime Minister and his new cabinet of eight was sworn in on 24 December 2010. Tuvalu's next general election is due to be held in late 2014.

Economic overview

Most of Tuvalu's population is involved in subsistence fishing and agriculture. Remittances from seafarers working on overseas vessels are a significant (if declining) source of income for many families. The money economy is dominated by government activity. Fishing licences and marketing of Tuvalu's internet domain name '.tv' contribute to government revenue.

The Tuvalu Trust Fund

In 1987, the Tuvalu Government established a publicly owned investment fund to provide a safety net against fluctuations in government income. The earnings of the Tuvalu Trust Fund are used to help the government finance the gap between its annual budgeted revenue and expenditure.

The Governments of Australia, New Zealand and the UK have made major contributions to the Tuvalu Trust Fund, with smaller grants coming from Japan and the Republic of Korea. Australia is a member of the Trust Fund Board. Revenue from the Trust Fund has enabled the government to undertake development programs, including upgrading outer island schools and fisheries centres.

Bilateral relationship

Australia's Official Development Assistance (ODA) for Tuvalu in 2012-13 is $9.8 million. Of this, $7.7 million is bilateral development assistance. Australia's assistance to Tuvalu focuses on contributions to the Tuvalu Trust Fund, improving the Government of Tuvalu's financial management and planning for long term, and supporting adaptation measures to increase Tuvalu's resistance to the impacts of climate change. Further information can be found on the AusAID website.

During Tuvalu's drought emergency in 2011, Australia and New Zealand led international efforts to address critical water shortages by providing emergency water supplies and desalination plants. Through the Defence Cooperation Program, Australia provides technical and financial assistance to support maritime surveillance in Tuvalu's Exclusive Economic Zone. In 1994, Australia gifted a patrol boat, the HMTSS Te Mataili, to Tuvalu. As well as maritime surveillance, Te Mataili is also capable of conducting search and rescue operations. Full-time, in-country Royal Australian Navy maritime surveillance and technical advisers provide follow-on support for the vessel, and assistance with the development of indigenous maritime surveillance and response capabilities. The Defence Cooperation Program also supports Tuvalu's Police Maritime Wing's operational ability through the provision of fresh water tanks, marine boarding ladders and sea anchor.

Australia and Tuvalu signed a memorandum of understanding for Tuvalu's participation in the Seasonal Worker Program in February 2012. Under the Program, seasonal horticultural workers from Pacific countries are recruited by horticultural enterprises in Australia to meet their seasonal harvest needs.

The Governor-General, HE Ms Quentin Bryce AC CVO, visited Tuvalu in March 2012. She was accompanied by former Parliamentary Secretary for Pacific Island Affairs Richard Marles. Mr Marles has also visited Tuvalu on a number of other occasions, most recently in August 2012.

Bilateral economic and trade relationship

Australian merchandise exports to Tuvalu in 2011-12 totalled $1.5 million (these principally consist of alcoholic beverages, meat, and edible products). Australia imported goods worth $280 000 from Tuvalu in the same period (these principally consist of medicaments, pumps for liquids and parts, and manufactures of base metals). Australian currency is legal tender in Tuvalu, but Tuvalu also circulates its own coins.

Updated March 2013