The economy suffers from Tuvalu's remoteness and lack of economies of scale. Virtually the only jobs in the islands that pay a steady wage or salary are with the government. Subsistence farming and fishing remain the primary economic activities, particularly off the capital island of Funafuti. There is no apparent huge disparity between rich and poor in the country.
The Australian dollar (A$) is the currency of Tuvalu. Tuvalu's GDP per capita was about U.S.$1,200 in 2001. Only 30% of the labor force participates in the formal wage economy. The remaining 70% are primarily in rural subsistence and livelihood activities. There is high youth unemployment and few new jobs being created. Meanwhile, there has been an inflow of people from the outer islands to Funafuti. Practical policies are needed for improvements to the livelihoods of the growing numbers of young Tuvaluans who aspire to a more affluent lifestyle than older generations.
About 500 Tuvalu men are employed abroad at any given time as sailors, primarily on German-owned ships. Another 300 sailors are in Tuvalu on well-earned leave between rigorous, 12-plus-month cruises. Remittances from seafarers is a major source of income for families in the country. In 2002, the Asian Development Bank approved an assistance package to upgrade the Tuvalu Maritime Training Institute which trains young Tuvaluans so they can work aboard foreign vessels.
The Tuvalu Trust Fund (TTF), a prudently managed overseas investment fund, has contributed roughly 11% of the annual government budget each year since 1990. With a capital value of about 2.5 times GDP, the TTF provides an important cushion for Tuvalu's volatile income sources from fishing and royalties from the sale of the dot-TV domain. With an initial capital of about A$27 million at independence, it now totals about A$76 million.
Tuvalu is a safe country of unspoiled natural beauty and friendly people. Due to its remoteness, however, but also the current U.S.$600 return airfare to and from Fiji and the Marshall Islands on Air Fiji, only a handful of tourists visit Tuvalu annually. Air Kiribati has started service from Fiji to Tuvalu to Kiribati, but its long-term success is still in doubt. Almost all visitors are government officials, aid workers, NGO officials or consultants.
Government revenues largely come from sales of stamps and coins, fishing licenses, income from the TTF, and from the lease of its highly fortuitous .tv Internet domain name. Domain name income paid most of the cost of paving the streets of Funafuti and installing street lighting in mid-2002.
GDP: purchasing power parity - $7.8 million (1995 est.)
GDP - real growth rate: 8.7% (1995 est.)
GDP - per capita: purchasing power parity - $800 (1995 est.)
GDP - composition by sector:
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 3.9% (average 1985-93)
Labor force: NA
Labor force - by occupation: people make a living mainly through exploitation of the sea, reefs, and atolls and from wages sent home by those working abroad (mostly workers in the phosphate industry and sailors)
Unemployment rate: NA%
revenues: $4.3 million
expenditures: $4.3 million, including capital expenditures of $NA (1989 est.)
Industries: fishing, tourism, copra
Industrial production growth rate: NA%
Electricity - production: 3 million kWh (1995)
Electricity - production by source:
fossil fuel: NA%
Electricity - consumption: 3 million kWh (1995)
Electricity - exports: 0 kWh (1995)
Electricity - imports: 0 kWh (1995)
Agriculture - products: coconuts; fish
Exports: $165,000 (f.o.b., 1989)
Exports - commodities: copra
Imports: $4.4 million (c.i.f., 1989)
Imports - commodities: food, animals, mineral fuels, machinery, manufactured goods
Debt - external: $NA
Economic aid - recipient: $7.9 million (1995); note - substantial annual support from an international trust fund
Currency: 1 Tuvaluan dollar ($T) or 1 Australian dollar ($A) = 100 cents
Exchange rates: Tuvaluan dollars ($T) or Australian dollars ($A) per US$1 - 1.5207 (January 2000), 1.5497 (1999), 1.5888 (1998), 1.3439 (1997), 1.2773 (1996), 1.3486 (1995)
Fiscal year: calendar year
- See also : Tuvalu