Tuvalu is an island country located in the Pacific Ocean, situated roughly halfway between Hawaii and Australia. The country is made up of nine islands, eight of which are inhabited, and encompasses an area of approximately 26 km2. Tuvalu is among the least populated countries in the world, with an estimated population of only 11,192 in 2017. The country's economic growth has been challenged by its remote location and lack of economies of scale. Tuvalu is isolated from the rest of the world, making it almost completely dependent on imports, especially fuel and food. Its primary sources of revenue are direct grants from international donors, the sale of fishing licenses, and income from the Tuvalu Trust Fund, which was established in 1987 by Australia, Japan, New Zealand, Australia, and the United Kingdom to provide the country with financial support and protect it from budget deficits. As at September 2012, the fund was valued at AUD 127 million. The economy of Tuvalu, which has a gross domestic product (GDP) of USD 39.73 million, is primarily driven by the fishing industry.
The fishing industry is among the biggest industries in Tuvalu. In fact, 42% of Tuvalu's population is engaged in fishing activities, either directly or indirectly. In 2007, the value of Tuvalu’s fisheries was approximately USD 44 million. The types of fishing practiced in Tuvalu include local and international offshore fishing, commercial fishing, subsistence fishing, and aquaculture. Some of Tuvalu’s fish production is exported. The country has rights to the marine resources that cover an area of 900,000 km2, which is referred to as its exclusive economic zone (EEZ). The sale of fishing licenses has resulted in more foreign fishing vessels engaged in fishing activities than domestic vessels. In fact, in 2013, sales of fishing licenses contributed to 45% of Tuvalu’s GDP. Tuna is the primary fish caught in the waters of Tuvalu, particularly skipjack, yellowfin, and bigeye tuna. In addition to fishing, some Tuvaluans are employed by container ships, especially those from Germany. These seafaring jobs are also a major source of income for many families in Tuvalu.
Agriculture is a major industry in Tuvalu, although it is not very well developed, particularly due to a lack of natural freshwater sources and infertile soil. Most farmers are engaged in subsistence farming, which has resulted in a low unemployment rate of 4% within the country. Agriculture contributes 20% of Tuvalu’s GDP. The only agricultural export from Tuvalu is copra, which is dried coconut meat that is used to extract coconut oil. Other crops cultivated in Tuvalu are bananas and breadfruit.
The services sector in Tuvalu consists of both public and private enterprises. Government services in Tuvalu include banking, medical services, and media services. The National Bank of Tuvalu is an arm of the government and the only provider of banking services within the country, offering personal and commercial banking products, including loans. The government provides medical services to Tuvaluans through Princess Margaret Hospital, which is located in Funafuti. The Tuvalu Media Department operates one radio station, while the private sector provides other telecommunication services with the support of the Tuvalu National Chamber of Commerce, Tuvalu National Private Sector Organization, as well as the Tuvalu Business Center.
About the Author
Sharon is a Kenyan native with a wide range of interests. An accountant and financial analyst by profession, Sharon enjoys writing about world facts, the environment, society, politics, and more.
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