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Country Highlights

Tuvalu & its Economic Landscape

Tuvalu contends with considerable economic difficulties due to its tiny scale, geographic isolation in the Pacific Ocean and reliance on a few climate-vulnerable sectors. With a population of just 11,000 people scattered across 9 atolls, Tuvalu lacks the size and resources to achieve economies of scale in production and trade. Its GDP per capita is also quite low at around $6,000.

Tuvalu’s remote location far from major markets leads to very high sea and air transportation costs. This hampers the competitiveness and profitability of existing local industries dependent on exports like fishing, copra and handicrafts. Lack of regular shipping also inflates imported food prices. Limited infrastructure in power, ICT and port facilities compounds market access barriers.

However—Tuvalu enjoys control over a large maritime exclusive economic zone rich in tuna. It also derives steady revenue by leasing out its attractive .tv internet domain suffix. There is scope to further leverage these assets to drive economic growth. For instance— onshore storage and processing plants can boost efficiency in the fishing industry. The Funafuti port redevelopment project will also reduce cargo handling costs.

Tuvalu faces considerable economic challenges stemming from its remoteness, lack of natural resources, and vulnerability to climate change impacts.  Narrow economic base dependent on fishing, subsistence agriculture and government spending which accounts for almost 70% of GDP. Lack of economies of scale given tiny population of 11,000 people.

Remoteness from major markets leads to high transportation costs which hinders competitiveness. This is compounded by poor infrastructure for power, ICT and shipping. Susceptibility to tropical storms, flooding and sea level rise which can devastate crops, infrastructure and marine ecosystems. This dampens growth prospects.

However— Tuvalu has opportunities in areas like- maritime resources, renewables, tourism and financial services. Expand fisheries output via better storage and processing facilities. Also leverage revenue from tuna fishing license fees.

Develop solar, wind and ocean energy to shift away from total reliance on imported diesel and bolster energy security. Promote eco-tourism showcasing pristine beaches, marine wildlife and traditional culture to diversify the economy.

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Understand the macroeconomic situations that affect the global positioning of countries.

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Featured Reports

Understand the macroeconomic situations that affect the global positioning of countries.

Businesses can better understand how chatbots can advocate their vision.

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