Economics

What Are The Biggest Industries In Kiribati?

Fishing is one of the most important industries in Kiribati.

Kiribati is an independent state in Micronesia that encompasses an area of 811 km2 and has an estimated population of 110,136. The state consists of 32 atolls and reef islands, although more than half of the population lives on Tarawa Atoll. First inhabited by Micronesian populations, Kiribati was later colonized by Britain, and eventually gained independence in 1979. Tarawa is the capital and most populated part of Kiribati. In 2011, the island nation had a gross domestic product (GDP) based on purchasing power parity (PPP) of $599 million, a GDP per capita of $5,700, and a GDP growth rate of 1.8%.

Agriculture

Agriculture is one of the most important industries in Kiribati, which together with fishing and forestry, accounted for approximately 26% of the island nation's GDP in 2010. Some of the crops cultivated in Kiribati include copra, sweet potatoes, breadfruit, taro, bananas, papaya, and screw pine. The government owns the country largest agriculture company, and produces copra, which is by far the leading agricultural export and accounts for roughly two-thirds of all export revenue. In fact, in 2010 the country produced about 3,500 tons of copra, which was valued at $11.5 millionm and is mainly exported to Bangladesh for further processing. A large proportion of Kiribati's workforce is engaged in subsistence farming, and agricultural growth is limited by soil poor conditions, as the soil is considered some of the world's most infertile, shallow, and mainly alkaline. Despite these challenges, the country has managed to develop a sustainable system of farming based on traditional methods known as “te bwabwai pits,” which involves a technique of pits that are dug and filled with compost. The most common livestock in Kiribati include cattle, chickens, and pigs, which are primarily raised under a subsistence system given the small size of the atolls and islands. In 2009, arable land in Kiribati accounted for approximately 42% of the country’s total land area.

Mining

Although Kiribati currently has no mineral deposits on its atolls or reef islands, the government recently began surveying the waters within its larger exclusive economic zone (EEZ) for minerals. According to the government, traces of manganese and cobalt have been found on the ocean floors surrounding Kiribati, and studies are now determining the viability of exploiting the resource. If viable, the mineral resources are expected to contribute significantly to the growth of the country's economy, which is currently under pressure due to limited resources. Historically, phosphate mining was a significant part of Kiribati's economy, and was mined until the resource was depleted in 1979. The country also produces salt on a small-scale which, primarily on Christmas Island, which uses a rudimentary process of excavating salt deposits from shallow ponds and leaving them to dry in the sun. Salt from Kiribati is exported to overseas, with Japan serving as the principal export market.

Fishing

Fishing is one of the main economic activities in Kiribati, accounting for about 9% of the country's GDP in 2008. In fact, Kiribati is one of the most important sources of tuna fishing grounds in the Pacific, and the exclusive economic zone (EEZ) for all 33 atolls and islands is one of the largest in the world. Kiribati receives about 40% of its GDP from the sale of fishing licenses, which are linked to the size of the catch and vary considerably from year to year. The country also has an aquarium fish industry, which is still relatively new, but is thriving and contributes 80% of domestic fish exports. Some of the fish species in Kiribati include damselfish, butterflyfish, surgeonfish, and angelfish, and its leading export market is the United States. Other important species include the sea cucumber, oyster, ark shell, giant clam, shrimp, and lobster. However, these resources do not exist in large enough quantities for commercial exploitation, but instead are caught by subsistence and small-scale fishing, often in traditional canoes. Almost all communities in Kiribati practice fishing as an economic activity, and all fishing occurs in the ocean rather than freshwater.

Tourism

Tourism in Kiribati is an important economic activity and contributes significantly to the country's GDP. The tourism industry creates more than 5,000 jobs, which is equivalent to 17% of Kiribati's total labor force. In fact, the country ranks 31st in the world in terms of the highest proportion of its workforce employed in tourism. According to the World Travel and Tourism Council, Kiribati's tourism industry contributed about 19.5% of its GDP, compared to the global average of 14%. Kiribati markets itself as a remote destination, and as an alternative to the common commercial and globalized tourism industry. Additionally, the country's numerous lagoons, white sandy beaches, and beautiful scenery help attract tourists from around the world. Kiribati's islands are popular for recreational fishing, bird watching and surfing. For example, Phoenix Island is the world's largest protected marine area.

Manufacturing

In 2009, manufacturing accounted for about 6.2% of Kiribati's GDP, which was an increase of 0.3% over the previous year. However, the country has few natural resources, and therefore its manufacturing industry is relatively small, but does consist of fish processing, traditional crafts, and small goods for local consumption. Kiribati exported items valued at $7.1 million in 2010, primarily consisting of copra (62%), as well as seaweed, coconut, and fish. State-owned manufacturing companies play an important role in the regional market, but are small scale within the world market. The major constraints on the growth of Kiribati's manufacturing are the lack of a skilled workforce, isolation from international markets, and weak infrastructure.

Challenges Facing Kiribati

Kiribati faces a wide array of challenges, including climate change. Climate change has adversely affected Kiribati's environment, as well as its  political, economic, and social development. For example, climate change has impacted access to adequate food and water. Additionally, expected rises in the water level are projected to negatively impact the nation's arable land, which may either become submerged or face increased soil salination. The country is particularly vulnerable to climatic change because of its small size, limited resources, low-lying topography, and weak and underdeveloped economy. 

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