Countries and Regions

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Country Strategy and Program Update 2003-2005: Tuvalu

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I. Country Strategy

1. The National Development Strategy¹ (NDS) for 1995-1998, still serves as the Government's basic strategy document, pending the formulation of a new NDS. The last couple of year's changes of governments have caused frequent rotations of staff, which is the main reason for the delay in the preparation of the new strategy. Of the five priority programs in the NDS- (i) public sector reforms; (ii) improvement of economic infrastructure, especially interisland shipping and telecommunication; (iii) Education For Life aimed at raising standards of education and training; (iv) encouragement of export-oriented business investment (while encouraging overseas employment); and (v) upgrading of human settlement-the first four areas were reiterated in the State of the Nation Address in February 2002, and emphasis on greater self-reliance for the outer islands and reduction of poverty were included as government priorities.

2. The general framework for the Asian Development Bank's (ADB) country strategy for Tuvalu is spelled out in the Pacific Strategy.² In that document, Tuvalu was recognized as a very small country with high vulnerability, a weak resource base, and limited internal opportunities. ADB's strategy, therefore, focuses on improving governance and economic management, enhancing employment opportunities through skills development, and improving services on outer islands, in part, through introduction of sustainable financing mechanisms. Thee strategy is sharply focused in view of the small country size and the relative abundance of other sources of donor assistance, particular for physical and social infrastructure. A summary statement of country strategy is in Appendix 1.

3. To address the weaknesses in economic management and to provide continuing policy advice, several technical assistance (TA) projects have been provided. A 2002 TA on country strategy development will provide analysis of policy options and will assist the Government with the formulation of a new National Development Strategy (NDS). To help Government with the management and monitoring of state-owned enterprises (SOEs), a 2003 TA on Governance of Public Sector Enterprises is planned. In addition, a 2004 TA will help assess options for tapping low recurrent cost, renewable energy sources (such as solar power), in line with the Government's interest in improving the cost effectiveness of public services and utilities.

4. To enhance employment opportunities, the strategy supports the upgrading of the Tuvalu Maritime Training Institute under a proposed 2002 loan. The project will enable the institute to remain accredited by the International Maritime Organization (IMO) and thereby to continue to graduate seafarers for overseas employment. Such employment constitutes the main source of jobs and income for Tuvaluans in the private sector.

5. Under ADB's strategy, social development is being addressed under the recently closed program loan and its ongoing associated TA, both approved in 1999, that aims at (i) increased autonomy for the outer islands, (ii) improved standard of governance and administration on the outer islands, (iii) delivery of sustainable financial resources to support island autonomy, (iv) improved delivery of public sector services to the outer islands, and (v) promotion of business development. The loan helped establish the Falekaupule Trust Fund (FTF) which will provide a sustainable stream of funding for investment projects in outer island communities.

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