Country Profiles

Total land area spread over 82 islands	12,190km2 [1]
Exclusive economic zone (EEZ) area	680,000km2 [1]

Resident population (2008 estimate)	232,908 [2]
2015 forecast	277,572 [2]
Average annual population growth rate 2008-15	2.7%
Population density (2006)	19/km2
Women in parliament	1 out of 52 members
Human Development Report 2009 – HDI rankings (out of 182)	126[5]

The political system in Vanuatu is generally described as unstable and fragmentary, with political competition based on patronage rather than competing policy platforms. It has been characterised by fierce infighting within unstable coalitions, with no fewer than 16 changes in government in the 13 years leading up to the 2004 elections. However, since then there has been a degree of stability in that the previous prime minister remained in power for the full term, albeit, with a regularly changing coalition. The pattern post 2009 elections has been similar with the prime minster remaining amidst coalition changes after a series of no confidence votes.

Head of State	President Iolu Abil – elected 3 September 2009. The president is elected for a period of five years by an electoral college comprising members of parliament and the presidents of the six provincial councils.
Head of Government	Following a vote of no confidence on 6 December 2010, Sato Kilman became Prime Minister.
Executive	The prime minister appoints a council of ministers and together they constitute the executive arm of government. The prime minister appoints the council of ministers, whose number may not exceed one quarter of the number of the members of parliament. There are 13 government ministries: – Ministry of Prime Minister – Ministry of Agriculure and Fisheries – Ministry of Education – Ministry of Finance and Economic Development – Ministry of Foreign Affairs – Ministry of Health – Ministry of Infrastructure and Public Utilities – Ministry of Internal Affairs – Ministry of Justice – Ministry of Lands, Geology and Mines – Ministry of Ni Vanuatu Business Development – Ministry of Sports and Youth Development – Ministry of Trade and Business Development and 27 government departments under them.
Civil Services	The capacity of the Vanuatu public sector to deliver quality public services has progressed, but remains limited as witnessed by its low score in table 1. Spending on health and education as a percentage of the overall budget is high by developing country standards, but remains insufficient to meet the needs of the increasing population. Apart from primary schools and first aid posts, most ni-Vanuatu have little contact with the state. The public sector is generally characterised by (i) limited human resource base, (ii) absence of modern human resource management and (iii) having limited reach outside of the major urban centres. The result is low productivity of staff, with high levels of key personnel exposure as a select few officers undertake many of the jobs with the greatest responsibility across the spectrum of the public service. This leads to a level of discontinuity in policy design and implementation, rendering capacity development largely unsustainable. The recruitment of public servants is done via one of three commissions – the Public Service Commission (PSC), the Police Service Commission, the Teaching Services Commission. The Judicial Service Commission looks after officials of the Courts. There is only one department that has its own legislation – the State Law Office – which allows them to recruit and set remuneration levels independently. The total number of permanent civil servants is approximately 4,500 of which approximately two thirds are male and majority tend to be in the 31-40 age bracket. The PSC has the largest number of employees and was established as part of the wide ranging civil service reforms established under the Comprehensive Reform Program (CRP) in 1998. The CRP effectively replaced the former Department for Personnel with an independent commission. However, the board of the all the commissions are political appointments and, unlike other jurisdictions, the commissions in Vanuatu continue to hold the power to recruit and dismiss as this power was not devolved to the line ministries. There have been two attempts to down size the civil service – one in 1994 and one in 1997. The first followed a civil service strike based around claims of corruption. The second was part of the CRP. Neither was particularly effective in terms of reducing overall numbers or increasing skills and conditions. Perhaps the most relevant potential change on the horizon is the proposal to change the current Human Resource Development Unit within the PSC into an Institute for Public Administration.
Local Government	Decentralisation has been a politically charged subject in Vanuatu since the colonial period, representing (together with language and education policy) the principal dispute between anglo and francophone parties. Francophone interests promoted a federal system, to allow francophone areas to retain closer ties with France. In reaction to this, the Vanua’aku Party pursued a centralising agenda as a means of preserving national unity. At independence eleven local government councils were created on a provisional basis, while decentralisation remained a topic of intense political debate. The Decentralisation Act of 1994 created six provincial government councils (more generally known as provinces) with each covering a group of islands. A further two municipal councils were declared in the urban centres of Port Vila (Efate) and Luganville (Santo). In 2009 Lenakel (Tanna) was declared the country’s third municipality. Councillors are popularly elected and the provinces are headed by a president and the municipalities by a mayor. Local government staff are appointed by the council, with the exception of the provincial secretary generals and accountants who are appointed by the PSC. The reforms were poorly conceived and executed and the provincial structure is commonly seen as ineffective. Provincial governments are under-resourced and largely unable to deliver services outside the provincial headquarters. There is little coordination between provincial administrations and central government. There are a further 63 area councils under the provincial government and each has only a single employee (area secretary) responsible mainly for tax collection. A Decentralisation Review Committee was established in 2001 to assess local government structures, although its recommendations have not been acted upon. In 2008, the Department of Local Authorities revisited the issue.
Judiciary	The chief justice is appointed by the president after consultation with the prime minister and the leader of the opposition. Up to three other justices are appointed by the president on the advice of the Judicial Service Commission. Two or more members of the Supreme Court may constitute a Court of Appeal. Magistrate courts handle most routine legal matters. The legal system is based on British common law and French civil law. The Constitution also provides for village or island courts presided over by chiefs to deal with questions of customary law.
International Organisations	ACCT, ACP, ADB, C, FAO, G-77, IBRD, ICAO, ICRM, IDA, IFC, IFRCS, ILO, IMF, IMO, IMSO, IOC, ITU, ITUC, MIGA, NAM, OAS (observer), OIF, OPCW, PIF, SPC, UN, UNAMID, UNCTAD, UNESCO, UNIDO, UPU, WHO, WMO, WTO (observer>

The government has recently embarked on a number of initiatives aimed at improving both the delivery and reach of services, and the regulatory environment. A monitoring and evaluation unit has been established within the Department of Strategic Policy Planning and Aid Coordination in the Ministry of Prime Minister. Efforts are underway to improve working relationships across government, streamline reporting systems and improve communications (including an e-government project and roll out of the Financial Management Information System in the provinces). A review of the Public Service Act (1998) and the Public Service Staff Manual is also underway. The telecommunications sector has been opened up to competition, leading to dramatic increase in access to affordable services, and the regulatory function has been defined under the Telecommunications and Radiocommunications Regulation Act (2009). Similarly, the Utilities Regulatory Act (2007) provides for an independent authority to oversee the monitoring of existing water and electricity contracts. Existing reforms efforts need to be deepened. This includes the Public Service Commission playing its independent role under the Constitution, reviewing and reforming state owned enterprises, and providing for a free flow of information on government programs and services to members of parliament, citizens, civil society and development partners to increase accountability of leaders and government institutions. The overarching strategic planning tools are the Priorities and Action Agenda (PAA) and the Planning Long Acting Short (PLAS) policy statements. Each ministry has corporate or strategic plans, which should be reflected in the annual plans and budget submissions. However, the national budget remains the best indicator of the government’s actual priorities. The information in the budget documents is comprehensive and the in-year budget reporting excellent by Pacific standards. There is limited reporting on state owned enterprises and fiscal risks. Whilst the overall credibility of the budget is well regarded, at the category level there are variations due to the extensive use of virements (the transfer of a surplus from one account to cover a deficit in another). The Finance Management Information System (FMIS) is probably the most comprehensive and well implemented in the region. It is possible to produce a range of management reports in real time. The budget is released based on cash flow submissions, and payroll is controlled by a system of financial visas that limit overspending. Procurement is fully devolved with amounts above 5 million vatu (approximately AUD$57,500) going through a tender board. There is no effective recording of expenditure arrears or liabilities although there have been improvements in the quantification of these in regard to having a whole of government balance sheet. However, accounting reports are excellent, with accounts reconciled and collated on a daily basis and reports produced in real time. The Public Finance and Economic Management Act was updated in 2009 and many of the new revisions further strengthen an already strong public financial system. The changes include creating a new treasury division to encompasses the former budget and planning units.

Vanuatu policy development and implementation framework

Vision

An educated, healthy and wealthy Vanuatu

Strategic Priorities	Good governance, growth, jobs, health, education, infrastructure
Sector Strategies	Fiscal Strategy: Budget Policy Statement and Government Investment Program (GIP)
Medium Term Expenditure Framework
Ministry Corporate Plans	Annual Budget: Recurrent Development and Aid donor funded programs
Ministries and departments, constitutional bodies, statutory bodies
Development outcomes

There is a major gap between the state institutions, concentrated in the urban areas, and the informal and traditional institutions that govern village life. This is regarded as being one of the key elements to the limited development success at the village level. The state has limited capacity as a provider of services, or to play an active role in rural development. This reflects not just the high costs of service delivery associated with Vanuatu’s geography, but also the lack of any effective institutional structures at the regional level. In the absence of the state, traditional and informal institutions, including chiefs, churches and a range of modern NGO’s and community organisations, continue to provide basic governance functions and services at the village level. By most accounts, they are fairly robust and enjoy a high degree of popular legitimacy. However, changing expectations among the rural population, greater mobility and the spread of the formal economy are placing increasing strains on local and traditional institutions.

GNI per person 2007 (Atlas method)	US$1,840 [2]
GDP current (2009 estimate)	US$554m [3]
GDP per capita (2009 estimate)	NZ$2,301 [3]

Labour market‚ Formal sector (2000)

Number of employees	14,272 [4]
% of workforce	18% [4]
% Female	33% [4]
% Public sector	31% [4]
% Private sector	69% [4]

The media in Vanuatu sees the Press being independently owned with a state governed and owned corporation in broadcasting.

Telephone	Telecom Vanuatu Limited (TVL) is the leading provider of landlines, internet and mobile services throughout Vanuatu. Digicel is the competing telecommunications network with Telsat also offering internet services.
Internet	17,000 users as of November 08 [7]. 53,60 Facebook users as of March 2011 (2.45% of population) [8].
Newspapers	There are three independent newspapers- Daily Post (daily) Vanuatu Independent (weekly) and Vanuatu Times (weekly).
Television	Vanuatu Broadcasting and Television Corporation (VBTC) (state TV and radio broadcaster).
Radio	VBTC and BBC World and Radio Australia broadcast locally on FM radio.

Vanuatu has no official military although the Vanuatu Mobile Force (VMF) do perform some of the functions normally associated with an army. The VMF also includes the Police Maritime Wing. The VMF was established following the secessionist campaigns in Santo immediately following independence when the PNG defence force were called on to restore law and order. Since then there has been no real need for military intervention in Vanuatu. There have been sporadic tensions between the hierarchy of the regular police force and the VMF leading to a standoff in 2003. There is limited or no police presence in the outer islands where security is maintained by the network of chiefs, churches and community organisations. Vanuatu continues to be an active part of overseas UN peacekeeping missions and has had officers posted to the Solomon Islands, East Timor, Kosovo and Sudan.

Total land area	26km2 [1]
Exclusive economic zone (EEZ) area	757,000km2 [1]

Resident population (2008 estimate)	11,035 [2]
2015 forecast	11,445 [2]
Population annual growth rate 2010	0.5% [3]
Population density 2008 estimate	424/km2
Women in parliament	0 out of 15 members
Human Development Index score	0.700[4]

Tuvalu, one of the world’s smallest independent nations, was formerly known as the Ellice Islands and was administered by Britain as part of a protectorate from 1892 to 1916 and as part of the Gilbert and Ellice Islands Colony from 1916 to 1974. In 1974, the Ellice Islanders voted for separate British dependency status as Tuvalu, separating from the Gilbert Islands which became Kiribati upon independence. Tuvalu became fully independent within the Commonwealth in 1978. Tuvalu is a constitutional monarchy with a 15-member unicameral parliament elected every four years. Cabinet consists of the prime minister, elected by a majority of the members of parliament, and several ministers. There are no organised political parties and members usually align themselves in informal groupings. Members of parliament generally have very close links with their island constituencies (two members are elected from each of the main islands and 1 member from the remaining island) and effort is directed towards balancing island representation in the cabinet.

Head of State	Her Majesty Queen Elizabeth II (since 1 October 1978) represented by His Excellency Sir Filoimea Telito (since 15 April 2005).
Head of Government	Prime Minister Apisai Ielemia (since 14 August 2006). The prime minister is elected by a majority vote in the parliament.
Executive	The Governor General appoints a cabinet on the recommendation of the prime minister. There are currently nine cabinet ministries: – Ministry for Communications and Transport – Ministry for Education and Sports – Ministry for Finance, Economic Planning and Industries – Ministry for Foreign Affairs – Ministry for Health – Ministry for Home Affairs, Rural, and Urban Development – Ministry for Natural Resources – Ministry for Works and Energy – Ministry of Public Utilities and Industry
Civil Services	The prime minister appoints a cabinet, who together with the speaker of parliament typically form the government, with the remaining parliamentarians normally forming the opposition. Currently there are nine ministries (an additional two were created in 2007) which means governments can hold a comfortable seven seat majority, however in practice the cabinet positions are shared across a lesser number of ministers. Each ministry is headed by a cabinet member, who is assisted by a permanent secretary, a career public servant, who directs the staff of the ministry. Despite the priority to develop the human capital base and a generous scholarship program, the capacity of the public sector to deliver quality public services remains limited. Under the Tuvalu Public Service Act and a Public Service Ordinance and General Administrative Orders, the Public Service Commission is responsible for the efficient management and control of the entire public service, including recruitment, dismissal, promotions and performance monitoring.
Local Government	Each of Tuvalu’s eight inhabited islands is based around a single village and has a distinct sense of community and identity. Each island also has its own high- chief (ulu-aliki) and several sub-chiefs (alikis) and elders (te sina o fenua), and together they form an island council (falekaupule). The island councils of chiefs/ elders cooperate with the national government, and are the supreme authorities on matters of custom. Under the Falekaupule Act increasing autonomy was given to the island councils to determine development priorities within the central government’s overall development goals of public sector reform, human resource development, improvement of the country’s economic and education infrastructure and the further development of its capacity to manage its narrow resource base. A funding authority was correspondingly devolved from the central government and an outer island trust fund (the Falekaupule Trust Fund) was established. Tuvalu’s significant development challenges are most evident in the outer islands. Residents of the outer island have very limited access to services and little if no opportunities for paid employment. This results in a dependence on family members – either through remittances from international seafarers or those employed in the public service based in the capital – Funafuti. The allocations to the island councils through the Falekaupule Trust Fund has proved to be an important decentralisation measure and has provided resources for local level community projects, which in turn have generated some income earning opportunities for those living in the outer islands. Lack of transport infrastructure and the dispersal of the small population across nine remote atolls severely constrains service delivery and income generating opportunities in the outer islands. This has resulted in continuing high migration rates from the outer islands to the capital and overseas.
Judiciary	The court system consists of: The High Court with unlimited jurisdiction (a chief justice visits twice a year to preside over its sessions and its ruling can be appealed to the Court of Appeal in Fiji. Magistrates’ Courts with summary jurisdiction that includes: criminal cases that have a maximum punishment not exceeding 5 years’ imprisonment and/or fine of up to $1,000; civil cases involving amounts up to $10,000; and appeals from island courts. Eight Island Courts with jurisdiction within the boundaries of the island on which they are established and over inland and adjacent waters. Within that area they have summary jurisdiction to deal with limited civil matters, including: divorce, child custody, claims in contract and tort where the amount involved does not exceed $60; some minor criminal offences (where the maximum punishment for which is a fine of $100 and/or a period of imprisonment of six months). There are five sources of law in Tuvalu: the Constitution, acts of Parliament, customary law, applied laws, and the common law. In addition, international law also applies in Tuvalu.
International Organisations	ACP, ADB, C, FAO, IFRCS (observer), IMO, IOC, ITU, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, UPU, WHO.

Tuvalu’s Te Kakeega II National Strategy for Sustainable Development 2005 -2015 is the overarching strategic framework that covers: (i) good governance; (ii) macroeconomic growth and stability; (iii) social development (health, welfare, youth, gender, housing, and poverty alleviation); (iv) outer island and falekaupule (local island council) development; (v) employment and private sector development; (vi) human resource development; (vii) natural resources (agriculture, fisheries, tourism, and environmental management); and (viii) infrastructure and support services. In light of the small population, the limited resource endowments, and subsequently limited opportunities in the country, the government is focusing on human development as the primary goal in implementing Te Kakeega II. Its small size and geographic isolation presents Tuvalu with a series of significant development challenges, which have been compounded by the threat of climate change. Spread over a scattered group of nine atolls, the country has a total land area of only 26 square kilometres and the highest elevation is 4.6 metres above sea level (on Niulakita). Faced with these challenges, Tuvalu, together with its development partners, has embarked on measures to strengthen its human resource base, economic planning and reform to the public sector. The main challenge for the government is to correct the fiscal imbalance and produce a credible budget with appropriate allocations to the priority social development sectors. Tuvalu has struggled to produce credible and prioritised budgets in past years due to: weak budgeting skills across ministries, limited recording or monitoring of expenditures, poor accounting of donor-funded activities, capacity constraints in ministries preparing sector plans with financial forecasts, and legacies of past policy decisions. Successive governments have focused on education and health in recognition of the country’s primary asset; its human capital. The government depends heavily on donor grants and transfers from the Tuvalu Trust Fund to fund the recurrent budget. The Tuvalu Trust Fund was established in 1987 (with an initial injection of $27m by the governments of Australia, New Zealand and the United Kingdom) as a supplement to cover shortfalls in the national budget. The major exceptions to the budget deficit being financed by drawdown from the trust fund were in 1999 and 2000, when loan funds were used to finance one off capital projects. In 2009, the global recession impacted on the market value of the Tuvalu Trust Fund and with uncertain market conditions, distributions from the fund do not look likely for some years. In Tuvalu’s micro-sized economy, even small capital projects can result in short term, high economic and employment growth, but the stimulus can quickly dissipate. An area of potential financial risk is that posed by state owned enterprises (SOEs). The Tuvalu Electricity Commission and Telecommunications Corporation both receive substantial government subsidies – with the aim of keeping prices down in the rural areas. The Public Enterprise Reform and Management Unit within the finance ministry is working to strengthen SOE reporting and monitoring.

Overview of key national strategies for improving governance^[5]

Key Policy Objectives	1. Public Administration – reform public service on a par with available resources. 2. Fiscal Stability – restore fiscal management and discipline. 3. Public Enterprises – reduce subsidies. 4. Falekaupule (traditional island assembly) – institutionalise good governance practices at the Falekaupule level and institute reforms to improve availability of land for development and improve urban planning and management.
Public Sector Reform	Realign the role and size of the public service. Each department prepare 2-3 year sector master plans. Identify departments that can be reorganised for commercialization. Contract out senior public service posts. Clarify the roles of Minister, Secretary, and heads of department to eliminate political interference. Review policy on public servants owning private businesses.
Fiscal Management	Set strict compliance to fiscal targets, review Public Finance Act, Financial Instructions, Stores Regulations and other related legislation. Formulate medium-term fiscal policy framework and establish a Macroeconomic Policy Committee. Restructure tax and tariff regimes.
Public Enterprise Management	Produce annual reports and audited accounts and make available to the public. Clearly define, cost out, and better target government subsidies. Assess the viability of privatising selected public enterprises. Improve selection process of Boards of Directors. Establish clear guidelines on the roles and responsibilities of Ministers, the Board, and Management of public enterprises.

Prior to colonisation decision-making in Tuvalu was vested in the island high chiefs (Ulu Aliki), included dealing with all administrative matters and the right to dispense justice and punishment. Chiefly title was generally passed from one generation to the next. The arrival of the missionaries saw the emergence of church leaders rivalling traditional chiefs, a situation that exists today where church leaders are afforded similar respect to traditional chiefs. Following independence in 1987, the Constitution sought to protect the traditional values of Tuvalu. In 1997, the Falekaupule Act established a local government system that was based on the traditional ways of decision making in Tuvaluan society, with administrative decision making passed to an elected island council (Kaupule) under the control of a island president (the Pule o Kaupule) and a Secretary. While the situation varies across the atolls, the position of high chief is increasingly elected rather than hereditary and the Ulu Aliki is a member of the Kaupule. The head of the family (matai) will represent the family in local affairs and is responsible for sharing the fruits of the land and dealing with the needs of the family. Land is generally held in communal ownership and cannot be alienated (sold to a non-citizen).

GNI per person 2007 (Atlas method)	US$2,720 [2]
GDP current (2008 estimate)	US$28.3m [3]
GDP per capita 2008 estimate	US$2,874 [3]

Labour market‚ Formal sector

Number of employees	3,869 [1]
% of workforce	40.5% [1]
% Female	31.1% [1]
% Public sector	40.3% [1]

Freedom of speech and media freedom is generally respected in Tuvalu, although the main media forms are government operated and owned.

Telephone	Radio telephones between islands and international calls can be made via satellite.
Internet	43,00 users as of June 2010 [6]. 1580 Facebook users as of March 2011 (12.77% of population) [7].
Newspapers	Tuvalu fortnightly newspaper: Tuvalu Echoes covers Sikuleo o Tuvalu (government news).
Television	Foreign television received via satellite.
Radio	Tuvalu Media Corporation is state owned and operates Radio Tuvalu (FM with BBC relays).

Tuvalu has no regular military forces. Its police force includes a Maritime Surveillance Unit for search and rescue missions and surveillance operations. The police have a Pacific-class patrol boat (HMTSS Te Mataili) provided by Australia under the Pacific Patrol Boat Program for use in maritime surveillance and fishery patrol. Tuvalu has provided police officers to the Regional Assistance Mission (RAMSI) to Solomon Islands since December 2004.

Total land area	688km2 [1] with 69 islands, 36 of which are inhabited
Exclusive economic zone (EEZ) area	700,000km2 [1]

Population (2006 census)	101,991 [2]
Average annual growth rate (1996-06)	0.4% [2]
Population density (2006)	148/km2
Women in parliament	1 out of 32 members
Human Development Index score	0.786[4]

The Kingdom of Tonga is a constitutional monarchy, which is unique in the Pacific. Under arrangements in place until November 2010, the governing structure comprises the King in Privy Council, the cabinet, the legislative assembly and the judiciary. The King is head of state and the Prime Minister is head of government. The King presides over the Privy Council, which comprises cabinet members (ministers, including the prime minister plus the governors of Ha’apai and Vava’u). The Privy Council is the highest executive authority in the kingdom. The King appoints the ministers and governors; in effect, this means appointment for life or until they receive his permission to retire or are asked to resign. The Constitution provides for a legislative assembly comprising the 16 cabinet members, nine elected representatives of the nobles (there are 33 noble titles in Tonga) and nine elected representatives of the people. Elections for the legislative assembly have been held every three years, with nobles’ and peoples’ representatives being elected on different days. Elections were last held in April 2008. The November 2010 elections will be held under new arrangements following a process of political reform, which has dominated politics in Tonga in recent years. On 22 July 2008, legislation was passed for the establishment of a Constitutional and Electoral Commission tasked to examine almost all aspects of political reform, including alternate electoral arrangements. Elections expected in November 2010 will see an increase in the number of parliamentarians directly elected by the Tongan people (people’s representatives). A new formula was agreed by the legislative assembly in December 2009 and legislation passed in April 2010. The proposed model considerably reduces the powers of the monarch, which will devolve to the cabinet and the cabinet will be answerable to the legislative assembly. Under the new arrangements, the legislative assembly will comprise 17 people’s representatives, nine noble representatives elected by Tonga’s nobles and up to four other members appointed by the king on the advice of the prime minister of the day. Members of the elected legislative assembly will elect a prime minister, who will then be formally appointed by the king. For the first time the elected prime minister will have a constitutional mandate to govern.

Head of State	His Majesty King Siaosi Taufaʻahau Manumataongo Tukuʻaho Tupou V (commonly known as George Tupou V) since 11 September 2006. Following the constitutional changes in November 2010, the King will remain as head of state but relinquished his executive powers, including the ability to appoint the prime minister and ministers.
Head of Government	Following the first democratic elections on 25 November 2010, Prime Minister Lord Tu’ivakano was elected. As opposed to the usual appointment by the King, following the constitutional and electoral reform, the prime minister is elected by parliamentary vote.
Executive	After winning the majority of the house by parliamentary vote, the prime minister then appoints cabinet members. There are currently 11 ministries (although some ministers hold a number of portfolios), including: – Justice – Finance – Health – Education, Women’s Affairs and Culture – Lands, Survey and Natural Resources – Agriculture, Food, Forestry and Fisheries – Public Enterprises and Revenue – Labour, Commerce and Industries – Police, Prisons and Fire Services – Tourism – Training, Employment, Youth and Sports.
Civil Service	The public service is currently administered through 18 government ministries. The majority of governmental functions and services are centralised and provided by the national government. There is no sub national government in Tonga; however there are district and town officials’ representatives who act as an interface to the central government, whist the two outer island governors are responsible for government administration through the relevant central government agencies. The public service makes up approximately 18 per cent of the employed formal labour force. The Tongan police and defence forces are not classified as public servants, and use their own pay roll system with different classifications Public service management, roles and responsibilities are articulated in the Public Service Act 2010 and regulations. The Public Service Commission oversees the human resource management functions and assists the ministries and departments by participating in recruitment processes, reviewing of ministerial proposals for promotions, new appointments, demotions and dismissals.
Local Government	Tonga has a centralised governance structure and does not operate sub national government. All financial accountabilities reside with the Ministry of Finance and national planning. Tonga is administratively divided into three main island groups: Ha’apai, Tongatapu, and Vava’u. The two governors who are members of the Privy Council have delegated responsibilities in the overall administration and reporting of outer islands affairs. In the districts and towns, official representatives chosen by the community stationed in these islands report to the office of the prime minister. The National Strategic Planning Framework envisions a significant change in the governance structures for the outer islands through the establishment of village districts and councils with the objective to give communities a greater say in local and regional development.
Judiciary	The Supreme Court exercises jurisdiction in major civil and criminal cases. Other cases, heard in the Magistrate’s Court or the Land Court, may be appealed to the Supreme Court and then to the Court of Appeal, the appellate court of last resort. The Privy Council has jurisdiction over cases on appeal from the Land Court dealing with titles of nobility and estate boundaries. The judiciary is independent of the king and the executive branch, although Supreme Court justices are appointed by the king. The king may commute a death sentence. In addition, the court system consists of a court martial for the Tonga Defence Services, a court tribunal for the police force, and a court of review for the Inland Revenue Department.
International Organisations	ACP, ADB, AOSIS, C, FAO, G-77, IBRD, ICAO, ICRM, IDA, IFAD, IFC, IFRCS, IHO, IMF, IMO, IMSO, Interpol, IOC, ITU, ITUC, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO.

Tonga’s National Strategic Planning Framework (NSPF) sets the overarching development framework for the country. The NSPF sets out four key enabling themes: ␣␣ Continue progress to smaller and more efficient government to transfer resources to improved services and maintenance of resources. ␣␣ Ensure State Owned Enterprises are accountable to government and provide dividends in proportion to capital invested. ␣␣ Improve the effectiveness of revenue collection to ensure a level playing field and that services to the people can be appropriately funded. ␣␣ Ensure a more coordinated whole of government approach to donor funding. Tonga is embarking on an ambitious program of political, economic and public sector reform. Since taking the decision to join the World Trade Organisation (WTO) the government has started many reforms especially on the revenue side of the budget. On the expenditure side the major challenge remains the high public sector wage bill and how to reduce the number of civil servants in the absence of a vibrant private sector. The November 2010 elections are expected to return a more representative, democratic parliament. The 2010 Public Expenditure and Financial Accountability (PEFA) Public Financial Management Performance Report found Tonga’s public financial management (PFM) system to be based on a solid legal and regulatory framework to oversee the government’s budgeting, spending and accountability structures. These include measures to ensure responsibility and accountability for public funds and procedures covering expenditure control and procurement. The overall impression of the PEFA assessment team was that there are clear rules and procedures in place and these tend to be followed, and that the PFM system is mostly operating at average or above average levels when compared to international best practice. Significant improvements in recent years have included attempts to shift towards multi-year budgeting, and revenue collection and enforcement, which has resulted in the level of tax arrears being identified and actively pursued using a risk management approach. There remains room for further improvements, notably in relation to improving budget credibility at the ministry/departmental/agency level by strengthening the linkages between the National Strategic Planning Framework and individual corporate plans, and less reliance on the Contingency Fund to adjust agency budgets during the course of the year. There is also scope to strengthen the transparency around financial operations of public enterprises, procurement contracts entered into by the state, and audits performed by the Audit Office. Procurement is managed by Treasury Instructions and the procedures generally ensure open competition for tendering above what are deemed to be sensible thresholds. However, the policy is not yet firmly established in regulations or legislation and procurement decisions are not publicly available.

Vision ^[5]

“To create a society in which all Tongans enjoy higher living standards and a better quality of life through good governance, equitable and environmentally sustainable private sector-led economic growth, improved education and health standards, and cultural development”.

Objectives

- Facilitate Community Development by involving district/village communities in meeting their service needs. – Support private sector growth through better engagement with government, appropriate incentives and streamlining of rules and regulations. – Facilitate continuation of Constitutional Reform. – Maintain and develop infrastructure to improve the everyday lives of the people. – Increase performance of Technical Training Vocational Education & Training to meet the challenges of maintaining and developing services and infrastructure. – Improve the health of the people by minimising the impact of Non- Communicable Diseases. – Integrate environmental sustainability and climate change into all planning and executing of programs.

Enabling Themes

- Continue progress to smaller and more efficient government to transfer resources to improved services and maintenance of resources. – Ensure State Owned Enterprises are accountable to government as owner and that they provide dividends for the benefit of the people in proportion to capital invested. – Improve the effectiveness of revenue collection to ensure a level playing field and that services to the people can be appropriately funded. – Ensure a more coordinated whole of government approach to donor funding.

As is the case across the Pacific islands, kinship ties are of paramount importance. The two major kin groups are famili (family) and kainga (extended family). All land is owned by the king, the nobles, and the government. Foreigners cannot own land by constitutional decree. Owners have the right to sublet land. The Constitution entitles every male citizen above the age of 16 to lease a plot of land from the government or the noble or the king. The growing population and its concentration in the capital make it increasingly difficult to exercise this right. A female is always considered higher in rank than a male, although inheritance of land and titles goes through the male line. The 1875 constitution eliminated the title of chief and introduced the title of nopele (noble), which was given to thirty-three traditional chiefs. An increasingly market-oriented economy and an expanding bureaucracy have resulted in a growing ‘middle class.’ The kingdom is divided into districts, each headed by a district officer. Every three years, each village elects a town officer who represents the government and holds village meetings where government regulations are made known. These meetings are open to villagers above 16 years of age to attend.

GNI per person 2007 (Atlas method USD)	2480 [3]
GDP current (2008 estimate)	US$276.5m [2]
GDP per capita (2008 estimate)	US$2,690 [2]

Labour market‚ Formal sector (2003)

Number of wage and salary earners	15,597 [2]
% of workforce	34% [2]
% Female	39% [2]
% Public sector	18% [2]
% Private sector	82% [2]

Tonga has a small economy that is heavily reliant on remittances from Tongans living and working overseas and foreign aid to fund a large current account deficit. Over recent years, Tonga has averaged approximately 200 million pa’anga (TOP) per year in remittances (A$133 million) although these have fallen by approximately 20 per cent over the last 18 months. This is likely due to the impact of the global financial crisis, which together with the civil unrest in Nuku’alofa in 2006 and administration weakness have contributed to the relatively poor performance of the economy in recent years. Revenue across all sectors declined in recent years – especially 2008-2009 – when earnings from tourism dropped by 6%, despite a 4% increase in visitor arrivals. Declines in electricity consumption, new car registrations, and imports (which fell by 10% in the first half of 2009) indicated an overall weakness in the economy. Nonperforming loans led to a deterioration of the banking and lending environment in 2008 with credit restrictions reducing business activities. Agriculture is the leading productive sector while the manufacturing sector is very small with limited export production in recent years. Tourism is modest but with potential for expansion. Tonga’s main trading partners are New Zealand, Australia, Fiji, the United States and Japan. Most Tongan exports are agricultural produce while imports cover the full range of consumer and industrial goods. In 2009, Tonga’s GDP was US$259 million and the economy was estimated to have contracted by 0.4 per, owing primarily to a slump in tourism activity and falling remittances. The International Monetary Fund have forecast public infrastructure spending will provide a temporary boost to economic activity in 2010/11, but caution that once those projects wind down it will be challenging to achieve growth in the 1 to 2 percent range.

The media in Tonga has limited independence.

Telephone	The Tonga Communications Corporation (TCC) is the government owned telecommunications company that provides fixed landlines, internet and mobile services (UCALL). Digicel is the local competitor that also offers these telecommunications services along with DigiTV.
Internet	84,00 users as of March 08 [6]. 7440 Facebook users (6.15% of population) [7]
Newspapers	Tonga Chronicle, Taimi ‘o Tonga and Talaki are weekly newspapers. Matangi Tonga is the only online magazine although Taimi ‘o Tonga has online services.
Television	The Tonga Broadcasting Commission (TBC) is state owned and operates Television Tonga and TV Tonga 2. There are two satellite TV operators with paid services namely Sky Pacific and Digicel TV. A privately owned church TV Channel, TBN operates Free To Air.
Radio	The Tonga Broadcasting Commission (TBC) operates two radio stations, a medium wave (AM) Radio Tonga and Kool 90 (FM). Privately owned FM stations are Broadcom FM 89.5, Radio Nuku’alofa FM 88.6, A3V 89.1 FM and the church radio FM 103.

Tonga has a national police service and a military service – the Tonga Defense Service (TDS), which includes a coastal naval unit and rural development service amongst others. The TDS functions and duties are specified in the Tonga Defense Service Act 1992, Privy Council Decision and Defence Board Decision. In Section 5, Part II of the Act the following functions and duties are specified: ‘The defence of the Kingdom; the aid of civil authorities in maintenance of order in the Kingdom; the support of civil authorities; and other functions and duties that His Majesty may from time to time determine’. The TDS receives support from the government’s of Australia, China, France, India, New Zealand and the United States of America. The United States military provides training to the TDS and conducts humanitarian civic action projects in Tonga. Since 2002, TDS personnel have been deployed as part of the RAMSI regional peacekeeping force in the Solomon Islands and between 2004-2008 to Iraq. In 2010 Tonga agreed to send troops to Afghanistan and the first deployment are expected to commence training in the UK in October 2010.

Total land area	28,000km2 over nearly 1,000 islands and atolls [1]
Exclusive economic zone (EEZ) area	1.6 million km2 [1]

Population (2008 estimate)	520,617 [2]
2015 forecast	624,667 [2]
Average annual population growth rate 2008-15	2.9% [2]
Population density	19/km2
Women in parliament	0 out of 50 members
Human Development Index score	135[5]

Independence from Britain was achieved on 7 July 1978. Solomon Islands is a constitutional monarchy with a Westminster- style parliamentary democracy political system. There is a 50 member unicameral parliament elected by the people every four years, and is chaired by an independent Speaker. Parliamentary representation is based on single-member constituencies.

Solomon Islands governments are characterised by weak political parties and highly unstable parliamentary coalitions. They are subject to frequent motions of no confidence and the make up of the cabinet changes frequently as a result. A further by-product of the history of instability is the staggering 24 government ministries in a parliament of just 50 seats. Despite the high number of no confidence motions, only one prime minister has lost office in a vote of no confidence in parliament – Hon. Manasseh Sogavare was toppled in December 2007 by his former education minister Hon. Dr Derek Sikua. The Sikua government introduced a Political Party Bill in an attempt to address the inherent instability in the political system. The proposed law would vest powers to remove a prime minister in the ruling parties internally and not in the parliament. The bill was subject of much debate both in parliament and amongst the wider community. The vote, two days before the dissolution of parliament in April 2010, failed by two votes to reach the required two thirds majority for the bill to pass into law. This link provides more information on the political parties contesting the 2010 election in Solomon Islands. 

Head of State	Her Majesty Queen Elizabeth II (since 7 July 1978) represented by His Excellency Sir Frank Kabui, Governor General (since 7 July 2009). The Governor General is appointed by the monarch on the advice of parliament for up to five years (eligible for a second term).
Head of Government	Prime Minister Hon Danny Philip (People’s Progressive Party) since 25 August 2010. The prime minister is elected by a majority vote in the parliament. The prime minister was elected with 26 votes, narrowly defeating Hon. Steve Abana (Solomon Islands Democratic Party) who received 23 votes.
Executive	The prime minister appoints the cabinet. There are currently 24 government ministries: – Ministry of Prime Minister and Cabinet – Ministry of Public Service – Ministry of Development, Planning and Aid Coordination – Ministry of Finance and Treasury – Ministry of Police, National Security and Correctional Services – Ministry of Women, Youth & Childrens Affairs – Ministry of Education and Human Resources – Ministry of Health and Medical Services – Ministry of Foreign Affairs and External Trade – Ministry of Commerce, Industry &Employment – Ministry of Culture and Tourism – Ministry of Agriculture & Livestock – Ministry of Lands, Housing and Survey – Ministry of Infrastructure Development – Ministry of Communication and Aviation – Ministry of Environment , Conservation and Meterology – Ministry of Fisheries and Marine Resources – Ministry of Energy, Mines & Rural Electrification – Ministry of Provincial Government and Institutional Strengthening – Ministry of Home Affairs – Ministry of National Unity, Reconciliation and Peace – Ministry of Rural Development and Indigenous Affairs – Ministry of Justice and Legal Affairs – Ministry of Forestry
Civil Service	The RAMSI intervention of 2003 led to a significant public sector support programme including civilian officials and technical advisors located within the Solomon Islands Government systems. The public service had been demoralised and weakened through the conflict, with salaries unpaid for long periods and the political leadership in turmoil. The result was greatly reduced productivity, poor service delivery, and the absence of fiscal controls resulting in large deficits and arrears. The focus of the government and RAMSI civilian programme after the cessation of hostilities was on restoring the machinery of government to improve accountability and service delivery and promote economic growth. Senior officers in the public service are being placed on performance contracts with measurable performance indicators. All government departments are being asked to include verifiable performance targets as part of their budget submissions, and to report on the accomplishment of these targets. Public service employment processes and laws are being rationalised and streamlined, with a view to ensuring transparency, merit-based selection, and equal opportunity. The Institute of Public Administration and Management (IPAM) has been re-established to provide training for public servants across government. At the same time, structures and systems in key line ministries are being reviewed and re engineered to eliminate waste and improve efficiency. Concern that the large presence of RAMSI was creating a parallel and at times disjointed systems of governance in the public service was noted in a Solomon Islands Government Foreign Relations Committee report Inquiry into the Facilitation of International Assistance Notice 2003 and RAMSI intervention. The extent to which reforms RAMSI has effected are sustainable in the long term is an area for consideration, and AusAID has begun moving some programs to the bilateral program.
Local Government	Defining local government structures and boundaries has been an ongoing process since before independence. The country inherited the administrative districts of the previous British protectorate in 1978 before being reorganised into seven provinces in 1981 and Honiara being declared a separately-governed Capital Territory in 1983. A further change was made in 1995 when Choiseul was split off from Western province, and Rennell and Bellona was split off from Central province, resulting in the current local government structure of nine provinces and the Honiara City Council. The legal framework for local government has also undergone a series of transformations resulting in the Provincial Government Act 1997 . Rural development is a recurring domestic political issue and most recently has been dominated by debate on a new Constitution to introduce federal system with three tiers of government: federal, state and community with the latter formalising traditional systems of government. It is unlikely that the government will have a draft of the proposed Federal Constitution ready before Parliament is dissolved in April 2010 – the next national election is due between April and August 2010. Although there is not a consensus on moving to a federal model of government, it is widely understood that the existing provincial administrations have little or no means to deliver the small number of services which have been devolved to them. Provincial budgets are generally expended on payroll and there is limited capacity to deliver services. The country is divided into 10 administrative areas. Nine are provinces (Central, Choiseul, Guadalcanal, Isabel, Makira-Ulawa, Malaita, Rennell and Bellona, Temotu, Western) administered by elected provincial assemblies. The 10th is the town of Honiara, administered by the Honiara Town Council.Outer Islands Local Government Act 1987 and the and Palmerston Island Local Government Act 1993 for administrative purposes. A mayor heads each island council.
Judiciary	The Court of Appeal is currently presided over by Lord Slynn of Hadley (UK) and draws on a panel of judges from the Commonwealth. The Governor General appoints the Chief Justice, President of the Court of Appeal and other judges of the High Court on the advice of the Judicial and Legal Service Commission. Magistrate courts handle most routine legal matters based on British common law. Local courts hear civil and criminal matters in which all parties are resident or within the area of the jurisdiction of the court. The Customary Land Appeal Court deals with customary land appeals.
International Organisations	ACP, ADB, AOSIS, C, ESCAP, FAO, G-77, IBRD, ICAO, ICCt (signatory), ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, IOC, ITU, MIGA, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, UPU, WHO, WMO, WTO

SUMMARY OF THE SOLOMONS ISLANDS BUDGET PROCESS

Step 1: Call for ministerial funding submissions	The budget cycle is usually started around April, when each line ministry prepares submissions for funding proposals and staff requirements for both the recurrent budget and the development budget. The recurrent budget unit is housed in Ministry of Finance and Treasury. The development budget unit is housed in Ministry of Development Planning and Aid Coordination (MDPAC). Funding submissions are assessed against the national development priorities and medium term strategic framework.
Step 2: Budget formulation	Both the recurrent budget and development budget are refined in the Ministry of Finance and Treasury in consultation with the line ministries before being sent to cabinet. The Minister of Finance and Treasury presents the recurrent budget and the Minister of Development Planning & Aid Coordination presents the development budget to Cabinet.
Step 3: Cabinet Approval	The Cabinet meets 2-3 times to consider the recurrent and development estimates. During this time each minister presents the ministerial case to support the funding submission. Finally Cabinet agrees upon these budgets. Once approved by Cabinet the budget is sent to the Public Accounts Committee.
Step 4: Parliament approval	The draft budget is considered by the Public Accounts Committee (usually over 2 weeks) which then sends its report and the budget to parliament to be debated. The budgets are tabled in parliament in the form of an Appropriations Bill for consideration and passing. When the budget is approved (the appropriation bill is passed into law) Minister of Finance and Treasury issues a general warrant, which gives authority to use the budget.
Step 5: Implementation	Once each line ministry receives their general warrant they can raise cheques through treasury. There is often a significant use of virements (transfer of funds within a ministerial budget) which offers a measure of flexibility for managers to reflect budget variances throughout the year. Additionally, a certain amount is usually set aside by Cabinet in contingency warrants to cover unforeseen circumstances.

The government’s Medium-Term Development Strategy 2008–2010 identifies the need to ensure that the role of chiefs is strengthened, recognised and respected. There are no provisions in the Constitution or legislation pertaining to the role of traditional leaders or chiefs. 

The relative absence of official government representation outside of Honiara has given rise to many ‘informal’ systems of governance based on village, church and family systems. There is no uniform attachment of village community governance to the national systems nor is there any legislation or emplacement of village community governance in the national structure of government. Some provinces (for example Isabel Province) include a village community leadership structure in which church, chiefs and women are involved in decision making. In others traditional chiefs maintain authority. Many villages, however, no longer have chiefs and are organised by elders selected by village opinion leaders. Churches in particular take on some service delivery functions through schools, training centres, health clinics and support services to women and youth. Kinship or ‘wantok’ networks and obligations have a profound impact on local political activity and governance and are fundamental to the identity of most Solomon Islanders. While largely unfamiliar outside Melanesia, these village based systems enjoy popular legitimacy and are relatively effective in maintaining social cohesion.

GNI per person 2007 (Atlas method)	US$750 [2]
GDP current (2009)	US$0.668b [3]
GDP per capita 2009	US$1,244 [3]

Labour market‚ Formal sector (1999)

Number of employees	57,472 [4]
% of workforce	– [4]
% Female	31% [4]
% Public sector	– [4]
Private sector	– [4]

The civil unrest between 1997 and 2003 severely damaged the Solomon Islands economy. The main cause of the economic decline was the destruction of the largest income earning activities (logging, palm oil, gold, fish processing and tourism). There was also extensive damage to personal property, transport infrastructure, schools, water supply and sanitation systems, government buildings and the health sector. Since 2003, the government has embarked on a number of reforms to improve economic management as well as industry reforms in tourism, agriculture and fisheries to counter the anticipated decline in the logging sector. Estimates vary, but present rates of logging look likely to exhaust commercially viable forest resources by 2013, mainly due to unsustainable logging practices. There will be a significant reduction in government revenue as a result as it currently duties on export round logs account for around 17% of revenue. The economy picked up after the RAMSI intervention in 2003 (see chart 3 opposite) peaking at 10.7% in 2007, and then slowing dramatically in 2009 largely due to weakened external demand, reduced log production and commodity prices, lower agricultural output due to floods in the first quarter of 2009 and slow growth in other sectors, including public administration, as government revenue became constrained. The growth outlook for 2010 is expected to recover moderately, with the real growth rate expected to be around 2 per cent. The slight pick-up in growth is primarily due to an anticipated recovery in global activity, particularly among the country’s Asian trading partners. However, the expected continuation of depressed commodity prices and the continuing fall in log production will continue to restrain growth. This concerning outlook necessitates the continuation of the economic reform agenda across the economy.

Telephone	Mobile services provided by Our Telekom and B-Mobile.
Internet	10,000 users as at September 2010 [6]. 13,980 Facebook users (2.35% population)[7].
Newspapers	One daily newspaper Solomon Star and two weekly newspapers, Island Sun and National Express.
Television	Four channels – one religious/sport and 3 licenses held by Solomon Telekom, two of which relay ABC and BBC and one programmed by private company One News Ltd.
Radio	Solomon Islands Broadcasting Corporation (SIBC) is the national broadcaster. Government owned FM station (Wantok) and the 9 community FM stations.

Total land area spread over 29 atolls	2,934km2 [1] spread over 29 atolls and 5 islands
Exclusive economic zone (EEZ) area	120,0002 [1]

Population 2010 estimate	187,032 [2]
Average annual growth rate 2001-06	0.5% [2]
Population density	64.2/km2
Women in parliament	4 out of 47 seats
Human Development Index score	0.771[6]

The Samoan model of parliamentary republic is a blend of selected elements of traditional socio-political practices and the Westminster system. The political landscape has been largely stable since independence, when two of Samoa’s highest- ranking paramount chiefs were jointly appointed head of state (O le Ao o le Malo) for life. Tupua Tamasese Mea’ole died in 1963, leaving Malietoa Tanumafili II sole head of state until his death on 11 May 2007. The current O le Ao o le Malo, Tu Atua Tupua Tamasese Efi, was the only nomination to succeed Malietoa Tanumafili II and was unanimously elected head of state by the Parliament on 17 June 2007. With the exception of two ‘non-Samoan’ MPs, only a matai (chief) is eligible to seek parliamentary office. The Human Rights Protection Party (founded in 1979) has governed the country since first winning power in 1982, except for a brief period in 1986 and 1987 when internal differences forced them into coalition. The party holds 35 of the 49 seats in the current parliament. Samoa’s parliament does not have a formal opposition. Independent State of Samoa (formerly known as Western Samoa to 1997). Samoa is an independent parliamentary democracy with a 49 member unicameral parliament (Fono) elected for 5 year terms. 47 are matai (leaders of extended families with chiefly affiliation) and elected from territorial constituencies by ethnic Samoans. The other 2 are elected by and represent ‘non-Samoans’ under a separate electoral roll (the Individual Voters Roll). Independence from New Zealand in 1962.

Head of State	His Highness Tui Atua Tupua Tamasese Efi (since 20 June 2007) . The O le Ao o le Malo (head of state) is elected by the parliament (Fono) for a period of five years and can be re-elected. The position of O le Ao o le Malo is that of a ceremonial president.
Head of Government	Prime Minister Sailele Malielegaoi Tuilaepa has held office since 1998 (last general election was 31 March 2006). The prime minister is elected by a majority vote in the parliament (Fono).
Executive	The prime minister’s choices for the 12 cabinet positions are appointed by the head of state, subject to the continuing confidence of the Fono. There are 13 government ministries: – Ministry of Prime Minister and Cabinet – Ministry of Agriculture and Fisheries – Ministry of Commerce, Industry and Labour – Ministry of Communication and Information Technology – Ministry of Education, Sports and Culture – Ministry of Foreign Affairs and Trade – Ministry of Justice, and Courts Administration – Ministry of Natural Resources and Environment – Ministry of Finance – Ministry of Health – Ministry of Revenue – Ministry of Women, Community and Social Development – Ministry of Works, Transport and Infrastructure.
Civil Service	Samoa has embarked on a number of public service reform programs that started in 1997 in an attempt to improve the operation of government and service delivery. The introduction of output budgeting, a greater emphasis on strategic planning, the refinement of accounting systems, the provision of increased autonomy for line agencies, and a privatisation and corporatisation program have seen modern public-sector management practices pursued. Substantial improvements have been made in a relatively short period and further initiatives are being introduced. The introduction of competition and reform in the aviation and telecommunications sectors have improved service coverage and quality and reduced costs. Ongoing reform is a key priority for government, but there are concerns about a slowing of the reform agenda, as well as the challenges of implementation for the public sector. High turn over of staff is of particular concern and necessitates ongoing and targeted training and capacity building program. The Strategy for Professional Development in the Samoa Public Service 2003-2008 and the Samoa In Country Training Program (SICTP – a facility jointly funded by Australia and New Zealand) are designed to provide practical skills training for the public service (including state owned enterprises). From 1997-2006, the Public Service Commission (PSC) was the counterpart organisation for the SICTP and identified the training needs, which were coordinated through a New Zealand based management contractor. Since 2006 the Oloamanu Professional Development Centre (OPDC) of the National University of Samoa (NUS) has taken over coordination of the SICTP. The PSC assumes a less direct role in recruitment, HR management and training and provides policy advice and technical assistance to departments and line agencies. The human resource strengthening programs have provided a framework to support the overall public sector reform agenda, particularly in relation to supporting the devolution of human resource management functions from the PSC to line agencies. Central to the PSC’s new strategic role is the function of the Performance Development Division that manages the support to ministries in developing capability plans and leadership development programs.
Local Government	Samoa is divided into eleven administrative districts (itumalo); five of which are based on Upolu-A’ana, Aiga-i-le-Tai (with Manono and Apolima islands), Atua, Tuamasaga, and Va’a-o-Fonoti; and six on Sava’i-Fa’asaleleaga, Gaga’emauga, Gaga’ifomauga, Palauli, Satupa’itea, and Vaisigano. These administrative districts date back before European arrival, and each has its own constitutional foundation (fa’ave) based on the traditional order of title found in each district’s faalupega (traditional salutations). The capital village of each district administers and coordinates the affairs of the district and confers each district’s paramount title, amongst other responsibilities. The extended family (the aiga) is the foundation of the fa’a Samoa (traditional way of life). The head of each aiga is the matai (chief), who is elected by family members. Traditionally, the family matai is responsible for maintaining the family’s dignity and well being by administrating family affairs. More than 80 per cent of the population lives under the matai system. Particularly strong in the rural areas and at village level, it functions as a safety net in providing social and financial security. Each of Samoa’s several thousand aiga designates at least one matai to lead and represent it; the matai, in turn, form village councils to administer local affairs. The church and the Fale Fono, the village council of chiefs, are the central structures in each village. The settlement along the coastal areas of Samoa allows for potentially greater accessibility to services. However, urban migration exacerbates the diminishing agriculture and fishery industry in rural areas and depletes human resources for service delivery. Samoa’s susceptibility to cyclones and other natural disasters raises the importance of developing well- planned mechanisms for disaster preparedness.
Judiciary	The Constitution provides for a Supreme Court, with a Chief Justice appointed by the Head of State on the advice of the Prime Minister; other judges are appointed by the Head of State acting on the advice of the Judicial Service Commission. Court of Appeal – the superior court of record comprising the Chief Justice and other judges of the Supreme Court and such other persons as are appointed by the Head of State, acting on the advice of the Judicial Service Commission. Magistrate’s Courts can be constituted by magistrates or by Fa’amasino Fesoasoani (assistant magistrate), on the appointment of the Head of State acting on the advice of the Judicial Service Commission. Regarding land, the decisions of the Village Fonos (see Traditional Government box above) may be challenged in the Land & Titles Court. Decisions of the Land & Titles Court may be reviewed by the Supreme Court.
International Organisations	AACP, ADB, C, FAO, G-77, IBRD, ICAO, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IPU, ITU, ITUC, MIGA, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WHO, WIPO, WMO, WTO (observer).

The national strategic planning document, the Strategy for the Development of Samoa (SDS), 2008–2012: Ensuring Sustainable Economic and Social Progress, sets the country’s seven national development goals: sustained macroeconomic stability; private sector led economic growth and employment creation; improved education outcomes; improved health outcomes; community development: improved economic and social wellbeing and improved village governance; improved governance; and environmental sustainability and disaster risk reduction. The SDS reflects a continuation of the government’s reform programs. The period between 1997 and 2001 saw a significant restructure of the civil service. Reforming state owned enterprises (SOE) has also been an ongoing priority since 2003, with the government divesting or restructuring over half of its enterprise portfolio. A notable example was the 2006 joint venture between the loss-making national airline (Air Polynesia) and Virgin Blue (creating Polynesian Blue) to operate international flights. Recently, the government appointed an advisory consortium to assist with the privatisation of Samoa Tel. The government has pursued economic reforms with mixed results. The government still plays a substantial role in the economy, with the public sector accounting for more than 40 per cent of the economy and crowding out private investment in some sectors. How the economy rebounds from the shocks of the 2008 global economic crisis and the 2009 tsunami will be dependent on consolidating gains achieved through the telecommunications and airline reforms, encouragement of investment and continued fiscal discipline. Overall economic reporting by the Ministry of Finance is generally regarded to be of a high order as evidenced through the standard of the budget material and the quarterly updates. In 2005 the government adopted ‘Finance One’ as its financial management information system (FMIS), located within the Ministry of Finance and networked access by line ministries. However many line ministries have continued to rely on spreadsheets and manual systems for financial monitoring and reporting. Improving the use of the central FMIS will assist with accounting reports and regular monitoring of financial statements (revenues, expenditures and cash management). Each ministry has a strategic annual management plan, which should be reflected in the annual budget submissions. The budget system is generally considered very credible in terms of the overall revenue and expenditure projections, but falls short in terms of planned ministerial allocations and revenue collection. Often budget allocations to key sectors (such as health and education) are insufficient to meet service requirements and require transfers from smaller ministries throughout the year. The Ministry of Revenue generally collects its budget estimates, however other line ministries often fail to collect forecast income. A Tenders Board oversees procurement regulations and procedures for amounts between ST$100,000 and ST$500,000. For amounts in excess of that a cabinet decision is required.

Samoa Public Service Commission Performance Management System^[7]

Strategy for the Development of Samoa 2008-12	Sector plans for each of the 15 sectors – Economic: Agriculture, Manufacturing, Tourism, Finance. – Social: Education – Health – Law and justice – Community development – Public administration. – Infrastructure: Construction – Electricity – Water – Transport – Communications.
Ministry Corporate Plans (may have links to more than one sector plan)	Service Charters and Capability Plans.
Ministry Strategic: Management Plan	Ministry Budget, National Budget and Development Outcomes.

The traditional institution of the matai (chiefs) continues to play a pivotal role in governance at the local and national level. In determining leadership, the fa’a Samoa (Samoan way) and the fa’amatai (way of the chiefs) are the most influential factors. Weaving these traditional systems, coupled with a strong social system based on village communities and extended family, into a modern parliamentary democracy appears to have contributed to Samoa’s political stability and the maintenance of peace. Yet this has not prevented Samoa from experiencing governance problems found in other countries of the Pacific, including: misunderstanding, frustration, alienation, migration, discrimination, malpractice, patronage, and violence. Many Samoans who are resident abroad continue to honour their ‘social obligations’ by sending significant amounts of money to their extended families and churches.

Telephone	Samoa has partly privatised with the introduction of private sector involvement in the operation of a restricted cellular phone service by Telecom Samoa Cellular Company Limited a joint venture between the Government of Samoa holding 10% and Telecom New Zealand Limited holding 90% of shares. The provision of internet services is fully privatised with two service providers serving the market.
Internet	219,998 users as of September 2010 [8]. 6320 Facebook users (2.87% population) [9].
Newspapers	2 daily newspapers – Samoa Observer and the Samoa Times; 1 weekly – Le Samoa and 1 fortnightly – Savali.
Television	Samoa Broadcasting Corporation (state TV). 2 private run TV stations.
Radio	Samoa Broadcasting Corporation (state radio) and 3 commercial FM radio stations.

Samoa has no formal defense structure or regular armed forces; informal defense ties exist with New Zealand, which is required to consider any Samoan request for assistance under the 1962 Treaty of Friendship.The Village Fono Act 1990 vests the enforcement of rules and security within individual villages in the Fale Fono (council of chiefs), which settles most internal disputes. Judgments by the fono usually involve fines or, more rarely, banishment from the village. Critics of the Act point to potential conflict with national law enforcement structures (e.g. matai resisting police intervention in village affairs).

Donor coordination in Samoa is facilitated through the Aid Coordination and Loan Management Division (ACLMD) of the Ministry of Finance across all sectors and has generally been efficient in managing the large amount of external assistance. The Public Sector Improvement Facility (PSIF) is managed by the Ministry of the Prime Minister & Cabinet and supported by the governments of Australia and New Zealand. The reform programme seeks to: improve public finance management, including revenue institutional strengthening and on-going strengthening of the Government of Samoa’s finance and procurement systems, guided by common donor-government analysis priorities through the Public Expenditure and Financial Accountability Assessment; strengthen statistics and data on development and governance indicators, including drawing on resources of regional organisations and other donors; and build public sector capacity to meet executive and personnel training and development requirements.

Total land area	462,000km2 [1]
Exclusive economic zone (EEZ) area	3.1m2 [1]

Resident population (2008 estimate)	6,468,405 [2]
2015 forecast	7,490,303 [2]
Average annual growth rate 2004-10	2.4% [3]
Population density 2008	14/km2
Women in parliament	1
Human Development Index – HDI score (estimate)	0.541[6]

Papua New Guinea has a long and prescriptive Constitution, provision for a number of constitutionally mandated bodies and office-holders, and a large number of entrenched Organic Laws. Organic Laws can only be amended by successive special majority votes of Parliament. Many legal practices and structures have been inherited from Australia, though many have been simplified and PNG is adapting many practices to its own context. The judicial arm is considered to be the best performing constitutional organ. It has developed a solid body of jurisprudence and demonstrated a good degree of independence, though it faces administrative and case management challenges. The legal framework has to be placed within context. The indigenous population of Papua New Guinea is one of the most heterogeneous in the world. PNG has several thousand distinct communities, most with only a few hundred people, divided by language, customs, and tradition, and some of these communities have engaged in low-scale tribal conflict with their neighbours for millennia. As a result, enforcing a formal legal framework at the sub- national or rural level represents an extreme challenge to the authorities. The Independent State of Papua New Guinea (PNG) is a constitutional monarchy with a Westminster-style parliamentary democracy political system. There is a unicameral national parliament that has 109 seats, of which 20 are occupied by the governors of the 19 provinces and the National Capital District (NCD). Members of parliament are elected by the people every five years. Electoral reforms in 2001 introduced a limited preferential vote system (LPV). The 2007 general election was the first to be conducted using LPV. Papua New Guinea gained independence from Australia on 16 September 1975.

Head of State	Her Majesty Queen Elizabeth II represented by His Excellency Sir Paulias Matane, Governor General (since 29 June 2004). The Governor General is appointed by the monarch on the advice of parliament for a six year term.
Head of Government	Prime Minister The Rt Hon Grand Chief Sir Michael Somare (since 5 August 2002 – reelected 13 August 2007). Sir Michael was also the country’s first prime minister. The prime minister is elected by a majority vote in the parliament for a term of five years.
Executive	The executive consists of the president as chief executive and the vice president, a council of chiefs and a cabinet of ministers. The Council of Chiefs is composed of one traditional leader from each of the republic’s states. Cabinet ministers are appointed by the president with the advice and consent of the Senate. The vice president serves as one of the ministers. The ministries include: – Ministry of Finance – Ministry of Community & Cultural Affairs – Ministry of Education – Ministry of Health – Ministry of Justice – Ministry of Public Infrastructure, Industries and Commerce – Ministry of State – Ministry of Natural Resources, Environment and Tourism
Civil Services	The prime minister, elected by parliamentary vote, chooses the other members of the National Executive Council (NEC), which is PNG’s Cabinet. In practice the NEC dominates much of the decision-making and policy formulation.. Each ministry is headed by a cabinet member, who is assisted by a permanent secretary, a career public servant, who directs the staff of the ministry. Most secretaries and deputy secretaries are acting and therefore can be easily replaced. The capacity of the public sector to deliver quality public services remains limited. Since the late 1980s there have been at least four attempts to down size or ‘right-size’ the civil service; however, this has proven a difficult challenge at both the national and sub national level levels of government. The result has been low productivity and low levels of performance management as a few key officers undertake many of the jobs with the greatest level of responsibility. This also leads to a level ofdiscontinuity in policy design and implementation rendering capacity development largely unsustainable. Ageing workforce is a serious issue, especially in provinces, and limited intergenerational transfer of core public service skills is a concern. Most ministries, agencies and provinces have human resource management units to oversee personnel administration. There is an Institute for Public Administration, which has the mandate to train public servants, and there are plans to develop a School of Good Government and Administration with the Divine Word University.
Local Government	Power struggles have been ever present between national and provincial politicians, largely over the control of revenue flows and the competition for recognition as leaders from among people in the rural areas. Reforms in the mid 1990s through the Organic Law on Provincial Governments and Local-Level Governments (OLPGLLG) brought about a system of 19 provinces and National Capital District, with the Autonomous Region of Bougainville sitting outside this system. There are 294 local level governments, which are an administrative unit of a provincial government – they do not form a separate level of government. Provincial assemblies consist of the regional member of the national parliament (who usually assumes the position of provincial governor), open members of the national parliament, local-level government presidents and some appointed members. The OLPGLLG system essentially shifted some power back towards the national level given the governors are also national parliamentarians. This means that there are expectation for provinces to follow national priorities, although the OLPLLG also promotes the concept of bottom-up planning that promotes local priorities. Service delivery in PNG operates in a decentralized system. The national government has only a minimal service delivery presence in provinces, outside the law and justice sector where it is responsible for police, courts and prison services. Responsibility for majority of social services rests with provincial governments. The provincial government system was reaffirmed as part of the Vision 2050 exercise.
Judiciary	Papua New Guinea’s judiciary is independent of the government. It protects constitutional rights and interprets the laws. There are several levels, culminating in the Supreme Court of Papua New Guinea. The court system consists of the Supreme Court and the National Court. The Supreme Court is the highest, and decisions made by the panel of three or five judges are final. It has the jurisdiction to hear appeals and review decisions made by the National Court, give opinion or advice on whether a proposed parliamentary law is constitutional, develop rules of underlying law and enforce human rights. In the National Court decisions are made by one judge. The National Court unlimited jurisdiction and handles most legal cases. The Supreme Court Chief Justice and Chief Justice of the National Court are appointed by the Governor General on the proposal of the National Executive Council after consultation with the Minister responsible for justice. Other justices of the National Court, who are available to sit as members of ad hoc benches of the Supreme Court, are appointed by the Judicial and Legal Services Commission.
International Organisations	ACP, APEC, AsDB, ASEAN (observer), C, CP, ESCAP, FAO, G-77, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, Intelsat, IFRCS, IMO, ICRM, Interpol, IOC, IOM (observer), ISO (correspondent), ITU, NAM, OPCW, SPF, Sparteca, SPC, UNCTAD, UNESCO, UNIDO, UN, UPU, WFTU, WHO, WIPO, WMO, WTrO.

The Papua New Guinea Vision 2050 is a forty-year strategy for the human, economic, institutional, environmental and community development for the nation. Supporting this is Papua New Guinea Development Strategic Plan 2010-2030 (DSP). The interaction between the DSP and Vision 2050 is not yet clear, though the DSP introduces more specific economic and public policies and sector interventions. A further series of 5 year Medium Term Development Strategies (MTDS) lay beneath the Vision 2050 and the DSP. The intention is for overarching longer term plans to cascade-down into a series of detailed implementation plans. The major 5 year plan presently is the MTDS 2005-2010 and the Medium Term Expenditure Framework , which provide a framework to guide the government’s development expenditure and serves as a guide for resource allocation and mobilisation. The strategy is based on export-driven growth, rural development and poverty reduction by means of promoting good governance and promoting key industries in which PNG has a comparative advantage on a sustainable basis. The MTDS identifies seven expenditure priority areas (EPAs) to guide public expenditure: Transport rehabilitation and maintenance; promotion of income earning opportunities; primary and preventive health; basic education; HIV/AIDS prevention; law and justice; and development oriented adult education. The government has decided on a balanced budget for 2010 to provide a stable macroeconomic and fiscal environment. The main over arching frameworks for financial management are the Medium Term Fiscal Strategy, Medium Term Debt Strategy, the Medium Term Development Strategy, the Public Finances (Management) Act 1995 and the Fiscal Responsibility Act 2006. Despite these extensive planning documents, and also the development of medium term expenditure frameworks in a number of sectors, there is not always a link between the higher level plans and the sector level national budgets. Similarly, plans are very rarely are linked to budgets at the provincial level. Program budgeting has also been introduced in the past few years. Like many other jurisdictions this has occurred in a piece-meal fashion such that in some agencies of government, programs are still organisational units. PNG has a ‘split-system’ of budgeting where ‘development’ expenditure of a ‘project’ or capital nature is budgeted separately from recurrent spending. Much of the development budget is controlled through Department of National Planning and Monitoring while Treasury manages the recurrent and national salary budget. However, some revenues are practically-speaking ‘off-budget’ and/or outside the reach of macroeconomic policy, such as flows from resource projects, state- business enterprises or old unspent monies from Trust Accounts. The overall credibility of the budget can vary. Provincial governments budget a mixture of national Function Grants tied to a number of service delivery sectors and partly to a range of ‘Minimum Priority Activities’, and unconditional internal revenue (largely resource rent and GST receipts). A limited number of provinces have significant internal revenue but most do not receive sufficient national government recurrent transfers to meet service delivery costs. Provincial and District Treasuries are outposts of the national Department of Finance and form the main control over provincial expenditure. Provinces report quarterly to national level on financial performance. The second quarter is a key report.

Medium Term Resource Framework^[7]

The Medium Term Resource Framework (MTRF) is an expenditure tool to ensure that the Budget is aligned to the Medium Term Development Strategy (MTDS) 2005-2010 Expenditure Priority Areas (EPAs), that the sequencing principle is followed and that development partners funds are matched to Government’s priorities, and therefore to its own allocation pattern. The MTRF assists the Government in achieving and managing an increased allocation of development expenditure towards the country’s greatest priority needs by modelling the shape of future annual budgets and generating parameters which guide how appropriations can be best used.

The MTRF produces two important outputs:

• Funding Gaps, which provide a guide for the use of unallocated expenditure, based on a comparison of known future commitments to each EPA and the optimal affordable allocation to that EPA. These funding gaps refer to the total resource envelope – both GoPNG and donor – indicating the level of development expenditure that can be harnessed if GoPNG effectively coordinates all available funding. These funding gaps can assist donor expenditure planning (including the negotiation of new Country Strategies), improve coordination between different funding parties and serve as an early warning system for funding shortfalls.
• Indicative Sector Ceilings, which set parameters for the optimal allocation of GoPNG’s direct financing component of the Development Budget. Adherence to these parameters ensures that GoPNG meets its own target for the alignment of the Development Budget with the MTDS. Furthermore, the application of these ceilings provides a deliberate and rational shape to GoPNG spending patterns, avoiding a situation where individual items are deliberately funded but the overall picture is accidental or certain priority areas are neglected.

When the resource envelope is known in advance, the MTRF and its two outputs can play a valuable role in enhancing the quality of Development Budget appropriations. In 2010 efforts will be made to further integrate the central expenditure planning systems of the Recurrent and Development Budget to enable key service delivery agencies to better plan their sector expenditure.

Total land area	487km2 [1]
Exclusive economic zone (EEZ) area	600,900km2 [1]

Resident population (2008 estimate)	20,278 [2]
2015 forecast	21,168 [2]
Average annual growth rate 2008-15	0.6%
Population density	42/km2
Women in parliament	2 out of 13 seats (Senate), 0 out of 16 seats (House of Delegates)
Human Development Index – HDI score (estimate)	0.816[5]

Following the Second World War, Palau was administered by the United States as a United Nations Trust Territory. In 1979, the people of Palau voted against joining the Federated States of Micronesia because of language and cultural differences. After voting several times to reject a proposed Compact of Free Association with the United States, the country finally became self governing in free association with the United States in 1994. Palau adopted its Constitution on January 1, 1981. The Compact of Free Association between the United States and Palau is primarily focused on the issues of government relations, economic relations, and security and defence relations. The special relationship with the US gives Palau access to many US domestic programs, including disaster response and recovery and hazard mitigation programs under the Federal Emergency Management Agency, the National Weather Service, the United States Postal Service, Federal Aviation Administration. As citizens of an associated state, Palauans may live and work in the United States. The November 2008 congressional elections were held jointly with the presidential elections, as well as a referendum on proposed constitutional amendments. In the previous elections held in November 2004, Palauans also approved several constitutional amendments, including a three-term limit for members of congress, and the election of a presidential ticket composed of a president and vice president. Based on the recommendation of the Reapportionment Committee of July 2005, the statutory number of members of the Senate increased from nine to 13 starting from the 2008 elections. Forty three candidates, including a record seven women, ran for the Senate, and another 44 candidates, including three women, stood for election to the 16-member House of Delegates. Ms Kathy Kesolei and Ms Regina Mesebeluu became the first women senators in Palau. No women were elected to the House of Delegates. As there are no political parties in Palau, all candidates stood as non- partisans. Palau is a democratic republic in free association with the United States, with a bicameral National Congress or Olbiil Era Kelulau, consisting of the Senate (13 seats with members elected by popular vote on a population basis to serve four-year terms) and the House of Delegates (16 seats representing each of the states with members elected by popular vote to serve four-year terms). Independence was gained on 1 October 1994 from the United Nations Trust Territory.

Head of State and Government	President Johnson Toribiong (since 15 January 2009) is both head of state and head of the executive branch of government. The president is elected by popular vote, along with a vice president, every four years.
Executive	The executive consists of the president as chief executive and the vice president, a council of chiefs and a cabinet of ministers. The Council of Chiefs is composed of one traditional leader from each of the republic’s states. Cabinet ministers are appointed by the president with the advice and consent of the Senate. The vice president serves as one of the ministers. The ministries include: – Ministry of Finance – Ministry of Community & Cultural Affairs – Ministry of Education – Ministry of Health – Ministry of Justice – Ministry of Public Infrastructure, Industries and Commerce – Ministry of State – Ministry of Natural Resources, Environment and Tourism
Civil Service	The public sector altogether provides about one third of total formal employment. However, fiscal pressures and reform initiatives over the medium term may result in reductions-in-force in certain areas of the public service. The efficiency and effectiveness of government services is a key theme in the Medium Term Development Strategy (MTDS). The MTDS identifies a number of weaknesses in the current system and recommends strategies for improving services. One major issue is the widespread assumption that government should provide and subsidize as many services as possible for the welfare of the people, a major expression that emerged during a National-State leadership symposium in 2006. Other major issues include potential duplication of functions, conflicts of interest, spreading out of limited talents and capacity, planning and management weaknesses, and limited evaluation and assessment capabilities. The MTDS offers a range of strategies for addressing these weaknesses, including streamlining, exploration of more public-private partnerships, and outsourcing. One of the ultimate aims is to transform the role of government from one of ‘big brother’ to one of facilitator. The Bureau of Public Service System (BPSS) under the Ministry of Administration, is responsible for overall public service management. The BPSS is charged with carrying out the National Public Service System Act and the Public Service System Rules and Regulations.
Local Government	The Constitution designates the sixteen traditional municipalities of Palau as states with authority to formulate their own constitutional conventions and elect their respective legislatures and heads of government (governors). The state constitutions also defined the role of traditional leaders. Therefore, depending on the constitution of each of the sixteen states, they respectively have their own local government comprised of local legislators, governors, traditional chiefs, elders, and high ranking clans. The national government can delegate powers by law to the state governments and state governments have the ability (with consent from the Olbiil Era Kelulau) to impose taxes and borrow money to finance public programs or to settle public debt. Improving national-state working relations and the effectiveness of state governments are priority issues for Palau. A national-state leadership symposium in 2006 raised a number of matters that have been incorporated into the current medium term development strategy. States are recognised as having distinct roles to play, for instance in land use planning, zoning and building codes, in shaping national policies and plans, in attracting investment and development projects, and in improving performance across the public sector and in public enterprises. However, a number of real constraints exist (especially for the states other than Koror), including limited planning and management capacity, limited local revenue and resources, and weak institutional and human resource capacity. Limited national-state cooperation on economic development issues has been identified as another major challenge. The majority of the population (77%) lives in urban areas: Koror is the largest, followed by Airai and Hatohobei the smallest. The rest of the population (23%) is evenly spread throughout the remaining 13 states.
Local Government	Bureau of Public Serivce Systems Bureau of Public Safety Office of the Ombudsman
Judiciary	The judicial system consists of the Supreme Court, the Court of Common Pleas, and the Land Court. The Supreme Court has trial and appellate divisions and is composed of a Chief Justice and not less than three (3) nor more than six (6) Associate Justices, all of whom shall be members of both divisions. All appeals are to be heard by at least three justices. Matters before the trial division may be heard by one justice. No justice may hear or decide an appeal of a matter heard by him in the trial division. Judges are appointed to life terms by the President with approval from Palau’s National Congress.
International Organisations	ACP, ADB, AOSIS, FAO, IAEA, IBRD, ICAO, ICRM, IDA, IFC, IMF, IOC, IPU, MIGA, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, WHO.

Palau’s National Master Development Plan 2020 (NMDP) articulates the country’s overarching development strategies. The NMDP aims to transform Palau’s economy to one that is more private sector driven, to strengthen and streamline government institutions and activities, and to pursue strategies to help finance development goals. While the NMDP, adopted in 1996, is still considered the underlying framework for development, Palau has also recently prepared a medium term development strategy (MTDS) – Actions for Palau’s Future, The Medium-Term Development Strategy 2009–2014 -that articulates three thematic priorities: paying the ‘right price’ (an emphasis on cost recovery and well defined, targeted, transparent subsidies); reducing costs and ensuring conservation; and generating income opportunities. The preparation of the MTDS included three years of public consultations and leadership conferences, although it has yet to be officially adopted by the government. While Palau performs relatively well across a range of public financial and economic management indicators, recent developments signal emerging challenges over the medium term, especially as Palau adjusts to new financial arrangements under its renegotiated economic program under the Compact with the United States. Palau’s stable economy and relatively well run services have helped it achieve the highest human development levels in the Pacific. Nevertheless, it faces its own set of challenges that require continued reform commitment and action, especially if the effectiveness and efficiency of the public sector is to improve and meet expectations. Palau’s public financial management system and broader economy are heavily influenced by the Compact of Free Association with the US and its provisions. Financial health and performance has generally been stable, although in the 2008 financial year, expenditure exceeded revenue, raising some concern on the country’s fiscal position. The government has made a number of commitments to strengthen fiscal and financial policy and management, including moving towards a medium-term budget framework. In 2008 a Medium Term Fiscal Strategy (MTFS) was presented to the government leadership but has yet to be adopted. The MTFS promotes greater fiscal self-reliance and calls for tax reforms, expenditure compression, and efficiency improvements. Grants, primarily from the US through the Compact, have consistently made up over 50 percent of total government revenues. The government has also tended to supplement revenue with annual withdrawals of US$5m from its Compact Trust Fund, the current balance of which is approximately US$170 million. In early 2010, Palau and the US reached a tentative agreement (yet to be approved by the US congress) on a new economic assistance program that will provide Palau with US$13.5 million annually through to 2023. The transition to the new program will likely require considerable, but manageable, fiscal adjustment. Coupled with stagnant revenue trends and expenditure pressure, the government may need to consider strong expenditure controls and revenue raising measures over the medium term. Electricity and water services are highly subsidised. The issue of subsidies and the performance of public enterprises and utilities are a medium term reform priority with corporatisation and privatisation to be considered under the Medium Term Development Strategy. Country performance ratings for debt policy and management exceed regional averages. Total external debt as of 2008 was around 14 percent of GDP, one of the lowest in the Pacific region. Some public enterprises do, however, carry significant liabilities.

Palau Medium Term Development Strategy 2009-14^[6]

Overall goal

A sustained and widespread improvement in general standards of living while preserving cultural and environmental values for the people of Palau.

Strategic priorities

Preserving key values and advantages which are: The environment, cultural values, political stability, public security and civil order, effective relationships with development partners. Achieving consensus for change through transparency and opportunities for consultation. Addressing binding constraints to economic development which are: – The expectation that someone else should pay for a wide array of government, reflected in a ‘lack of willingness to pay, work productively and support effective policies’. – Conflicts of interest that make it difficult to gain acceptance for and to implement effective governance arrangements and policies for the benefit of the community as a whole.

Overarching strategies

There are three overarching (or thematic) strategies that cut across sectors and issues and that encapsulate a wide range of more specific strategies and actions, as follows: 1. Paying the right price (cost recovery and well defined, targeted, transparent subsidies). 2. Reducing costs and ensuring conservation. 3. Generating income opportunities.

Expected Outcomes

The expected outcomes from effective implementation of actions for Palau’s future essentially related to the various dimensions in which progress is made in terms of the overall goal for sustainable national development. Key elements include: 1. Improvements in general standards of living. 2. Private sector development. 3. Greater self reliance. 4. Preservation of culture and the environment. 5. Social and political stability. 6. Looking after the vulnerable.

GNI per person 2007 (Atlas method)	US$8,270 [2]
GDP current 2009 estimate	US$178.4m [3]
GDP per capita 2009 estimate	US$8,941 [3]

Labour market‚ Formal sector (2005)

Number of employees	9,777 [4]
% Female	39% [4]
% Public sector	35% [4]
% Private sector	65% [4]

Palau laws provide for freedom of speech, freedom of the press, and freedom of assembly and association and the government upholds these rights in practice.

Telephone
Internet	5,400 users as of December 2007 [7].
Newspapers	Tia Belau- English-language weekly, Palau Horizon- English-language twice weekly and Roureor Belau- English twice weekly.
Television	There are two private TV broadcasting companies (MBTV &OTV) with locally produced shows (mostly news coverage) airing on PNCC. Most households have cable TV, which rebroadcasts US and satellite TV channels.
Radio	Two private FM stations and one government controlled station on AM and FM.

Palau maintains a national police force, including a sea patrol operation, but maintains no regular military forces. Under the Compact, defence is the responsibility of the US. Moreover, the Compact grants the US military access to the islands for 50 years, although it has not yet exercised this option. Surveillance and monitoring exercises, including Australian and New Zealand coast guards, are occasionally conducted in Palau and the surrounding region. Palau has provided police officers to work as part of the Regional Assistance Mission to Solomon Islands since May 2006, and also sends police officers to UN peacekeeping missions. There is a small police force under civilian control. There are no armed forces. Under the Compact, defence is the responsibility of the United States.

Official transfers account for just over half the national budget. The United States is the major aid donor to Palau under the terms of the Compact of Free Association. US aid to Palau has included direct budgetary assistance to the Palau national government, including investment in a trust fund intended to provide $15 million annually from 2010 through 2044; federal postal, weather, and aviation services; and construction of a major road. US assistance to Palau has also included discretionary federal programs, such as health, education, and infrastructure services, that are not provided for in the compact. Other donors and development partners include Japan, Taiwan, Australia, New Zealand, European Union. Australian bilateral development assistance to Palau is modest – approximately AUD$150,000 in 2008-09. Education is a priority of the Australian program, which concentrates on scholarships and a small grants scheme supporting community organisations. Australia also provides ongoing funding for the Pacific Patrol Boat Program and its regional development program also supports Palau across a range of areas including: health (HIV/AIDS, non-communicable diseases) land, energy efficiency, environment, gender equity and governance. Palau also works closely with a range of regional and international organisations, including a United Nations joint presence (UNDP, UNICEF and UNFPA), the Asian Development Bank, World Bank, and International Monetary Fund. Recent and ongoing public sector related projects include implementing the Medium-Term Budget Framework and development of a Sustainable Health Financing Scheme by the Asian Development Bank. 

Total land area	259km2 [1]
Exclusive economic zone (EEZ) area	390,000km2 [1]

Resident population (2006 census)	1,679 [2]
2010 estimate	1,496 [2]
Average annual growth rate 2001-06	-1.9% [2]
Population density (2006)	6.4/km2
Women in parliament	1
Human Development Index – HDI score (estimate)	0.823[4]

Niue has been self-governing in free association with New Zealand since 1974. The New Zealand Government, in consultation with Niue, retains some responsibility for external affairs, including defence. People from Niue are citizens of New Zealand. Niue has assumed greater responsibility for its own foreign affairs since 1994, and has begun to establish formal diplomatic relations with sovereign states. Niue is recognised as a ‘non-member state’ by the United Nations implying recognition of full treaty-making capacity. It is also a full member of the Pacific Islands Forum. Politics of Niue takes place in a framework of a parliamentary representative democracy, where the premier is the head of government. The Constitution vests executive authority in the Crown – Her Majesty Queen Elizabeth II, and specifies that in everyday practice this authority is exercised by the premier of Niue and a cabinet of three other ministers. The premier and ministers must be members of the Niue Legislative Assembly (Fono Ekepule), the nation’s legislature. The assembly consists of 20 democratically elected members, 14 of whom are elected by the electors of each village constituency, six by all registered voters in all constituencies. The members of the legislative assembly elect a speaker who then calls for nominations for premier; the candidate with the most votes from the 20 members is elected to lead the government. The premier selects three other members to form a cabinet of ministers, the effective executive arm of government. The other two organs of government, following the Westminster model, are the legislative assembly and the judiciary. The judiciary is independent of the executive and the legislature. General elections take place every three years, most recently on 7 June 2008. Political parties do not play an important role in politics, and the current legislative assembly is made up of 6 non-partisan members (elected from a common roll) and 14 representatives of the villages. The Niue People’s Party, reported to be the only formal political party, was disbanded in 2003.Niue is self-governing in free association with New Zealand since 19 October 1974. It has a 20 member unicameral legislature (Niue Legislative Assembly – Fono Ekepule) elected by the people every three years.

Head of State	Her Majesty Queen Elizabeth II (as Queen in Right of New Zealand). The queen is represented by His Excellency HE Rt Hon Sir Anand Satyanand, Governor General of New Zealand (since 23 August 2006). The 1974 Constitution vests executive authority in the Crown, but allows for this to be carried out in practice by the premier and cabinet on behalf of the queen.
Head of Government	Hon Toke Tufukia Talagi MP is the premier of Niue (since 18 June 2008). The premier is elected by the members of the legislative assembly.
Executive	Cabinet consists of the premier and three other members of the legislative assembly appointed as ministers by the premier. The cabinet ministers are responsible for the affairs of the 13 government departments and other state corporations and agencies. The 13 departments are: – Department of Administrative Service – Department of Agriculture, Forestry & Fisheries – Department of Community Affairs – Department of Education – Department of Environment & Biodiversity – Department of Health – Department of Justice, Lands & Survey – Department of Meteorology & Climate Change – Department of Police – Department of Premier – Department of Public Works – Department of Treasury – Department of Taoga Niue
Civil Service	Oversight of the 13 public service portfolios are distributed amongst the four cabinet ministers. Each minister is responsible for a number of departments, and also oversee state corporations and agencies. Department and agency heads through various line managers are responsible and accountable for daily affairs of their department. As of June 2006 there were 392 civil servants, excluding those working for state owned corporations. The total number of government employees (inclusive of public service, corporations, external and internal contracts and members of the legislative assembly) was 462 as of the end of June 2006 – in other words, approximately 27 per cent of the population were on the government payroll. The Constitution charges the Public Service Commission (PSC) to be the sole employing authority of Niue’s public servants. The PSC is responsible for providing general oversight and control of the public service recruitment, organisation and management. The secretary of government is the permanent head of the public service and the chief administrative officer of government. Departmental heads are accountable to the secretary of government through their respective ministers.
Local Government	Local governments are established under the provisions of the Village Council Act, 1967. Niue has 14 villages. Each village has a village council that elects its chairman. The village council serves a three year term. The villages also serve as electoral districts so that each village is also represented in the Niue Legislative Assembly. The capital, Alofi, consists of the villages of Alofi North (pop. 147) and Alofi South (pop. 434). It is located at the centre of Alofi Bay on the west coast of the island, close to the only break in the coral reef that surrounds the island. Following the cyclone in January 2004, many government buildings were relocated to less exposed site inland.
Judiciary	The chief justice of the High Court are appointed by the governor general, acting on the advice of the cabinet tendered by the premier. The other judges of the High Court are appointed by the governor general, acting on the advice of cabinet tendered by the chief justice and the justice minister.
International Organisations	ACP, AOSIS, FAO, IFAD, OPCW, PIF, SPARTECA, SPC, UNESCO, UPU, WHO, WMO.

GNI per person 2007 (Atlas method)	N/A [3]
GDP current (2006)	NZ$20.54m [2]
GDP per capita (2006)	NZ$12,158 [2]

Labour market‚ Formal sector (2000)

Number of employees	663 [2]
% of workforce	41% [2]
% Female	42% [2]
% Public sector	60% [2]
% Private sector	40% [2]

Niue was first settled by Polynesian sailors from Tonga around 900 AD. Further settlers arrived from Samoa around 1440 AD. Prior to the 18th century chiefs and family heads exercised authority. The power structure in Niue was based on performance of activities rather than birth. From the early 1700s onwards, a succession of putu-iki (kings) ruled the island. Christian missionaries from the London Missionary Society converted most of the population in the mid 1800s. Puni-mata Tui-toga, who reigned from 1875 to 1887, was the first Christian king of Niue. In 1887, King Fataaiki requested British protectorate status, although this was initially turned down. In 1900, in response to renewed requests, the island became a British protectorate, and the following year it was annexed to New Zealand. In Niue land is owned by line of descent (mangafaoa). Traditionally, land as a precious resource, was acquired by waging war. While Christianity put an end to wars, the land conflicts increased. A formal land registration system was put in place in 1969. Problems relating to the fragmentation of land titles and multiple ownership remain a source of conflict. High levels of outward migration to New Zealand result in absentee owners of land.

The majority of media in Niue is government owned and operated.

Telephone	Telephone services is provided by Telecom Niue, the sole provider.
Internet	1,100 users as of June 2010 [6].
Newspapers	Niue Star, Niue News (online news service) and Niue Economic Review are published weekly.
Television	Television Niue is government owned and operated by the Niue Broadcasting Corporation.
Radio	Radio Sunshine is government owned and operated by the Niue Broadcasting Corporation.

Niue is entirely responsible for its internal affairs. There is a police department headed by a chief of police. Section 6 of the Constitution provides for external defence of Niue to be the responsibility of New Zealand. By convention this responsibility would only be exercised at the request of the Niue Government. Surveillance flights of Niue’s EEZ are carried out by the Royal New Zealand Air Force. Members of the Niue police department have served in the Participating Police Force of the Solomon Islands under the Regional Assistance Mission to the Solomon Islands (RAMSI). There is no regular military force in Niue. Defence is the responsibility of New Zealand. There is a domestic police service, headed by the chief of police.

New Zealand is the largest bilateral donor to Niue. Other donors include Australia, China, France and various multilateral organisations. The total bilateral New Zealand Official Development Assistance to Niue for 2010/11 is NZD$18.72 million. The main focus of the programme is economic sustainability, principally through development of the tourism sector. Australia provides technical support to Niue in health (sanitation), energy and finance. In 2006 the governments of New Zealand, Australia and Niue established the Niue International Trust Fund. New Zealand is the main contributor to the fund, which now contains approximately NZD$41 million. The purpose of the fund is to lessen Niue’s dependence on external assistance to meet the demands of its core budget. It is not expected that revenue from the fund will be drawn down until 2014. Until then contributions will be made from time to time by New Zealand, Australia and other parties to continue building the fund’s resources. 

Total land area	21km2 [1]
Exclusive economic zone (EEZ) area	320,000km2 [1]

Resident population (2008 estimate)	9,570 [2]
Population forecast (2015)	11,006 [2]
Annual population growth rate (2008-15)	2.1%
Population density (2008)	456/km2
Women in parliament	0 out of 18 seats
Human Development Index score	0.647[5]

Nauru has a volatile political history, with over 36 changes of government since independence in 1968, with 17 changes of administration between 1989 and 2003. In 1997 there were four different presidents in as many months. Following seven years of discussion and negotiation, the country held its first ever constitutional referendum on 27 February 2010 in a bid to change the system and structures of government. Notably, the Constitution of Nauru (Referendum Amendments) Bill 2009 sought to change to a directly elected president (instead of one chosen by parliament), clarify the roles of the President and Cabinet and to provide stronger mechanisms for ensuring stability and continuity of government. In total there were 34 proposed changes to the Constitution with voters given the option of a ‘yes’ or ‘no’ vote for the entire package of changes. Voter turnout was reportedly high (78%) with the proposed amendments to the Constitution rejected by majority of almost two thirds. The Constitutional Review Committee (a Standing Committee of Parliament, which existed from December 2006 to February 2007 for the purpose of making recommendations regarding constitutional amendments) met following the referendum and resolved to conduct a survey to better understand the reasons for the failure of the referendum, and assess attempting a second referendum on some or all of the proposed referendum amendments. Not every change to the Constitution required approval by referendum. In August 2009 the parliament passed the Constitution of Nauru (Parliamentary Amendments) Act 2009 (which will not commence until amended, to remove cross-references to provisions that would have been in the Constitution had the referendum succeeded). The Act introduces a number of constitutional changes including: a Speaker of Parliament who is a non-member; the addition of an extra member of Parliament, making court appeals more accessible by removing the need for Nauru citizens to appeal decisions to the High Court of Australia; tightening accounting controls on public spending; the introduction of a code of leadership for MPs and public officials and the creation of an ombudsman’s office. The bill also contained provisions for a new public service commission, however this was removed by the Committee of the Whole and was not included in the approved Act.Nauru is an independent parliamentary representative democratic republic with an 18 member unicameral parliament. Independence was gained on 31 January 1968 from the Australia, New Zealand and British administered United Nations trusteeship.

Head of State and Government	Caretaker President – H.E. Hon. Marcus Stephen is both head of state and head of the executive branch of government. The president is elected by Parliament and serves a three year term, subject to retaining the confidence of the House. In practice, it has been rare for a President to serve a whole term of Parliament due to changes in government through motions of no confidence. The 18 members of parliament are elected for a maximum (not fixed) three year term in multi-seat constituencies. Each constituency returns two members to the parliament, except for Ubenide which returns four. Voting is compulsory for all citizens aged over 20 years. Following the national election held on 24 April 2010, the parliament was deadlocked with nine members on government and oppostion sides. A subsequent election held 19 June 2010 also returned a hung parliament. The caretaker president imposed a state of emergency while the country remains in political deadlock.
Executive	The Constitution specifies that the Cabinet is composed of the President, and a Deputy President and four or five other members of parliament appointed by the President. There are 13 government ministries split between the current 5 cabinet members: – Ministry of Home Affairs – Ministry of Nauru Phosphate Royalties Trust – Ministry of Police and Emergency Services – Ministry of Public Service – Ministry of Finance and Sustainable Development – Ministry of Foreign Affairs and Trade – Ministry of Education – Ministry of Fisheries – Ministry of Health – Ministry of Commerce, Industry and Environment – Ministry of Justice, Border Control and Correctional Services – Ministry of Sports – Ministry of Telecommunications – Ministry of Transport
Civil Service	The civil service currently employs an estimated 1,217 workers, approximately 40 percent of the formal workforce. Nauru’s financial collapse and subsequent reforms have resulted in a down-sizing of the civil service, which at one point had exceeded 3,000 workers. Since 2004, the government, with assistance from its donor partners, has been undertaking a range of reforms across the public service, including restructuring the Human Resource Department, revising salaries and enhancing performance monitoring measures. However, performance audits and evaluations remain uncommon in the public sector. The proposed introduction of a Public Service Commission in 2010 was intended to better coordinate the recruitment, monitoring and training of government officers in a bid to restore public trust in the civil service and machinery of government.
Local Government	Nauru lacks an urban space and has no official capital. Government offices are in Yaren District and the majority of the population live in small settlements around the narrow coastal strip. The Nauru Local Government Council (NLGC) was dissolved in 1992 and the Nauru Island Council (NIC) was a short-lived successor as an advisory body to the national government on local matters. The NIC no longer exists, and there is no formal system of local government. There are fourteen districts which are grouped into eight electoral constituencies. Most districts have elected community committees, but these are informal structures for local purposes (such as fund-raising, district clean-ups, vegetable growing etc.) and do not have any formal mechanism of liaison with government. Due to the small size of the country it is not surprising that decentralisation is not a significant element in ongoing reforms.
Judiciary	The Supreme Court of Nauru is the highest court on Nauru and is presided over by the Chief Justice of Nauru. Appeals against decisions of the Supreme Court can be brought before the High Court of Australia in all matters other than constitutional matters. The District Court is presided over by a Resident Magistrate, who is also the Registrar of the Supreme Court. The Family Court is also presided by the Resident Magistrate as Chairman of a three- member panel. There are two other quasi-courts established under the Constitution: The Public Service Appeal Board and the Police Appeal Board. Both are presided over by the Chief Justice of Nauru as the chairman of the panel with two members for each board. The Nauru Lands Committee also serves as a quasi-judicial body.
International Organisations	ACP, ADB, AOSIS, C, FAO, ICAO, ICCt, Interpol, IOC, ITU, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, UPU, WHO. Nauru became a member of the United Nations in 1999.

Nauru’s National Sustainable Development Strategy 2005-2025 (NSDS) serves as the country’s blueprint for reform, recovery and development as it endeavours to reform and rebuild its institutions and economy. The NSDS articulates five overarching goals, which are to establish a stable and fiscally responsible government; improve infrastructure and basic services; diversify and grow the economy; rehabilitate mined lands for livelihood sustainability; and improve domestic food production. A review of the NSDS in 2009 showed that while much progress has been made, many constraints prevail including the significant lack of capacity to implement reforms and meet the various onerous international legal obligations, as well as the substantial fiscal cost of maintaining basic services to the community. Strong and sustained commitment to reform will be essential, not only to restore the basic functionality of the public finance system and the broader public sector, but more importantly to strengthen the country’s accountability mechanisms and to restore its overall credibility. State owned enterprises (SOEs) continue to pose major systemic risk on a still- frail public finance system, both in terms of current subsidy requirements as well as contingent liability risk. Restructuring SOEs is an important strategic goal under the NSDS. Phosphate mining revenues fuelled a rapid fiscal and economic expansion from the late 1960s through the late 1980s. Portions of the windfalls were invested in a series of national trust funds whose collective market value had reached A$1.5 billion by 1990. For a period Nauru’s per capita income was amongst the highest in the world. However, investment losses, mismanagement and pervasive accountability weaknesses led to a rapid run-down in trust fund assets, which in turn precipitated one of the most rapid fiscal and economic collapses ever witnessed. While some reform progress has been made in recent times, public financial management remains a critical challenge. Strengthening the public financial management system is a core goal of the National Sustainable Development Strategy 2005-2025 (NSDS), and ongoing reforms aim to establish a stable, trustworthy, and fiscally responsible government. The government adopted a medium-term fiscal policy in 2004, which has helped improve budgetary planning and management. Nauru has also enacted specific legislation to abolish offshore banking, resulting in its removal from the Financial Action Task Force black list. Donor transfers, fisheries revenue, phosphate royalties and dividends, and sales of fuel products are the primary non-tax revenue sources (see Chart 2 opposite). Official transfers made up over 50 percent of total revenue over the 2009/10 period, with Australia the largest contributor. Australia injected an estimated A$23.4 million in total development assistance in 2009-10, much of which is channelled through Nauru government financial systems. Efforts are underway to grow revenue flows from secondary (“residual”) mining activity, which commenced in 2007. ADB reports that upwards of US$700 million worth of mining revenue may be available over the next 20 years, and is providing technical assistance to re-establish a national trust fund to be established at some point in the future. The government managed to achieve budget surpluses in five of the past six fiscal years, and budgeted a small surplus of A$50,000 in 2008/09. Nauru’s solvency position remains extremely weak. As of 2008 external and domestic debt estimates stood at A$370 and A$635 million respectively, giving Nauru one of the highest debt-to-GDP ratios in the world. The government has established a debt management strategy to deal with this staggering debt burden, initially concentrating on the external debts.

Vision

“Partnership for Quality of Life”

National Goals ^[6]

Stable, trustworthy, fiscally responsible government. Provision of enhanced social, infrastructure and utilities services. Development of an economy based on multiple sources of revenue. Rehabilitation of mined out lands for livelihood sustainability. Development of domestic food production.

Sector Goals, Strategies, Milestones, KPIs

Macroeconomic Framework and Fiscal Objectives

Annual Budget allocations

NPP/Project approval process for Aid donor funded programmes

Ministry/Department Operational Plans (reflecting budgetary allocations and donor projects)

Activities of Departments; Constitutional Bodies; SOEs, Civil Society, Communities

Development Outcomes – measured by Key Performance Indicators (KPIs)

GNI per person 2007 (Atlas method)	US$2,310 [2]
GDP current (2007 estimate)	US$19.2m [3]
GDP per capita (2007 estimate)	US$2,181 [3]

Labour market‚ Formal sector

Number of employees	2,603 [4]
% of workforce	79% [4]
% Female	45% [4]
% Public sector	42% [4]
% Private sector	58% [4]

Nauru was annexed by Germany in 1888 and its phosphate deposits began to be mined early in the 20th century by a German-British consortium. Nauru was occupied by Australian forces in World War I and subsequently became a League of Nations mandate. The Second World War had a major bearing on the history of Nauru. In 1942, the Japanese invaded, and deported approximately two-thirds of the population. After the war, Nauru became a UN trust territory until it achieved independence in 1968. Despite, or because of this chequered history, national identity remains very strong. All Nauruans are registered at birth under their mother’s clan. Failure to register a child as Nauruan eliminates that person from the entitlements of being Nauruan, particularly access to land rights, and to shares in phosphate revenue. All land in Nauru is held under traditional ownership. Even prior to the discovery and working of the phosphate deposits, ownership of land was an all important matter. Since the late 1920′s land ownership has been determined by the Nauru Lands Committee, although this body was only given legislative backing in 1956. The determination of land ownership before the creation of the committee was undertaken by the Chiefs whose decision could be appealed to the colonial Administrator. Today land is governed under the Lands Act 1976. Under the Customs and Adopted Laws Act, customary law is part of the law of Nauru, but is subordinate to legislation. Informal social control is still maintained within Nauruan families, but formal control rests with the Nauru police force and the judiciary.

There is no independent media in Nauru.

Telephone	The government is the regulator and was the provider of all telecom services in Nauru until mid-2009 when Digicel Nauru was awarded a licence to provide mobile services based on the GSM standard.
Internet	300 users as of Dec 2002 [7]. 120 Facebook users (0.86% population) [8].
Newspapers	The Government Information Office (part of the President’s Office) publishes the Nauru Bulletin fortnightly. Nauru Media publishes a monthly newspaper.
Television	NTV
Radio	Radio Nauru like NTV are run by Nauru Media, which is part of the Department of Home Affairs.

The Constitution and laws of Nauru do not establish a national defence force. Australia provides for the country’s defence under an informal arrangement. Nauru does maintain a small national police force (approximately 100 regular members and a ‘protection and guarding unti’ of 160 members who provide security for key government infrastructure and are available during emergencies). Regional cooperation efforts exist in monitoring and surveillance for fisheries, including assistance from Australia and New Zealand. Nauru has provided police officers to the Regional Assistance Mission to Solomon Islands since July 2003. The Australian Government provides support to the Nauru Police Force through the Australian Federal Police, and is supporting a review of the criminal code. The Government of New Zealand provides significant support to the judiciary and Ministry of Justice.

Official transfers from donors make up around 50 percent of the national budget, although some aid flows are not reflected in the budget. Nauru receives support from numerous donors and development partners, most prominently Australia, the Asian Development Bank, Japan, the European Union, Taiwan, New Zealand, United States, and regional and international organisations, including United Nations agencies. Ongoing programs support a wide range of governance and public sector reforms and capacity development. Australia’s ongoing development programs are the most extensive and are guided by the Nauru–Australia Partnership for Development. Under the partnership, Australia helps Nauru to progress various aspects of the NSDS with a particular focus on faster progress towards achieving the Millennium Development Goals.

Total land area	181km2 [1] spread over 29 atolls and 5 islands
Exclusive economic zone (EEZ) area	2.1m2 [1]

Resident population (2008 estimate)	53,033 [2]
2015 forecast	57,127 [3]
Average annual growth rate 2008-15	0.9%
Population density	293/km2
Women in parliament	1 out of 33 seats in the Nitijela and 3 out of 12 seats in the Council of Iroij
Human Development Index score	0.71605[4]

The Republic of the Marshall Islands is an independent country in a Compact of Free Association with the United States. Following the Second World War, the United States administered the Marshall Islands and other Micronesian countries under the 1947 Trusteeship Agreement with the United Nations. A bicameral Congress of Micronesia was established in 1964 of which the Marshall Islands was a part. In 1978 the Marshall Islands voted in a referendum to break away from the rest of Micronesia and instead opted for a separate Constitution, which was ratified in 1979. The country gained independence and commenced its free-association relationship with the United States in October 1986. RMI is a constitutional government with a blended parliamentary-presidential system. The 1979 Constitution makes provision for an advisory upper house – the Council of Iroij (or Council of Chiefs) – and a legislature – an elected lower house, the Nitijela. Executive power lies with the President, who is elected by the Nitijela from among its members, and the cabinet. The President, in turn, appoints cabinet ministers from the Nitijela. Legislative power resides in the Nitijela, which consists of 33 senators elected by 24 electoral districts by universal suffrage of all citizens above 18 years of age. While there are no formal political parties in the RMI, there are two political groupings, the Aelon Kein Ad (AKA) and the United Democratic Party (UDP). In October 2009, a motion of no confidence ousted President Litokwa Tomeing and Jurelang Zedkaia, a paramount chief for the capital atoll of Majuro, was elected president. This was the first time for a leader to lose a no-confidence vote in the 30-year history of constitutional government in the former US Trust territory. RMI operates under a mixed parliamentary- presidential system set out in its Constitution, which was adopted in 1979. The Nitijela (lower house parliament) comprises 33 members, elected every four years by universal suffrage. Every inhabited atoll is represented, with Majuro (5 members) and Kwajalein (3 members) having the largest representation. There is also an upper house – the Council of Iroij (chiefs). Independence from the UN Trust Territory (administered by the United States) on 21 October 1986.

Head of State and Government	President Jurelang Zedkaia since October 2009. The president is elected from the Nitijela to serve a four year term (subject to retaining the confidence of the Nitijela). The president appoints a cabinet from the members of the Nitijela.
Executive	The president selects a cabinet from members of the Nitijela. These are then appointed to the following ministries: Ministry of Education – Ministry of Finance – Ministry of Foreign Affairs – Ministry of Health – Ministry of Internal Affairs – Ministry of Justice – Ministry of Public Works – Ministry of Resources & Development – Ministry of Transportation & Communications
Civil Service	The civil service consists of nine major ministries and a number of public agencies. The ministries are: Finance, Education, Health, Foreign Affairs, Internal Affairs, Justice, Resources and Development, Public Works, and Transportation and Communication. The majority of governmental functions and services are provided by the national government. The civil service was dramatically curtailed during the late 1990s reforms, but from FY2000 to FY2008 it rebounded sharply, growing from just under 1,500 to around 2,400 and putting major strain on the national budget. Recent reform discussions have focused heavily on the size, cost and performance of the civil service, and recent analyses have identified a number of reform options, but a clear reform plan has yet to emerge. The Constitution bestows civil service management responsibilities upon the Public Service Commission and the Chief Secretary, who serves as the head of the civil service and who is a member of the Cabinet. The Constitution also provides for a Judicial Service Commission that consists of the following: the Chief Justice of the High Court, as chair; the Attorney-General; and a private citizen selected by the Cabinet. The JSC nominates to Cabinet for appointment judges for the Supreme Court, the High Court, and the Traditional Rights Court and appoints judges to the District Court and the Community Courts.
Local Government	While the national government plays a dominant role in the economic and political landscape, the 24 local governments continue to push for a greater share of national resources and more recognition and authority. Each of the 24 districts has a local government headed by a council and a mayor. Local governments are established through their own constitutions and are granted, through the national Constitution, law and policy making authority in their respective jurisdictions, including taxation authority. Ordinances proposed by local governments are reviewed by the Minister of Internal Affairs to ensure consistency with the national Constitution and laws. The Marshall Islands Mayors Association (MIMA) is the central vehicle through which local government policies and concerns are discussed. Decentralization and greater local government autonomy are active and lively topics in MIMA. Nevertheless, local government capacity remains a fundamental weakness. For example, a number of local governments are unable to properly account for resources granted to them through the national government and from donors. Local governments receive a relatively small portion of the financial and technical assistance flows received by the RMI and they claim that access to more financial and technical assistance will improve their accountability and overall governance capacities. Annual leadership conferences between national and local government leaders have discussed decentralisation matters extensively, but no clear plans have emerged.
Judiciary	The Supreme Court is the superior constitutional court of record having appellate jurisdiction. The High Court is a superior constitutional court of record having general jurisdiction. The District Court is a statutory court of record. It consists of a Presiding Judge and two Associate Judges. The District Court has original jurisdiction concurrently with the High Court. A Community Court is a statutory court of record for a local government area, of which there are 24. Each Community Court consists of a Presiding Judge and such number of Associate Judges, if any, as may be appointed. The Traditional Rights Court is a constitutional court of record consisting of three or more judges selected to include a fair representation of all classes of land rights: Iroijlaplap (high chief); where applicable, Iroijedrik (lower chief); Alap (head of commoner/worker clan); and Dri Jerbal (commoner/worker).
International Organisations	ACP, ADB, AOSIS, FAO, G-77, IAEA, IBRD, ICAO, ICCt, IDA, IFAD, IFC, ILO, IMF, IMO, IMSO, Interpol, IOC, ITU, OPCW, PIF, Sparteca, SPC, UN, UNCTAD, UNESCO, WHO

The RMI’s Vision 2018 Strategic Development Plan Framework identifies the country’s key development priorities. The framework contains 10 major goals, each supported by key objectives, and articulates principles and priorities for macroeconomic management, the productive sectors, infrastructure, fiscal management and administration, education, health and other areas. Developed in 2001, in preparation for renegotiating the Compact of Free Association with the United States, Vision 2018 is now considered by many to be outdated, especially as new reform needs have been identified. Nevertheless, the Government continues to refer to the framework as its ‘roadmap’ for development. In September 2009, the Comprehensive Adjustment Program (CAP) Advisory Group submitted its final report to the government with recommendations to create both an improved fiscal position of the government and a more supportive environment for economic development over the long-term. The RMI experienced relatively steady economic growth from 1999 – 2007, fuelled mostly by new resource flows from Taiwan and the amended Compact with the US. However, this economic growth was not sustained and in 2008 a number of key indicators signalled a major slowdown in the economy and the re-emergence of fiscal distress. Moreover, despite high aid receipts for many years, human development remains a major weakness and many social challenges linger. The fiscal, economic and social challenges facing the country have put reforms back onto the agenda, but a clear commitment to and plan for reform remain to be seen. Public sector and fiscal reforms in the late 1990s and early 2000s brought some stability to RMI’s public finance system. However, major challenges have re-emerged that now require critical fiscal adjustment and reform. Public financial management performance ratings for RMI generally fall below regional averages. The country’s public finances and broader economy are heavily influenced by the Compact of Free Association with the United States. Annual decrements in Compact grants are having major impacts on revenue (which in 2008 represented only 94 percent of expenditures) and accelerate the need for fiscal adjustment. The government is currently considering fiscal reforms, primarily expenditure compression measures and an overhaul of the tax system. The Financial Management Act and Vision 2018 articulate a number of financial policies and priorities. Among them are: the need to maintain balanced budgets and fiscal stability; strengthening of budgetary controls, financial controls, proper accounting procedures, auditing and reporting systems; full compliance with competitive bidding procedures; strengthening of the Ministry of Finance; and avoidance of unplanned and wasteful expenditures. While progress has been made in upholding some of these policies, many weaknesses prevail throughout the financial management system. Transfers to public enterprises are growing unsustainably, totalling over US$7 million in FY2008, prompting the Finance Ministry and Cabinet to voice concern over poorly performing public enterprise. As of FY2008, RMI’s total outstanding external debt stood at just under $99 million, with about $60 million made up of concessional debt to the Asian Development Bank. This gives the RMI a relatively high debt to GDP ratio of 62 percent.

Annual budget documents

Items included:	- Proposed expenditures (shown by programs and sub- programs with a summary of policies and programs and specific performance targets to be achieved during the fiscal year shown against each program). – Anticipated revenues. – Development expenditures. – Recurrent expenditures. – Proposed receipts, disbursements and commitments of external aid. – Opening and closing balances, flow of funds of public financial assets including trust funds and special funds. – Revenues and expenditures for the previous year and projects for the next fiscal year. – Government borrowing in the current fiscal year, existing national debt and annual debt servicing.
Document: Medium Term Budget Framework	This document will present a four-year statement of the Budget by main programs of revenue, expenditure and financing.
Document: Annual Ministerial Economic Policy Statement	Tabled by the Minister of Finance, this document presents a macroeconomic overview and a sector review of the progress against the national vision.