Tuvalu

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]

The micro economy of Tuvalu, like much of the Pacific, is extremely vulnerable to external shocks both natural and economic. As a result its economic performance tends to be equally volatile. The main centres of economic activity are fishing and substance farming. There are nascent tourism and retail industries; however, the majority of the country's income stems from external flows such as grants from donors, receipts from the trust fund and remittances from seamen working on overseas vessels. The result of this large reliance on non tax income means that income flows tend to be quite unstable, however, at the same time, it is unlikely that they will cease in the medium term, even though the quantum of income may change. In such an environment the trust fund and donor flows act as an important financial buffer against this financial uncertainty. The government is pursing public sector reforms in line with the Te Kakeega II 2005-2015 strategic plan to improve financial stability. Key reforms include debt management; privatisation of some government functions; and improved public financial management capacity. Tax reforms were implemented in late 2008 and included changes to personal income tax (higher threshold and more progressive scale), business/net profit changes (uniform 30% tax rate), and introduction of the Tuvalu Consumption Tax (TCT). Moreover, customs reforms (tariff reductions to reflect trade agreements, introduction of excise duties, change of customs valuation systems, reduction of tariff exemptions and removal of sales tax) were also approved by parliament in mid 2009. A revenue monitoring framework has been developed and estimates of revenues from customs and the TCT derived were used in formulating the 2010 budget. With the majority of the population engaged in subsistence farming and fishing, the money economy is dominated by government activity. Fishing licences and marketing of its internet domain name '.tv' contribute to government revenue. A private sector-led economy has yet to emerge; and given the inherent constraints in such a small country, the reality is that the private sector may never lead the economy.

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.

Tuvalu relies heavily on international donor assistance, accounting for approximately 63 per cent of the 2008 recurrent budget. Taiwan and Japan are the major donors for capital investment projects. Australia, New Zealand and the European Union are also considerable aid providers. Australia's aid program is currently guided by the Tuvalu-Australia Pacific Partnership for Development (signed August 2009), which currently focuses on the prudent management of the country's limited resources to support Tuvalu’s economic prospects and achievement of Te Kakeega II: National Strategy for Sustainable Development 2005 – 2015 and the Millennium Development Goals (including improved delivery of essential health and education services and development of private sector activity). Priorities of the partnership include stronger public financial management of Tuvalu’s limited economic resources, which includes: ␣␣ Continued annual financial support to the Tuvalu Trust Fund ␣␣ Performance linked budget support to the Consolidated Investment Fund (CIF) linked to reform ␣␣ Targeted in-line advisers in key central economic and oversight institutions ␣␣ A medium term expenditure framework for the health and education sectors.