Regions and Countries

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p. 3 of 5 BACK | NEXT I. Country Strategy II. Current Development Trends and Issues III. Implementation of the Country Strategy and Program IV. Portfolio Management Issues V. Country Performance and Assistance Levels

Country Strategy and Program Update 2003-2005: Tuvalu

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III. Implementation of the Country Strategy and Program

A. Progress under the Poverty Partnership Agreement

24. The Government of Tuvalu has been invited to work with ADB in a poverty partnership, and a draft agreement is under discussion. The draft poverty partnership agreement seeks the Government's commitment to analyze the nature of poverty in Tuvalu, design appropriate strategies to reduce poverty and incorporate these strategies into the country's development plans, consistent with the Government's priorities. It is noted that the Government's current priorities and ADB's proposed assistance program are addressing this issue.

25. Tuvalu is scoring high on almost all goals and targets in achieving the Millennium Development Goals. Although poverty is not considered an issue yet, the Government acknowledges that the disparity between the population on Funafuti and the outer islands, where primarily the old, the very young, and women reside, is growing, and among the people who have immigrated to Funafuti, pockets of emerging poverty exist. ADB has assisted with the establishment of the FTF, which specifically prioritized development on the outer islands. The proposed TMTI upgrade loan for 2002, will primarily benefit the outer islands as the majority of seafarers come from here.

B. Progress in the Country Strategy and Program Focus Areas

26. The focus on pro-poor growth was the rationale for the assistance to the establishment of the FTF, which originally aimed to secure more funds for self-determined and self-managed development projects in the outer islands through government contributions matching the ADB loan and the individual island contributions. Consolidation of the fund occurred on 4 February 2000, and the FTF follows investment and distribution principles similar to those of the TTF. Following the receipt of the second tranche of the ADB loan, matching funds by the Government, and additional deposits made by three island communities, total FTF contributions grew to A$15.9 million by November 2001.

27. However, the fund size available for each island is relative to the initial contributions made by each community. Therefore, those islands that were in better cash positions at the time of fund consolidation were able to secure proportionately larger Government matching funds. The TA associated with the ADB loan is currently implementing special consultations and meetings to devise an alternative formula taking into the equation criteria other than only contributions, e.g., population size. It is hoped that these consultations will result in the necessary unanimous decision by the island councils to change the deed and apply a more equitable distribution formula.

28. The rationale for the proposed loan in 2002 to Upgrade of Tuvalu Maritime Training Institute (TMTI) is the fact that the outer island communities benefit most from the remittances sent home by the seafarers who graduated from TMTI. About 60% of Tuvaluan seafarers come from the outer islands, with only 10% from Funafuti, and 30% were seafarers born outside Tuvalu. Especially the islands Nanumea, Nukufetau, Nukulaelae, and Niutao have a very strong reliance on remittances. Income from wages, salaries, and businesses combined does not equal that provided by remittances. The outer islands also have very little potential for remuneration from resource-based activities. Less than 15% of the income on any of the outer islands can be tied directly to resource-based activity, such as fishing, farming, or production of handicrafts.

29. TA 3735-TUV: Country Economic Study and Strategy Development will directly assist the Government towards its formulation of a new MTDS. In addition, the TA will address improved financial management within the Ministry of Finance by analyzing opportunities for improved accounting procedures with direct linkages between the accounts division, Treasury, Payroll, and asset management. This will ultimately position the Government to implement appropriate accounting procedures and reporting from the SOEs.

30. The smallness of Tuvalu's individual islands and atolls and their subsequent ecological vulnerability calls for appropriate environmental consideration in all aspects of development. Power generation is traditionally a major pollutant, and when a country in addition is almost 100% dependent on imports, there is a need to plan diligently when the power supply needs upgrading or new investment. ADB can contribute towards responsible development by engaging itself in this sector as well.

C. Highlights in the Coordination of External Funding and Partnership Agreements

31. The largest development partner for Tuvalu is the Government of Japan. Japan delivered a new interisland vessel in February 2002 and is currently building a new hospital in Funafuti, which is expected to be completed in 2003. The future program includes upgrading the main wharf in Funafuti as well as wharves and landing sites in all the outer islands, and upgrading the airstrip on Funafetau island with the long-term objective of establishing a major fishing center there.

32. Taipei,China is financing the construction of the new three-storey central government office building in Funafuti. Tender has been awarded and construction is expected in the second half of 2002.

33. The focus of European Union assistance is on social development support (90%), specifically for activities in the outer islands in education, water supply, and environment, and the remaining for support to nonstate actors for development activities and capacity building.

34. The assistance of the United Nations Development Programme is primarily directed towards reducing disparities in services and opportunities between Funafuti and the rest of Tuvalu, and within the outer island groups, through strengthening the capacities of the Falekaupules³ for effective decentralization. Another areas for support is governance and human rights, and the environment and vulnerability. An important activity is training at all levels to facilitate better understanding of processes and mechanisms at the Falekaupule level to ensure that gender concerns are addressed in development activities. In addition, targeted social/economic analyses will be undertaken to feed into processes for improved policy development.

35. The Australian Agency for International Development supports in-country training in (i) health, (ii) accounting, (iii) management, (iv) civil works, (v) mechanical works, and (vi) secondary teacher training. Overseas scholarships and training is also a major program. In addition, TA in education is given in curriculum development, teacher training, and education management. A waste management program in Funafuti that has been supported for 3 years will be completed in 2002.

36. The New Zealand Overseas Development Agency (NZODA) has a large program of overseas scholarships and training, and salary support to expatriate staff at TMTI; strengthening of local governments in the outer islands for better management of FTF; and, together with ADB, support for the participatory monitoring evaluation survey (measuring standards of living on the outer islands). In addition, NZODA is supporting reef channel upgrading, and assists with support to the meteorological station. NZODA's future focus is on human resource development, outer island development, and support to the TTF. A matrix showing the various agencies' interventions is attached in Appendix 1.

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