November 19, 2020

On trading in Tuvalu

by Deanna Ramsay / in Q&A

Trade practitioners discuss the country’s trade landscape, and what their daily work entails

 

The Pacific island nation of Tuvalu has only a little more than 10,000 residents. Sitting halfway between Hawai‘i and Australia with 26 square kilometres of land, its isolation and its size means that trade for the country is both difficult and essential.

George Vann Temauaniti and Darryl Farshid Ikbal of the Tuvalu Department of Trade discuss what’s going on there, and what promise they see on the horizon.

What does trade in Tuvalu look like today?

Earlier in the 2000s we did analyses of our trade and drafted trade policies and things started to change – the context of trade started to change. We are now able to communicate on trade to our targeted audience, and with the support of good trade policy we are implementing very good activities. These activities are aligned to the National Strategic Plan, and this is all building confidence in trade.

How did you first get interested in trade?

Temauaniti: I had no background in trade, and started working with the Enhanced Integrated Framework (EIF) project with the Ministry of Trade, Tourism and Commerce in 2013. Just six months into the job I started to understand how important trade was to the country in terms of growing the economy and helping to reduce the poverty rate in Tuvalu.

These two targets are the most important. Coming from a business perspective, it sparked my interest to want to help our leaders to see where the opportunities are to make changes to the economy. So when I started engaging with the consultant to draft the trade policy I came to understand more of what the country needs and what types of activities are required. It really helped to build my confidence in this area. From then on it started my interest in trade.

And what are the major trade opportunities for Tuvalu?

During the consultancy period for the Trade Policy Framework (TPF) we interviewed people all over and even on the outer islands and asked them what were the main activities that could build the economy, and a lot of people suggested the tourism industry as an economic opportunity for Tuvalu.

For people on the outer islands where they have items that they produce, getting into supply chains are one of the best opportunities. So they suggested things like coconut oil, dried fish, coconut syrups – so those are the things we are looking at for the outer island people to get some sort of income.

We also spotted that labour mobility is one of the contributors to the economy in terms of revenue generation. Tuvalu has only 11,000 people. Back in the early 2000s Tuvalu had around 500 seafarers and the revenue collected was almost AUD 4-5 million (US$2.9-3.6 million) and that was only 500 people, but if we get it to 2,000 working as seafarers or working in New Zealand or Australia, we could hit around AUD 10 million, and that would contribute quite a lot to our economy.

Tell me more about Tuvalu’s fisheries sector.

We are surrounded by ocean, we have about 900,000 square kilometres, so we are filled up with fish and we’ve been allowing investors to come and fish in our seas, get the important resources that we have and they make money out of it and we only collect just a part of what they receive. This is an example of how we have to change our mindset, to look at being in business, not just the end process.

How is the plan for tourism in Tuvalu being affected by COVID-19?

COVID has really disrupted the economy. The focus is still there for us to look at the tourism industry with the hope that soon the pandemic will be over. The pandemic is maybe giving us an opportunity to complete some of this work like looking at building the infrastructure and working on how to market our tourism industry – those things can be done now so once the conflict is over we can just jump into the solution and help to grow tourism here.

If you look at tourism, in comparison to some of the data collected in 2018 we had about 1,000-2,000 tourists but each tourist we estimated they can spend around US$1,000-2,000 if they are here for a week, and that is a lot of revenue for us. So any increase in tourism helps, and if you know you are collecting that kind of money each month rather than relying on donor support.

So what does a workday look like for you?

We have a lot of activities but all the activities must link to the project work plan, and with each there is a different approach. So we set up meetings with customers; we have regular meetings with the private sector to see what support or trainings they need; we run supported workshops on Funafuti and the outer islands; we support the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) activities; we support the outer island coconut rehabilitation consultancy; we provide the outer islands with information on how to improve the production of coconut oil; we work with the tourism team; we have groups to work with different sectors and departments to brainstorm; we write reports and develop project proposals and concept notes for funding assistance; we follow up with donors to support the funding of projects; we develop TORs and create MOUs, for example recently with a women in business organization; and, of course, we answer emails.

What is a trade highlight for you?

Ikbal: PACER Plus for sure. PACER Plus is a huge regional agreement that countries signed, and we got heaps of support from EIF to help us to push this agenda and assist the Department of Trade.

We are doing all the preparatory work to ensure Tuvalu ratifies this free trade agreement and hopefully by the end of November the cabinet will ratify PACER Plus.

Another highlight for me are outer island visits and meeting with people and hearing about their experiences, especially if they want, for example, to produce breadfruit chips and we can discuss with them what they need to start and the strategy. Those experiences are what motivates me to stay and work with trade, knowing that we can provide some sort of assistance to these local producers.

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Tuvalu just launched its Trade Portal, with comprehensive information on trade and guidance for setting up a business, with support from EIF.

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This article is part of a series highlighting the work of trade practitioners and Enhanced Integrated Framework partners in the least developed countries. 

Disclaimer

Any views and opinions expressed on Trade for Development News are those of the author(s), and do not necessarily reflect those of EIF.