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10.10b.5 Tuvalu country brief

Information about Tuvalu from an Australian government website

Australia. Department of Foreign Affairs and Trade

Australian Government, Department of Foreign Affairs and Trade, "Tuvalu Country Brief" and "Development Assistance in Tuvalu."

This excerpt from one of the Australian government's website pages gives secondary information about Tuvalu's economy. One thing that you need to know before you analyze this source is that some Tuvaluan leaders have publicly demanded that Australia and New Zealand should accept all the Tuvaluan people as environmental refugees. Australia's leaders and people do not want to do that. However, government officials do not want to state that publicly. Instead they emphasize how much aid Australia gives to Tuvalu to make it resilient. Australia is the richest nation that is close to Tuvalu. The wealth of a nation is measured by its gross national income per capita. Another measure is the size of the private sector, which means all the businesses and companies that are not owned by the government. What sources of wealth are there in Tuvalu? On what businesses and incomes can the government of Tuvalu charge taxes? Why can't the government of Tuvalu provide more payments and services for its people displaced by sea level rise?


subsistence agriculture: growing just enough food for the family to feed itself

remittances: payments to family back home from people who work in other nations

seafarers: sailors

the formal economy: the money economy, excluding agriculture, fishing, and trade that is for subsistence

government revenue: the money that the government receives from taxes and fees

bilateral aid: money given from one government (Australia) to another (Tuvalu)

resilience: ability to survive and rebuild after a disaster

constrained: limited

dispersed: spread-out

generate: raise; in this case, it means to get more money

gross national income per capita: the amount of income of the average Tuvaluan. It is calculated by adding up all the income received by all Tuvaluans and dividing the total by the number of people in Tuvalu.

USD: United States dollars; Australia also has a dollar

private sector / public sector: This is a common division of the economy into everything that is privately owned and everything owned by the government. Employment in the private sector includes working in a business, store or farm; employment in the public sector means working for the government as an official, police officer, teacher, etc.

exacerbate: make worse

Tuvalu faces serious challenges. There are few natural resources and almost no sources of outside income. Many people work abroad, especially on ships or in phosphate mining in Nauru and Kiribati. Students should grasp that the government of Tuvalu cannot do more for its people because it has almost no way to generate income. Donations, particularly from Australia and New Zealand, have been supporting the Tuvaluan government since the late 1970s. You may wish to help students analyze the diplomatic language Australian officials use. The unspoken message is that Australia will help fortify Tuvalu so that the Tuvaluans can stay on their islands rather than immigrate to Australia.

Tuvalu, formerly known as the Ellice Islands, is located midway between Hawaii and Australia in the South Pacific Ocean. ... Tuvalu became independent from the United Kingdom in October 1978. ...

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

Development Assistance in Tuvalu

Australia has a longstanding relationship with Tuvalu based on shared development and security goals. Australia is one of the largest bilateral aid donors to Tuvalu and is committed to strengthening Tuvalu's economic and environmental resilience through our aid program. ...

Tuvalu's prospects for economic growth are constrained by its distance from markets, small and dispersed population and vulnerability to both economic and environmental shocks. Gross national income per capita is USD5,840 per annum and Tuvalu has limited options to generate revenue. ...
The private sector is small and offers limited employment opportunities. Tuvaluans rely primarily on the public sector as their principal source of employment. Tuvalu also faces development challenges arising from limited education opportunities, and modest natural resources. Climate change impacts will exacerbate these development challenges.