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Republic of Kiribati

KIRIBATI SUSTAINABLE DEVELOPMENT PLAN (KSDP): 2008—2011

Strategies to Enhance and Sustain Growth in order to Reduce Poverty


Republic of KIRIBATI

KIRIBATI SUSTAINABLE DEVELOPMENT PLAN (KSDP): 2008-2011

Strategies to Enhance and Sustain Growth in order to Reduce Poverty

National Planning Office Ministry of Finance and Economic Planning Bairiki, Tarawa

November 2007

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Foreword I am indeed happy to foreword this plan which is the 8th in the series of development plans which started in 1979 when we first became an independent nation. It is interesting to note the changing themes or topics of the successive plans but I believe this is very much dictated by external factors as well as local events. For instance, when we first became an independent nation the main concerns that time were on our culture and our national income given that phosphate mining on Banaba ceased that same year—as a result these issues constituted the main focus of the government in that period. Likewise, one of the major international concerns at that time was on the population growth and consequently our own government priority was also on controlling the population growth in that period. I have no doubt that this plan also incorporates important contemporary issues—issues that Kiribati people, as well as international and regional communities, perceive as of great importance, such as poverty reduction, sustainable development, good governance, and so forth. Most of these issues in fact are reflected in the MDG Declaration, the Mauritius Strategy, and the Pacific Plan therefore this plan is consistent with the international and regional agenda. The process of formulating our national plan has been entrusted to the Planning Office within the Ministry of Finance and Economic Planning but while that is the case, the actual consultations leading up to the plan involves all relevant stakeholders like the churches, the civil societies, the private businesses, island councils, people on Christmas island, and of course the line ministries and the public enterprises. I am also aware that our development partners were also consulted in this exercise and I want to thank them for their continued support in our development efforts and I have no doubt we will continue to work together in the years ahead in order to address the people of Kiribati needs and aspirations. As we all know a plan is just ‘another’ document, which could lie on the shelves to gather dust without making any substantial or tangible benefits to the people, but I have no doubt that we—IKiribati, and with our development partners support and assistance, can put the contents of this document into action and meaningful reality.

………………………..

Honourable Natan Teewe Minister of Finance and Economic Planning

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Acknowledgement

I really want to express my deep gratitude to all those who have contributed to this plan. Like any nation-wide activity it is difficult, if not impossible, to list all those involved in the exercise so I will refer only to organization names or broad categories of people involved. My thanks go to all government ministries and statutory bodies; to the public enterprises; to the private businesses; to the churches and civil societies; to island councilors and the ‘outer’ island representatives, and to the people of Christmas island and that of Abemama island for their contributions. We could not visit all the islands so we took the opportunity of meeting the island councilors and the island representatives when they visited S.Tarawa to attend a meeting convened by the SDGK project (UNDP funded project within the MISA) in September 2007—and we want to thank the project manager and MISA for allowing us to meet and discuss the national priority issues with these people. In the case of Abemama island two of our staff were invited to join the SDGK team in their visit to the island and these two staff met and discuss national priority issues with people on the island. I extend also our gratitude to our development partners, in particular to the various consultants who have provided inputs and assistance to this plan. Without input and feedback from people we met and consulted this plan would not have been as comprehensive and as rich in content as it is now. Last but not least I congratulate my staff who have worked hard to produce this plan.

………………

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Acronyms ADB………...Asian Development Bank AUSAID…….Australian Aid Agency NEPO……… National Planning Office MISA………. Ministry of Internal Affairs MFED……… Ministry of Finance and Economic Planning SDGK……… Strengthening Decentralization???? MELAD…… Ministry of Environment, Land, and Agriculture NZAID………New Zealand Government Aid Agency

??????????????????

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Contents Foreword………………………………………………………….. Acknowledgement…………………………………………… Acronyms……………………………………………………….. Introduction…………………………………………………….. Chapters 1. Background information……………………………… ….5 2. Review of past performance…………………………… .6 3. Identifying priority issues …………………………………. 7 4. The New Plan (KSDP):2008—2011…..…………………..8 5. Monitoring and Evaluation………………………………. 12 6. Linkages of the new Plan with International ………… 15 and Regional Agenda (e.g. MDG, Mauritius Strategy, and the Pacific Plan) References Appendices……………………………………………………………… A.1 Real GDP: 1996—2006…………………………………………………… A.1 Nominal GDP:

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Introduction This document contains issues, strategies, activities and programmes which the people of Kiribati, through workshops and consultations, have decided as of critical importance to the nation given their direct bearing, eminence, and potential impact on the people; their islands; their environment; and their established institutions. Although the scope of the issues covered in this plan is fairly exhaustive, this document does not contain all the details of the strategies or activities because of space constraint—in many instances, references will be made to other documents1 that contain the relevant details. As with previous plans, the main two chapters of this plan focus on the review of past performance and on the ‘next’ priority issues and the relevant strategies. In the review chapter, the focus is more on what happened in the past four years—i.e. the period of the last NDS, and in the priority issues chapter, the dominating feature is a matrix showing the issues, strategies, activities, implementing ministries, and development partners—as was done in previous plans. It is important to note that the review section contains a fairly detailed description of macro-economic topics because the intention is to have a fairly good understanding of what has happened in the past in order to plan properly for the future, along the lines of evidence-based planning—the widely accepted approach to planning and policy formulation these days. Although the duration of this plan is similar to previous plans, i.e. four years, it is important to bear in mind that many programmes or activities could go on for more than four years, in which case programmes or activities of one plan period would continue into the next plan period. In cases where the same government continues to govern, the programmes or activities that overlap do not pose much problem, however, when a new government comes in, there is always the risk that changes could be made—some may be nominal but others could be substantial. Needless to say, total reversal of programmes, or total elimination of such, often carries huge cost to the nation in terms of time, effort, and money. To start a new programme or activity often requires lengthy and costly process, and often the outcome is uncertain, so it is always important to consider all options before final decisions are made. In some cases programmes or activities take time to bear ‘fruits’, or for the results to materialize, so objective analysis and evaluations need to be undertaken first before final decisions are made to go ahead, or not to go ahead. To cite an example, a plan to increase the number of doctors would generally take more than four years to materialize so to expect any tangible result within a particular government plan period would not be realistic, i.e. a two term period may be required by the same government in order for the fruits or the results to be realized and this is important for the politicians and for the general public to understand and appreciate. Another example is the replanting project: coconut and breadfruit trees require about 5-7 years before they can bear fruits, so people should expect tangible benefits from any replanting project to 1

These are mostly sector (or ministry/department plans)

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materialize after five years or so—again, well after the government initiating the project has completed its first four year term. Likewise, big investments in transport or manufacturing require extensive periods of time before they can be profitable and so people should not expect ‘healthy’ cash flow or any tangible result from such investments after only a few years of operation. Big projects require money and time and therefore advance and proper planning is crucial for the success of the projects. During the consultations the name or the title of the plan was also discussed and although several names were mentioned, there seems to be a strong argument to revert back to the word ‘Plan’ rather than ‘Strategies’. The main reason for using the word ‘Plan’ instead of ‘Strategies’ is primarily because the word Plan encompasses many topics or concepts such as ‘issues’, ‘strategies’, activities, outputs, and so forth. The word ‘Strategies’, on the other hand, refers simply to “ways to address or solve constraints, strategically”. That is, when we talk of the Plan we are referring to a document that is more encompassing and complete. The word ‘sustainable’ was also well supported by the people attending the consultations because they argued that development needs to be sustained or on-going—i.e. not a ‘one-off’ or unsustained activity. So the final name of this plan comes to: National Sustainable Development Plan (NDSP)—a comprehensive plan for sustainable development. It is important to note that most of the key policy areas and issues indicated and raised in the NDS 2004-07 are repeated here though arranged in a slightly different format and under different ‘grouping’ names. That is there is continuity in most programmes or activities though the emphasis may be slightly different. In essence the thrust of this plan is to foster and secure robust economic growth so that people standards of living would improve. In this respect the two productive sectors that will receive particular attention is the fisheries and the tourism sectors. The roles and objectives of other sectors or ministries will therefore be made to align or support these two productive sectors. For instance, the environment laws and regulations will be formulated and enforced in a manner that the fisheries and tourism developments are not necessarily impeded but rather enhanced and sustained. The key word here is ‘sustainable’. Likewise, the focus of the communication and the works ministries should be on infrastructures that would support fisheries and tourism, e.g. maintenance of sea ports and airports, terminals, wharves, etc. This is not to say that the government should focus only on the two sectors, rather the idea here is that for ‘economic growth’ purposes, these two areas, viz., fisheries and tourism have the greatest potential for development and sustained growth because of Kiribati comparative advantage in both. These two sectors were in fact stated in the previous NDS, p. 22, “Growth-focused strategies include stabilizing population growth….. …and promoting private investment in marine resources, tourism, etc”. But knowing the expensive infrastructures and capital required for both industries the government should take the lead, at least in funding and preparing the required infrastructures. Once the physical and institutional infrastructures are in place then the government role is to attract and encourage the private sector to carry out fisheries and tourism businesses.

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Lastly it is important to note that the priorities and the focus of this plan conform closely to the agenda of the MDG, the Mauritius Strategies, and the Pacific Plan, and this consistency will be reflected in the last chapter. This clearly shows the commitment of the Kiribati government to the international and regional concerns.

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Chapter 1: Background information Kiribati, formerly known as the Gilberts and Ellice Islands Colony, or GEIC for short, became independent from Britain in 1979, the same year the phosphate mining on Banaba island (or Ocean island) ceased. Phosphate was the main export item that time and constituted the main taxation revenue of the colony in those days. In 1976, three years before independence, the Ellice islands separated from the Colony and became an independent nation now known as Tuvalu. Tuvalu people are of Polynesian origin while Kiribati people are of Micronesian stock, like the Marshal islanders, Ponape, Palau, etc. The people are generally of brown colour and straight black hair and their physique are somewhat in between the big ‘Polynesians’ and the slim ‘Melanesians’, i.e. of medium stature. There is theory to suggest that Kiribati people originally came from South East Asia, however it is widely accepted that the migration and settlements came from two directions, and at different times—one from the north, and the other, more recently, from the south. This may explain why some Kiribati people look like Asians while others look more like Polynesians. The country is divided into three island groupings; the Gilberts group; the Phoenix group; and the Lines group. The Gilberts group consists of sixteen well known islands such as Makin in the north; Abemama2 in the central part; Arorae the most southern island, and the rest in between—the capital island Tarawa is located between Makin and Abemama. These groups of islands lie very close to the equator and along the International Dateline. The Line islands, comprised of Christmas island, Tabuaeran (Fanning) and Teraina (Washington) are located further to the east and closer to Honolulu island— two hours ahead of the Gilberts group in terms of time. The Phoenix group lies halfway between the two island groups and Canton is the only inhabited island in the group with about 50 people on it—all are government officials. Kiribati total land area is 810 sq km—if we include the islands that are not inhabited as well in the Line Group. The islands making up the 810 sq km are generally small atolls except for Christmas island with a total land area of 388 sq km ––probably the largest atoll island in the whole world. The islands however are spread over 3 million sq km of ocean— the Pacific Ocean—but while this vast stretch of ocean poses transport and communication problems it also provides a potential source of wealth for the nation. As a matter of fact many foreign nations are currently fishing in Kiribati vast ocean area and are paying between A$20-30 million a year as fishing fees to the government. There is growing discontentment however on the generally low return from such a vast property and efforts to exploit and utilize marine resources are being considered. The climate is of course tropical with an average temperature of 28 degrees centigrade. The islands however get the cool breeze from the trade winds and this moderates the heat making it more bearable than otherwise. The country 2

This island is where the famous novel writer Robert Louis Stevenson once visited and stayed for a while.

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is free of cyclones or hurricanes because it lies within 100 degrees north and 100 south of the equator—the so-called ‘hurricane-free belt’ but occasionally Kiribati get hit by strong westerly gales (te ang maeao). Kiribati political structure is fairly similar with other democratic countries in the world. The head of the government and the head of state is the President who is elected on a nation-wide basis after members of the Parliament have been selected by their respective constituents. The members themselves decide on the four candidates for the presidency and generally the larger political party would field in more candidates—in some instances, the four candidates can all be from one party, if the party commands a fairly large support. There are generally two main parties; the governing party (Te Tautaeka) and the opposition (Te Kaitara). Sometimes a few members would decide to form their own circle but in general they would side one of the two bigger parties. In actual fact the parties have their own distinct names, such as ‘Boutokan te Koua’, ‘Maneaban te TeMauri’, ‘Mauri’ party, etc. The governing and the administration on the outer islands are carried out by island councils. For each island there is an island council president and several councilors and these would meet regularly to decide on the priorities and work plans of their councils. The central government through the ministry of MISA, provides a clerk to each council on the outer islands and these clerks are supposed to be giving advice to the councilors but in actual fact they are the ones who actually run the day-to-day administration on the islands. They are paid by the central government and are responsible to the secretary of MISA. In addition to the central government’s support grants the island councils themselves collect their revenue from business licenses, vehicle registration fees, airport fees, etc. however the amounts collected are still very minimal, except for the island of Tabuaeran (Fanning) which receives a substantial amount of foreign cash from NCL3 tourists visiting the island. Enhancing the capacity and capability of the island councils in terms of effective administration and development planning is crucial to gaining more autonomy and ability to run their own affairs.

To be continued!!!

3

Norwegian Cruise Line

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Chapter 2: Review of past performance Why bother reviewing past performances? What is seen and happening today is very much the result of yesterday events, and likewise yesterday events were very much the result of the previous days happenings, i.e. things of today were the creations of the past and so to shape our future we need to know and understand fully what has happened in the past. We can surrender our future to nature and random selection but if we want to have our say in our own future, to shape our own future in the way we want it, then it makes much sense to know and understand fully what has happened, and why it happened, hence the reason for this chapter.

2.1 Economic growth Since 2003 the economy has been facing severe constraints; the dramatic rise in fuel price; the decline in world copra price; the devaluation of the US dollar; the interruptions in the international flights; and the deteriorating and worsening conditions of most government assets and public infrastructure. In brief, as shown below, the economy performed poorly since 2003. GDP Structural break: 1991--2006 100000

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In 2002 real GDP growth rate was 3.2% but in 2004 the growth rate went down by minus 1.5%, and this negative growth rate continued right up to 2006. Another way of explaining the economic growth is to look at the longterm trend and see which periods reflect ‘boom’ or ‘buoyant’ years against periods of recession. The figure below demonstrates this ‘boom’ and ‘recession’ pattern, with the linear regression line representing the long-term trend.

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GDP: 1991--2006 100000

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The straight regression line represents the average of GDP or the expected value of GDP in the period 1992—2006, i.e. the GDP long term trend. The line therefore represents the ‘expected’ output given the available resources. So we can say that there was a period of recession up to 1997, after which we see the graphs moving above the regression line meaning that the economy was performing ‘better’ than expected (‘boom’ period), until 2003 when it started to decline again—the decline continued up to 2006, and so we can say the recession periods are: one for the period leading up to 1997 and the other period starting from 2003 and continued up to 2006. The ‘boom’ period is between, i.e. between 1998 and 2002. While the graphs above show GDP level, the graph below shows the growth rate of GDP in the same period—the solid graph is real GDP and the dotted one is nominal GDP growth. GDP Growth rate: 1992--2006 30.0

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From the figure above we see that GDP growth rate is quite volatile—in some years the growth rate would go over 10% while in some years, it would be

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negative however since 2003 the growth rate has been persistently negative. The volatility, as mentioned above, is due to high fluctuations in copra price; the dramatic rise in fuel prices; and the volatility of fishing license4. To see how the GDP per capita moves in the same period (i.e. 1991 to 2006) this is provided in Fig… below. This is very interesting because the LDC status given to countries by the UN depends on this particular measure, and Kiribati was granted LDC status way back in 1985. Fig GDP per capita ($): 1991--2006 1100

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The GDP per capita for Kiribati, from the graph above, was just over $500 in 1991 but in ten years time it reached $1,000. In 2005 it went down below $900. Although there are external factors which could help explain the decline in national output, there are also internal factors which could be improved in order to uplift the economy back to the ’expected’ level. The challenge to the government is to ensure that there is sustained growth in the immediate years otherwise the economy will continue to slide down resulting in a progressively deteriorating standards of living of the Kiribati people.

2.2 Fuel issue The dramatic rise of fuel from overseas has a widespread impact on most businesses, including government businesses, because it inflates their internal cost thus reducing their profit margin. The increase was from US$20 per barrel in 2001 to US$70 per barrel in 2005, and the indications are that it would stay around US$70-$80 or could go up to US$ 100. One very obvious implication of this is that the increase in fuel price in Kiribati is necessary and justified otherwise the oil importing company would go bankrupt—a more dangerous situation for the whole of Kiribati. For private businesses, the increase in fuel cost can be easily passed on to consumers by simply raising the prices of their goods or services sold but for government-owned companies and corporations, this is a bit difficult to do because of government 4

Although fishing licenses are not strictly GDP components, they do indirectly affect GDP through government service and output.

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control on the prices or tariffs5. As a consequence many of the governmentowned enterprises would have their profit margins squeezed—in fact the profits would be so negative that the value added of the companies would be negative as well. In fact this is one main reason why GDP has gone down in recent years.

2.3 Copra industry The decline in the world copra price means that the value of copra exports would be minimal, certainly the value-added of the copra company6 that exports the copra will be negative given the very high transport cost. Although the government maintained the local copra price of 60 cents a kilo, the real price would be around 20-30 cents a kilo meaning that 30-40 cents is the government subsidy. The high copra price paid to the copra cutters encouraged and stimulated copra production, as it should, but the excessive cost of the copra subsidy is a big drain on the government finances. Compounding the problem is the fact that many copra were left on the outer islands for very long periods because of transportation problems. On some islands, the copra sheds are quite far from the sea port in which case the loading would take considerable time and this has discouraged shipping firms to load copra. In some instances, payments were slow to shipping firms so some firms decided not to load copra on their vessels. As a consequence, many copra on the outer islands were left for extended periods and eventually got spoiled. It is clear from the two charts below that the low copra production in Kiribati in 2000 was most likely caused by the fall in the world copra price to $400 per ton compared to $600 the previous year. The low price continued up to 2006 but from the price chart we see in fact a rise in the copra production in 2003 to more than 10,000 metric tons—despite the low world price of $300 per ton. This rise therefore in copra production against a backdrop of falling world price can only mean that the government is subsidizing the excessive production. As a matter of fact the high copra subsidy (of 60 cents a kilo or $600 per ton) was maintained up to 2007 at the total cost of almost $ 20??? million to

5

All government companies and corporations (or authorities) each have board of directors to oversee the management and set policies for the enterprise but often Cabinet influences the company policies. 6 The Copra Society.

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Fig

Copra Production: 1985--2006

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Copra price: 1985--2006

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19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06

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Note: Copra export price is closely related to the world market copra price

the government over a four year period. Before that the local copra was maintained around 45 cents a kilo or $450 per metric ton, and the subsidy came from the STABEX account7. In 2004 funds in this account ‘dried up’ and government therefore had to use drawdowns from the reserve fund (RERF) to

7

STABEX stands for ‘stabilization of exports’, a fund set up by the European Union (EU) to assist the copra industry during periods of low production, say when there is drought or severe weather affecting the coconut industry. This fund has reached $6 million at some stage but after continuous use the fund eventually ‘dried up’ in 2003.

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maintain the copra subsidy, which is higher than before because $600 per metric ton was being used. Apart from the copra subsidy issue there were other serious problems with the copra industry, such as transportation; storage; subsidy payments; conflict between the Copra Society and the Copra Mill, and so forth. There were several attempts made by the government to resolve these problems, such as organizing national copra summits in which people from the outer islands were called to discuss ways of resolving the transportation, storage, and payments problems. There were some suggestions to merge the Copra Mill and the Copra Society but this has not been done. The copra industry is still facing formidable challenges and there is an urgent need to address these.

2.4 Seaweed production and export Seaweed farming is a more recent activity starting in the early 1980s with a production of just 25 metric tons. In 1991 it reached 1 million with Abaiang island producing more than half, then it declined to less than 200 thousand metric tons before it increased again to more than a million in 1996—the high production remained until 2001. In 2002, the production dropped to just over 400 thousands and this decline continued up to 2005. Fig.... Seaweed production: 1985--2005 1600000

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The increase noted in 1996 was due to the high production of seaweed in the Line islands, in particular on Tabuearan. The high production on Tabuearan continued up to 2005 while the production on the other islands was significantly reduced. In terms of export earnings, seaweed exports fetches around $1.6 million in its best year (2000) while in bad years it could go down to just $400 thousand. In actual fact both the production and export are relatively low in recent years, despite government subsidy8.

8

Like copra, a price of 60cents a kilo is being maintained by government and this is one main reason for the loss of the company.

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Fig

Seaweed export value: 1987--2005

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The current financial problem of the company is largely the result of maintaining high local price given to seaweed growers, i.e. 60 cents a kilo. Also the weakening US dollar is another factor behind the poor performance of the company as the overseas contract price of seaweed is fixed in US dollars. As can be seen from the bar chart and graph, both the seaweed production and exports fluctuate greatly, but this high fluctuations is caused by the high fluctuations in island productions, which in turn is due to weather conditions and to peoples enthusiasm. On many occasions seaweed growers complain of lack of funds and this is probably one of the main reasons for the decline in production on the outer islands. For instance, Marakei and Abemama, once the dominating producers of seaweed are no longer producing in recent years. On the other hand, the production on Tabuearan is the largest now and as a matter of fact there has been some talk of moving the Seaweed company headquarters to Christmas island. What is interesting though is that many islands can actually grow seaweed but the challenge is in keeping the interest and the momentum going. With the world price of copra not very attractive, seaweed is an option to turn to but serious and concerted efforts are needed in order to revive the popularity of seaweed farming. The government should encourage farmers to continue cultivating seaweed, not necessarily by direct subsidy, but perhaps through other incentives such as more trainings, workshops, ready cash, and the provision of transport on the outer islands. The government should also review the local price level in view of the world price and the operational cost of the Seaweed company, including the effect of a declining US dollar.

2.5 Government financing Government is always an important entity in any country and usually controls to a large extent the way the economy performs. To manipulate the economy it can either use fiscal policy or monetary policy. But because Kiribati at this 17


stage does not have a central bank, nor its own currency, it cannot use monetary policy to influence the economy. The only way it can influence or intervene in the economy is through its fiscal policy. The fiscal policy refers to the way the government gets its revenue and spends its money. For instance, increasing or decreasing tax is a fiscal policy, as is the paying out of subsidies. How much money the government collects, or how much it spends, therefore is very much related to its fiscal policy. In Kiribati where the private sector is still fairly small, the government and the public enterprises are generally the main drivers of the economy9 --unlike other more developed countries where the private sector is leading the economy. As can be seen below, the share of GDP attributed to government administration is almost 50%, the largest of all sectors. This is just the government ministries and the island councils, i.e. if we add on the government companies and corporations, then surely we would get a very large public sector so the whole economy is very much driven by the public sector which is one reason why the economic growth in Kiribati is very restricted. From experience around the world, the countries with very strong private sector are usually very strong and robust economies, for example, the United States, Germany, Japan, and more recently, China and India. In China, when it was under very centralized communist system, the economic growth was very minimal but since China ‘opened up’ to the world and to capitalist ideas and practices in the early 1990s, the growth has been phenomenal reaching over 10% in some years—it is still by far the fastest growing economy with potential to grow further.

Fig GDP by major industries: 2006

Non-profit institutions Fishing Manufacturing Construction 2% 3% 0% 0%1% 5% Wholesale /Retail 7% Hotel/Bars 2%

Transport 10%

Government Services 48% Communication 6%

Finance 13% Owner occupied dwellings 3%

9

We are referring here essentially to the monetary sector, i.e. leaving aside the subsistence sector is still very dominant, especially on the outer islands.

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Most countries of the world rely on taxation as the main means of getting revenue, and this is very true for Kiribati. But as explained above, the private sector in Kiribati is relatively small and so we would expect government tax revenue to be small or restricted as well. The small tax revenue means that the government has to drawdown on its savings or its investment income to balance out its budget deficit. The amount to be drawn down is related therefore to the gap between the revenue amount collected and the government expenditure—this is the gap between the two graphs in the figure below. The wider the gap, the more drawdown is needed, and as can be seen from Fig… the gap seems to be widening in recent years: meaning that the drawdown on the reserve fund (RERF) has increased substantially in recent years. The RERF drawdown is shown in Fig…

Govt revenue and expenditure: 1985--2006 120000 govt EXPENDITURE 100000

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In principle if revenue (dashed graph) exceeds expenditure then there is no need to draw down on the RERF however in most years the expenditure is above revenue so we would expect continuous draw down on the RERF. However there were few occasions when revenue exceeded expenditure: this occurred in 1993, and in 1998. The surplus in 1993 was quite small but in 1998 the surplus was quite substantial, and this was mainly due to the very high fishing license of $40 million compared to $29 million in the previous year, and to the green passport fee of almost $3 million collected that year. The ‘other fees’ revenue and the imports duty were also quite high resulting in the total revenue exceeding expenditure by $14 million—as a matter of fact the following year (i.e. 1999) $5 million was injected into the RERF from the consolidated fund10.

10

The ‘consolidated fund’ is the government account which is sometimes referred to as the No. 1 account—as opposed to the No. 4 a/c which is the Development Fund a/c.

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Fig ‌ below shows the central government deficit (solid line) and the RERF drawdown (dashed line). As expected the RERF drawdown graph is almost the mirror image of the budget deficit, i.e. as the deficit widens, so is the RERF drawdown, though in the opposite direction. This is as expected because the intention is to have a balanced budget or a zero budget deficit. It is quite clear however that the deficit substantially increased in recent years reaching over $30 million in 2004. As a matter of fact the deficit would have been much higher if other government commitments, such as payment to Air Pacific flights to Christmas island and other subsidies, funded by donors, were included in the government overall expenditure. Fig

Govt deficit and financing: 1985--2006

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Govt deficit RERF drawdown

-40000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 years

It should be stressed here that while annual revenues and expenditure data are useful for planning and policy formulation, it is important also to understand the actual cash flow which depends not on just annual flows but also on opening or previous cash balances. This is important for managing government finances on a daily basis and knowledge and skills on this is very much needed. In order to see the cash balances of the government an attempt has been made, based on the audited government annual accounts, to construct one—this is shown below.

20


Fig

End of year Govt a/c Balance: 1985--2006

40000

30000

A$ 000

20000

10000

0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 surplus after RERF drawdown -10000

op bal+surplus/deficit transfer from No 4a/c op bal+surplus/deficit adjustd

-20000 years

The dashed line graph shows the government consolidated account balance after the drawdown from the RERF is included and the solid line graph represents the balance after taking into account the closing balance of the previous accounting year. What is interesting in the figure above is that the closing balance of the government consolidated account was positive in previous years (generally over $10 million) but in recent years it has gone down to very low values (less than a million in 2003) and eventually dipped into negative values, despite the large RERF drawdowns in the same period and the transfers from other sources. The implication of this is that while there has been an overdraft (OD)11 in the past, in recent times the OD has become persistently high and difficult to clear, even at the end of the fiscal year. Managing of government cash balances or cash flow is therefore one area that needs appropriate attention in the future—in fact, this has been identified by a recent technical assistance (TA) as one area that needs improvement.

11

Since 2004 the Bank of Kiribati (ANZ) has imposed interest charge on the government consolidated account (especially when it runs an overdraft) and this amounts to over $200,000 a month, i.e. in a year it well over $2 million.

21


2.6 RERF Reserve Fund The reserve fund (RERF) was initially built up from proceeds of war relics and from taxation of the British Phosphate Company (BPC)12 which stopped in 1979 after phosphate deposits on Banaba13 island was exhausted. The market value of the fund was just over $70 million in 1979 but at the end of 2006 it reached $660 million, almost a ten-fold increase over a 25 year period—despite the cumulative drawdown since independence of almost $200 million. All the fund was initially managed by James Capel (now HSBC) based in London but in the mid 1990s half of the fund was given to Nicam (NIKKO) to manage. The two fund managers submit regular reports of the fund performance to the Ministry of Finance. There is also another overseas firm (State Street, Australia) that oversees the performance of the two funds and this firm also submits regular reports to the Ministry of Finance. The figure below shows the value of the RERF from 1984 up to 2006, with the linear regression drawn to represent the average values or the ‘expected’ values of the fund over the period. This line can be considered also as the long term trend with the actual values distributed around it—some above it, and some below it. Fig

RERF value: 1984--2006

800,000,000

700,000,000

600,000,000

AUS$

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

20 06

20 05

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0

years

As can be seen from Fig…. the fund’s value is much higher than ‘expected’ in the period 1998 to 2002 but after that, the RERF value is consistently below the regression or average line meaning that the fund is not performing as it should. This decline could be attributed to the workings of the capital markets

12

This company mined and exported phosphate from the island of Banaba, one of the islands in the Gilberts group, mainly to Australia and New Zealand. 13 Sometimes referred to as Ocean island.

22


or to the excessive drawdowns since 2003. The substantial drawdowns on the RERF in recent years can be seen in Fig‌ . The annual growth of the RERF is shown in Fig below. What is interesting is that up to the mid 1990s there was a significant and robust average growth of 14%, and from there to 2002 the growth averaged around 7%, but in recent years the growth is just about 4%. That is, there seems to be discernible slow down in the growth of the RERF in recent years and again this has been noted in many reports14. Reversing this slow down would be a worthwhile challenge to the government. Fig

RERF annual growth rate :1985--2006

50.0

40.0

30.0

%

20.0

10.0

0.0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

-10.0

-20.0 years

The main purpose for drawing down on the RERF is to balance out the budget deficit however there were instances in the past where the drawdowns were made for investment purposes. For instance, in 1996 the bulk of the RERF drawdown was for the construction of the Parliament building now located at Ambo; and the other drawdowns were for the construction of the Copra mill (now operating on Betio) and the purchase of the ATR aircraft for Air Kiribati (the plane has been subsequently sent back to France in 2004).

2.7 Balance of payments (BOP) Another important macroeconomic statistics is the balance of payments15. This measures the value of transactions taking place between residents of Kiribati and the rest of the world. The transactions are not restricted only to money transactions but also extended to goods and services. For example, when we export our copra or fish, we get in return foreign currency, likewise when we import goods from abroad we send out money to foreigners while we receive goods in return—these are all BOP transactions. Seamen remittances 14

Such as the IMF, ADB reports, etc. This statistical series follows closely the IMF manual. In the System of National Accounts (SNA) this is very similar to the External Transactions Account. 15

23


(A$10-15 million) and interest income from the reserve fund (RERF) of over A$20 million are important BOP items in the Kiribati context. One of the most important components of BOP is the merchandise trade and this will be analyzed separately. So while the trade imports value is a major outflow of the country’s income, there are other inflows of money that actually balances out the trade deficit. These are; seamen remittances; reserve fund and KPF investment income (interest and dividends)16; fishing licenses; and aid receipts. Other direct foreign earnings come from foreign visitors or tourists—but this is relatively small compared to other neighboring countries income, such as Fiji, Cook islands, Vanuatu, etc. Other major outflows include; Kiribati resident airfares when they fly overseas, accommodation and meal expenses; freight charges for imported goods; school fees paid overseas; and large repairs, such as that of airplanes, ships; re-insurance payments; etc.

2.9 Merchandise trade Exports value in 2006 amounts to …….?? while imports value hovers over $80 million resulting in a trade deficit of well over A$ 70 million. Fig Exports and Imports:1972--2006 120000

100000

A$ 000

80000

60000

40000 exports imports 20000

4

2

0

8

6

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16

In principle the interest and dividends earned on the funds should be shown as investment income— even if no drawdown or withdrawal is made. If there is drawdown then this will be reflected only in the closing balance of the investment funds, not as a current transaction.

24


Trade balance: 1972--2006 40000

20000

2006

2005

2004

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-100000 years

Obviously the widening trade deficit calls for a very concerted effort on the part of the exporters, local producers, and on the government. The exporters should be encouraged to improve the quality of their products and the supply so that there is quality and volume to be exported. The local producers, including subsistence farmers, should be encouraged to plant and maintain abundant stock of basic food trees such as: breadfruits, coconuts, pandanus, babai, etc. Likewise, the subsistence fishermen should be assisted in their effort to catch and harvest marine products, for their own consumption, and possibly for trading purposes. The copra mill is one investment intended to add value to copra industry and thus increase the value of exports but the operation has just started and while it does provide an alternative to copra exports, its extra advantage on raw copra needs to be assessed.

2.8 Unemployment Unemployment rate is often a contentious issue because people, and the government itself, are not so sure what is the definition of the word ‘unemployment rate’, especially in the case of Kiribati where a lot of people are actually living in the subsistence sector. But while unemployment rate is difficult to define and to measure, employment statistics, in particular formal employment (or cash workers), are quite easy to obtain from population census results and from the Kiribati Provident Fund (KPF) records. By knowing the categories of the labour force the unemployment rate can be worked out, and these are presented in the tables below. Table 2.8.1, for instance, shows the labour force categories—and note the relatively low number of ‘unemployed’. The problem is compounded by the fact that

25


successive census commissioners use different definitions of unemployment during the censuses. Table 2.8.1 Labour force categories (15 yrs and above): 1990-2005 Cash workers Village workers Unemployed Total Labour force Others Total

1990 11,167 20,546 914 32,627

1995 7,999 30,341 67 38,407

2000 9,200 30,712 644 40,556

2005 13,133 21,582 2,254 36,969

10,550 43,177

7,294 45,701

9,664 50,220

21,371 58,340

Note: ‘Others’ include ‘housewives’, ‘disabled’, ‘students’, ‘inactive’, ‘prisoners’, etc. Source: Kiribati Population Census reports (1990, 1995, 2000 and 2005)

If we take the level of ‘unemployed’ straight from the census reports without adjusting anything then the unemployment rate would come to just less than 6%, a figure that would be hardly accepted given so many people in Kiribati are actually looking for jobs. One way of getting a more meaningful ‘unemployment rate’ is to treat the ‘village workers’ or the ‘subsistence workers’ as ‘unemployed’ on the basis that these people would opt for ‘cash-based’ jobs given the opportunity to do so. The modified unemployment rate is shown below, and note now the unemployment rate is well over 60%. Table 2.8.2 Unemployment rate (treating village workers as unemployed)

Unemployed Total Labour force Unemployment rate

1990 21,460 32,627

1995 30,408 38,407

2000 31,356 40,556

2005 23,836 36,969

65.8%

79.2%

77.3%

64.5%

In the 2005 population census there was a question for those not formally employed whether ‘they are actively seeking a paid job, or not’. Out of the total labour force of 36,969, the people saying ‘yes’ is 12,924 so dividing this by the total labour force we get 35% as the unemployment rate. This would be more plausible given that not all people in the subsistence sector are likely to seek paid employment. But getting the exact unemployment rate is not the real concern—the problem is very much to do with so many unemployed people, mostly youths, who are starting to focus their energy and attention to violence or ‘unwanted’ activities, such as boarding overseas ships. As the table shows more than 20,000 people are ‘unemployed’ and this is increasing each year with more school

26


leavers, including school dropouts—despite the steady increase in the number of people employed over the years as shown in Fig….. Fig

Total employees: 2001--2006

16000

14000

12000

10000

8000

6000

4000

2000

0 2001

2002

2003

2004

2005

2006

years

Source: KPF records

The challenge for government therefore is to increase the opportunities for employment, whether within the country or overseas. As a matter of fact about thirty young nurses have been sent to Australia for training in early 2007 in order to obtain qualifications that can get them jobs in Australia or other developed countries. And more recently the ministry of labour has negotiated with New Zealand to accept I-Kiribati labourers—this is still ongoing. The Marine Training School has started taking on females as seawomen and so far no major complaints has been raised or heard.

2.9 Prices and Inflation In general the price movement or inflation rate in Kiribati is fairly subdued and this is because of the government price control policy that prevents prices of most basic items, like rice, sugar, kerosene, etc. from rising ‘unexpectedly’. As can be seen in the figure above the annual price changes rarely exceeds 5%, and as for the quarterly price changes, most would be around 1-2% (see fig below). Fig

Annual inflation rates by quarter: 1997--2007

8.00

6.00

4.00

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0.00 IV 1997

I

II

III IV

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-2.00

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27


What is interesting is the negative inflation rates in recent years. This would coincide well with the influx of Chinese products in the period. Chinese products are relatively cheap and while most are not part of the ‘basket of goods’ used in measuring the price indexes, they certainly provide substitutes or alternatives to goods people usually buy thus forcing the prices of the items in the ‘basket of goods’ to go down. The prominent rise of the price index in 2007 is due to the increase in price of imported fuel—this is further analyzed below. It is useful to note also that deceleration or subdued prices typically reflects lower economic activity or going into a recession period. Fig Quaterly inflation rates: 1996--2007 15.00

10.00

%

5.00

0.00

-5.00

tobacco transport all items

-10.00 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III 1997 1997 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Fig … above shows quarterly changes in prices of two major groupings (tobacco/alcohol and transport) with the third graph representing the ‘all items’ or the combined index. As can be seen sharp rises of tobacco/alcohol price occurred in early 2006 while for the transport sector, the increase occurred in 2006 and the second, and more substantial rise, occurred in early 2007. The first rise in 2006 was the ‘moderate’ response of the local fuel company (KOIL) to the significant rise of the world crude oil price from US$40 to US$70 per barrel, while the more recent rise was an overdue rise that was on hold for some time, i.e. the government finally decided to raise the local fuel price in early 2007 because of the continuing loss incurred by KOIL because of the high price of fuel from MOBIL and that is why the transport index rises dramatically in 2007 as shown in the graph. The indications are that the world price would remain around $70-80 per barrel for some time so we would not expect a decline in local fuel prices for the next 1-2 years—as matter of fact it is more likely there would be further increases in the local fuel price in the years to come.

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2.10 Education The budget allocation for the education sector in the period 2004-2007 was in the range of 21-25% of the government total recurrent budget. This large proportion indicates government continued support and commitment to education. One notable area of neglect, however, is ‘early child’ education. There was no specific budget for this but the ministry has in fact made three visits to the outer islands (S.Tabiteua, Butaritari, and Abemama) to conduct the ‘Child-Friendly’ programme and implementing the ‘early-child’ education curriculum. Of the total education budget, 28% went to primary education and 23% to junior secondary schools (JSS). In fact the allocation to JSS increased from 16% to 23% in the period 2004-07. The primary school population (6 to 11 years old) according to the 2005 population census is 9,994. The primary enrolment rate somehow declined in 2005 to 88%--previously it was above 100%17. This decline may need some investigation as to what is cause, especially noting government’s commitment to universal education in the country. The government support to senior secondary schools increased from 11% to 14% in the period under review, and support to tertiary education remains around 9%. The government curriculum unit (CDRC) improved the English syllabus in 2004 for primary schools and the unit also developed the Kiribati syllabus. The work on the JSS syllabus did not start because of funding constraint. The introduction of the new English assessment report to primary schools proved to be a worthwhile initiative. Several workshops were conducted on teaching, writing, and language skills so as to improve teachers capability. The KTC has made substantial changes to its training courses and the approach to the language course delivery was based on both, a formal and informal basis. The ministry made several visits to the outer islands to discuss with the teachers the new and effective teaching strategies. On scholarships, the ministry has formed a new scholarship board and this board has compiled a new scholarship policy which includes the establishment of an appeal committee. This committee is supposed to go over appeals made by students, especially on matters or decisions of the scholarship board that students are not happy with. The delivery of school furniture and school materials was fairly restricted because of funding constraint and so many schools are still having shortages of furniture and school materials—over 50% of the schools do not have

17

The enrolment rate sometimes is over 100% because of repeaters or simply because of slight errors in the counting, whether from census counting, or from teachers counting.

29


adequate number of furniture and school materials. For instance, a single text book would be shared between the teacher and 15 or more students. There was some concern on the students dropping out with no prospect of finding employment because of the lack of jobs available. In view of this there was a plan to include a vocational programme in the senior secondary schools but this did not happen because there were other priorities to attend to.

2.11 Health sector One of the ministry’s main tasks under the NDS 2004—7 was to come up with a population policy that would stabilize population by the year 2025. The write-up of the policy was completed in 2006 with the help of a consultant18, and this has been subsequently endorsed by Cabinet. However the document was given to the Office of the President (OB) for implementation purposes but up to now there has been no action taken. There are however activities stated in the policy document that have been undertaken by the Ministry of Health and Ministry of Finance. In relation to the shortages of medical drugs on the outer islands a review was taken to look at the current system of drug delivery to the outer islands, i.e. how the medical supplies were distributed to the outer islands. The review found that the problem was caused by some shortcomings of the procurement system in place and because of shortage of funds. Another follow up review was undertaken to find ways to improve the procurement and stock system. The construction of the hospital on N.Tabiteuea started in December 2006 and the estimated cost of the project is well over $5 million—this is being funded by Taiwan. Almost 30% of the construction works has been completed at this stage and the whole hospital is expected to be completed by mid 2008. With the problems of life-style or non-communicable diseases several public awareness programs were initiated—the funds came from the Kiribati government and external sources. In order to increase government revenue from medical services the ministry imposed charges on dental, X-Ray, and labarotary services and fees for medical certificates for people traveling overseas—this was implemented in 2006 and the amount collected that year was $ 6,000???. In early 2006 the ministry allowed local medical practitioners to carry out their private medical treatments using the hospital facilities. Whatever the practitioner received from his or her service some portion of it (10%) would be given to the ministry as some kind of fee for using the hospital facilities.

18

Chris Murray of the ANU, Australia who was funded by UNFPA??

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Public awareness programs on sanitation and human waste disposal continued and was carried out by both the Health and the Environment ministries. ??????????????????????

2.12 Environment (including land and agriculture) The ministry of environment, in addition to managing and monitoring the environment, is also responsible for sanitation and public health and most of the complaints received on these relate to roaming and scavenging pigs, especially in high densely populated places. There were also complaints of bad smell from sewerage manholes and also complaints of rubbish piling up and not collected by the Councils. Of the total complaints of 54 in 2004-2006 period, 90% were attended to. The ministry also initiated an environmental youth group, a voluntary group, that did some cleaning in public areas and demonstrated to the communities how to sort out waste into disposable and non-disposable or which to recycle, and which are not to be recycled. A primary school competition on waste disposal was also organized by the ministry. The ministry also conducted an awareness workshop on the usage of compost toilet and also provided training on the construct and the use of these toilets to households. With respect to the ‘illegal’ use of sand and gravels from the beach the ministry enforced the regulation by conducting routine patrol with police officers. The ministry also responded to environmental complaints by actually visiting sites of complaints. Two national workshops on the climate change impacts were conducted in April and November 2005 on S.Tarawa, and one on Christmas island in December 2005. These workshops relate to the NAPA19 project. The other workshops on the management of biodiversity, waste management, and land degradation were also conducted on some islands. In October 2003, a follow up workshop with the Kiritimati Island Government and private sectors and grassroots people on the National Biodiversity Strategies and Action Plan (NBSAP) project was executed to Kiritimati Island. However, due to financial constraints and high costs of transportations, participants from the other inhabited Line Islands (that is, Teraina and Tabuaeran in particular) were not able to attend this follow up workshop. Targeted stakeholders involved in this workshop include representatives from unimwane or old men; youths; well known fishermen; traditional medicine healers; women representatives from RAK (Kiribati Protestant Church), 19

National Adaptation Programme of Action.

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Itoiningaina (Catholic Church), Seventh Day Adventist (SDA) Church, Baha’I Church; livestock farmers (taan maniman), local farmers (taan ununiki), seaweed farmers, pet fish association, Captain Cook Hotel, Fisheries Division, Dive Kiribati, Private Guiding Services, Wildlife Conservation Unit, St. Francis High School, KPC Youth, Kiribati Oil Company Limited (KOIL), Copra Society and relevant Government Ministries. In October 2004, 30 representatives from the government, private sector, and local communities of Kiritimati Island joined with UNESCO staff and international experts to advance the Kiribati elements of the World Heritage Central Pacific Project. The workshop discussed the values and feasibility of nominating reef islands and atolls from Kiribati, particularly those in the Line and Phoenix Groups as World Heritage. The workshop agreed to include in the tentative list of Kiribati various islands and atolls from the Line and Phoenix groups encompassing globally significant seabird sites, coral reefs, and associated marine and terrestrial habitats. In 2005, the Kiribati Government declared all eight islands of the Phoenix Group as a protected area. The Phoenix Islands Protected Area of 184,700 km2, or PIPA, is the third largest marine protected area in the world. The Government of KIRIBATI with her partners in this initiative, New England Aquarium of the US and Conservation International, are working together on this innovative and sustainable model for large scale conservation in the Pacific Islands region. This is also the Kiribati Government’s commitment to help achieve the objectives of the Convention on Biological Diversity. In July 2005, a second follow up workshop was again executed to Kiritimati Island on the basis that there was a strong need to consult local communities on the outcomes of the 2003 follow up workshops, community consultations and surveys on the ethno-biodiversity of Kiritimati’s terrestrial and marine resources. This also included the need to consult local communities on the revised ‘Environment Bill 2005’ in which new parts- Part III- Wildlife and Part IV- Protected Areas and World Heritage have direct relations to the outcomes of the series of the Project’s workshops, consultations and surveys on the ethno-biodiversity resources. NBSAP Add On workshop was conducted back to back with the National Biosafety Project (NBF) and Ozone Depleting Substances (ODS) Project. In May this year (2007), the KIRIBATI Parliament passed the Environment Amendment Bill 2006. This has been assented to and the Environment Act 1999 (Amendment Act) more adequately addresses waste management and pollution control, Environment Impact Assessment and conservation and management of natural resources through protected areas and species. The Government of KIRIBATI through MELAD – ECD has also signed a number of international environmental conventions under the UN system to protect and manage the environment. MELAD – ECD is also working on fulfilling the Government’s commitments under these Multilateral Environment Agreements. Meeting these international obligations at the country level would contribute to safeguarding our national and local environment while contributing to the global environment.

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The environmental policy has not been completed and the regulations on other environmental issues are still being drafted. The Environment Amendment Act 2007 was passed in June this year (2007) and has been assented by ‘Te Beretitenti’ in early September 2007. The effort to mainstream or at least to highlight environmental issues and concerns into the national planning was still one of the priorities of the ministry in the plan period.

Land Division One of the tasks of the Land Division stated in the NDS 2004-07 was to update and correct the land register for the country, however the full implementation has not materialized because there were still outstanding issues to be addressed, such as: the creation of the ‘land registrar’ position; the writing of a prodoc for the computerization of land registers; uncertainty as to who is responsible, High Courts or the Lands Division? Another activity involved the setting up a task force to look into the issues of land use on S. Tarawa. In 2005 the S.Tarawa Road Access committee task was established and already the committee has proposed over 50 new access roads, and 21 existing roads to be upgraded. The compensation issue has been discussed but not yet finalized, and the consultations was still on going.

2.13 Public works

???????????????????

2.14 Communication With regard to transportation, the ministry has negotiated with Air Pacific to fly to Christmas once a week on its way to Honolulu. This air service started in 2004 with a charter cost of US$ 78,000 per week or roughly US$ 4 million a year. In return Kiribati government is to get the revenue for 24 seats for the route Nadi-Christmas-Honolulu (and return) and 1,000 kg on Air Pacific. The financial analysis produced by the Planning Office on this air service shows that the financial cost for maintaining the air service is more than the revenue generated by the arrangement, however this analysis is based on the data when the operation first started so it would be interesting and useful to have another analysis based on current data. There is indication, based on the

33


available data, that the passenger traffic to Christmas island from Fiji is picking up with ‘fishermen’ tourists coming from Australia. In 2006 the Kiribati Shipping Corporation purchased a second-hand vessel of 1,000 ton capacity, very much like Nei Matangare, and the plan is to have the vessel carrying cargoes between Tarawa and Fiji however since it arrived it has been used to collect copra from the outer islands. The financial situation of the company is a bit strained with the arrival of the ship given the high interest rate charged on the loan used to purchase the ship. With respect to the information technology (IT) there was some confusion as to who should be responsible for its development. However up to now the ministry of Communication is still very much in charge of telecommunication services, especially at the policy level. The period also saw the formation of the Telecommunication Authority of Kiribati (TAK), a separate and autonomous body tasked with the registration and supervision of telecommunication providers and users in Kiribati. This body, for instance, sets the CB radio standard, the capacity of the radio to be used, and the frequency range which people could use. In 2006 TAK also managed, in collaboration with TTI20 and USP21, to conduct a training workshop on website development and the general usefulness of the internet in. In the period under review the Betio port facility was upgraded but it still cannot accommodate bigger ships like container vessels and so the problem of offloading containers still remains. Telephone, facsimile and email services have been installed on eight outer islands: Makin, Butaritari, Marakei, Abaiang, Maiana, North Tarawa, Abemama, and North Tabiteuea. The plan is to install telecommunication services on all islands and TSKL22 is still work on the remaining islands.

2.15

Tourism

??????????????????????

2.16 Fisheries

?????????????????

2.17 Internal Affairs and Local government ?????????????????????? 20

Tarawa Technical Institute. University of the South Pacific. 22 Telecommunication Services Kiribati Limited. 21

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Chapter 3. Identifying Priority Issues In order to come with national priority issues the Planning Office within the Ministry of Finance and Planning organized and held several consultations with key stakeholders, such as government ministries and statutory bodies, public enterprises, private sector including civil societies and churches, and people on Christmas island since April 2007. Consultations with the island councils and key people from the outer islands (all together five) was made in September 2007 on S.Tarawa23. Because of time constraint the bulk of the consultations revolved around issues and constraints or areas of national interest with little time for strategies and activities—these were provided at a later stage, i.e. during the subsequent meetings with ministries.

3.1 Government ministry issues: The first consultation on the formulation of the new NDS was made between the Planning Office staff and government ministries and statutory bodies in April 2007 at the KPC conference room, Antebuka. All government ministries and statutory bodies were invited however some did not attend. The list of participants is attached in the annex. Those attended were later split into two working groups (Group A and B) so that the discussions would be more interactive and informative, and after an hour or so the two groups met in plenary to discuss their findings. The issues of both groups are shown below and they have been categorized into major sectors in order to facilitate the analysis and the discussion. Note that the grouping below is not strictly in line with the key policy areas groupings—allocating the issues raised into more appropriate key policy areas will be made in the next chapter, i.e. Chapter 4. Group A issues: Major causes of Social problems 1. 2. 3. 4. 5. 6. 7.

High rate of unemployment, and still increasing Overcrowding in urban centres (urbanization issue) Depletion and declining of natural resources Land scarcity Poverty (e.g. lack of opportunities) Health issues, e.g. increase in diseases, poor diet, HIV, TB, etc Decline in the attainment and quality of education

Environment 8. Increase in waste and pollution 9. Climate change (sea level rise) 10. Loss/decline of endemic species, invasive alien species (biodiversity and conservation issues) 11. Erosion and mining of coastal areas

23

The consultation was held while the councillors and island representatives were on S.Tarawa attending a meeting organised by the SDGK project, a UNDP funded project that is being implemented by the Ministry of Internal Affairs (MISA).

35


12. Most developments do not comply with environmental regulations or rules, i.e. enforcement of environmental regulations is weak or non-existent 13. Decline in the quality of land water and the lagoon, also water supply is limited Infrastructure 14. Inadequate number and quality of classrooms, furniture, and other school facilities (e.g. playing fields, gyms, etc) 15. Poor and substandard status of ship ports (on S.Tarawa policing and security is lacking) 16. The ‘running down’ or deteriorating status of government infrastructure, including those on the outer islands, e.g. government offices, quarters, roads, etc. 17. Poor transport service (e.g. infrequent and unreliable flight service, high fares, etc) 18. Telecommunication service (e.g. internet, telephone, TV, etc) very expensive and unreliable 19. Generally maintenance on government infrastructure is infrequent and ad hoc Economic development 20. Generally low production within the country, even the production on the outer islands seems to be declining, also the few existing productions are of inferior quality 21. Private sector is small and undeveloped 22. And most public enterprises are inefficient 23. Under utilization of natural resources, especially marine resources 24. Lacking of appropriate legal framework 25. Low investment, especially in manufacturing and tourism 26. Financial resources (e.g. government revenue sources) very limited 27. The labour force lacks relevant and appropriate skills Group B issues: 1. All those issues raised in the NDS 2004—2007 Plus 2. High Unemployment rate 3. Need better governance, especially accountability and transparency 4. Issues of Urbanization: e.g. juvenile delinquency, insecurity, ‘unhealthy’ environment, and ‘unplanned’ housing 5. Existence and the rise of domestic violence 6. Land issues, e.g. dispute over land boundaries, and complex land tenure 7. Manipulation of dates of birth in order to suit personal agenda, such as retirement age, elderly payments (i.e. government grant to people 70 years and over) 8. Weak institutional setups of government, island councils, and non-government bodies 9. Excessive supply of copra on the outer islands, and other problems with the copra industry, e.g. transport, and payment arrangement)

3.2 Public enterprise issues: 1. Inferior and costly local products, not ideal for exports 2. Lack of working capital for public enterprises 3. Lack of human resource capacity in operating businesses, no objectives and no commitments to targets by employees 4. Strong government regulation on prices or tariffs 5. Poor infrastructure and lack of facilities, in particular the transport infrastructure (e.g. shipping, airlines, roads, ports, etc) 6. Lack of electricity on the outer islands 7. Telecommunication services slow and very expensive, in particular on the outer islands 8. Very low export base 9. Lack, or poor status, of electricity on the outer islands

36


10. Lack of capacity to upgrade hotels/motels facilities to attract tourists 11. Lack of knowledge and awareness of the benefits from insurance service

3.3 Non-government bodies issues (KANGO, churches, civil societies): 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Over population High unemployment Climate change Water and sanitation High incidence of HIV and TB cases Increase in lifestyle diseases Increase in youth problems Gender imbalance/mainstreaming Declining in literacy level Inefficiency and attitude of government employees Sea level rise Urbanization Low economic growth Imbalance of government fiscal position Governance, transparency, and accountability issues Privatization, decrease government intervention in the market Erosion of culture and traditional values

Other comments include having a long term vision in the plan (say 12 years) and using the word ‘Plan’ in place of ‘Strategies’.

3.4 Private business issues 1. Crowding out effect of government borrowing (through its own high OD and guaranteed loans to public enterprises) 2. Shortage or inadequacy of import levy subsidy—adversely affecting profitability of the private businesses 3. Port infrastructure, especially on the outer islands is poor, yet charges are relatively high 4. Crowding out impact of public enterprises, especially in areas where the private sector is involved in, e.g. wholesaling and retailing and wholesaling 5. Implementing wrong policies, e.g. forcing BKL to take on the bankrupt or insolvent companies: Abamakoro Trading (ATL) and Atoll Motor Marine Service (AMMS) 6. Lack of government support or incentives to pilot projects or new businesses 7. Reaching out to overseas market is difficult and a body dedicated to this role is required 8. Government support is required to assist in improving local products 9. Private businesses pay heavy taxes while public enterprises generally do not pay taxes 10. Elaborate and excessive island council charges on businesses, e.g. high registration fees, and charging individual buses or trucks within the same business 11. Very high import licenses 12. Lack or shortage of qualification and skill in the private sector 13. Refunds or payments from the Ministry of Finance is sometimes delayed or made in phases rather than one lump sum

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3.5 Christmas island issues24 Three staff of the Planning Office visited Christmas island in September 2007 to discuss with government officials and the communities issues or problems that they want to be addressed within the next four years. As with other consultations the issues raised were very similar to previous issues like ‘high unemployment’, ‘decline in natural resources’, ‘rise in youth problems’, etc. The consultations were carried out in two days, the first day with government officials and the second day with the communities, including private businesses. Private sector or non-government sector Group A 1. Land issues, e.g. plenty of land but not properly utilized; land lease very expensive; no ownership given to lessee so no real improvement can be made to the land 2. High unemployment rate—limited jobs 3. Needs to empower women, through education and training, and a centre where they can organize their tasks and activities 4. Decline in natural resources, especially fish 5. More support needed to the wildlife conservation including migratory birds 6. Lack of institutional capacity of the local council 7. Youth problem on the rise 8. Shortage of imported goods (cargoes) 9. Shortage of copra funds 10. Inadequate number of high school teachers Group B 11. Increasing population 12. Increasing incidence of HIV and TB, and other non-communicable diseases such as: diabetes, high blood pressure, heart diseases 13. Increasing squatters 14. Significant rent arrears 15. Poor infrastructure 16. Fish quantity declining 17. Limited area and capacity of the ‘solar salt ponds’ 18. Declining number of birds 19. Poor economic infrastructure, e.g. airport; shipping port; telecommunication; and power (electricity) 20. Low tourism 21. High unemployment and increasing juvenile delinquency 22. Slow development in fisheries 23. Lack of coordinated approach to planning and policy formulation 24. Government businesses competing with private businesses 25. No support to freight expenses between Tarawa and Teraina and Tabuaeran Government and public enterprises issues Group A 1. Poor infrastructure 2. Lack of tourism 3. High unemployment 24

The trip to Christmas island was funded from AusAid, at least the fares and the allowance of two staff.

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4. 5. 6. 7. 8.

High incidence of juvenile delinquency Lack of fisheries development Poor status of housing and lack of regular maintenance (lack of funds) Coastal erosion Lack of coordination on development issues, i.e. many government divisions doing their own activities as guided by their parent ministries or parent companies located on S.Tarawa

Group B 9. Increasing number of people coming from the Gilberts group 10. Increasing incidence of HIV and TB, and other non-communicable diseases such as: diabetes, high blood pressure, heart diseases 11. Increasing number of squatters 12. Increasing rent arrears 13. Poor infrastructure Group C 14. 15. 16. 17. 18. 19.

Poor communication and transport infrastructure and service Poor environmental management, e.g. on waste disposal; wildlife; and bush fire Degradation and depletion of marine resources Poor quality of water supply There is plenty of land but access to it is very difficult Lack of tourism infrastructure and the low number of tourists visiting the island

3.6 Outer island issues These issues were raised by participants from the outer islands when they visited Tarawa for the workshop conveyed by the SDGJ project within MISA on 22 September 2007. There were five participants from each island: Chief Councilor; the council clerk; the island project officer; and representatives from the women groups and the ‘old men’ (unimane). 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

Poor and inadequate transport means Poor port facilities, including ship passages (e.g. no beacons or sign posts, etc) High cost of imported goods Absence of wholesalers on some islands, in particular on islands where secondary schools are located Lack of business knowledge and skills (including women who want to start up their informal businesses) Need government support for pre-schools (including teachers training, facilities, etc) Need improvement to the telecommunication services Poor status of roads Lack of maintenance of government offices and quarters (including island councils) Frequent shortages of medical supplies and shortage of staff Inadequate supply of school stationeries and equipment and the lack of qualified teaching staff Lack of agricultural staff and equipment Inadequate supply of water (in particular on Banaba) Poor sanitation, especially in schools and public places Empowerment of women Youth problems, related to alcohol consumption and abuse Poor maintenance of airstrips and the absence of airstrip on Banaba Poor status of clinics, and the absence of clinic on Banaba Inadequate government support grant to island councils Lack of cash employment opportunities Decline in agricultural activities and production (e.g. decline in coconuts) Shortage of local foods on S.Tarawa

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23. Inadequate of government salaries 24. Coastal erosion 25. Encroaching of sea water into land water lenses makes it very difficult to plant trees and food crops 26. Shortage of cash on the outer islands 27. Limited number of private businesses, especially on fisheries (e.g. shark-fins) 28. Difficult access to S.Tarawa market (e.g. transport, storage, market place, agents, promotion, etc) 29. Frequent shortages of imported goods on the outer islands, including fuel 30. Copra issues, in terms of transportation to Tarawa and shortage or lateness of cash payment 31. Delays of project implementation and completion due to the shortage or lateness of materials from Tarawa 32. Lack of sporting areas and facilities 33. Lack of fishing buoys (anchorages) 34. Increasing price of fuel 35. Lack of youth employment 36. High dependency on ‘unhealthy’ imported foods

3.7 Abemama island issues While the SDGK project team within the MISA ministry was making its visit to the various islands, it extended an invitation to the Planning Office to take part in the visits. Two staff25 from the Planning managed to go with the MISA team and below is a list of issues which they got from the visit. Unfortunately no staff from the Planning joined the other teams that went to Makin island and Tabiteuea island. Group 1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

25

Poor roads Coastal erosion Shortage of imported goods (cargoes from S.Tarawa) Late payments for copra Delayed and shortages of medical supplies lack of government support towards pre-schools Increase of alcohol consumption (especially among the youths) Increase of school fees, especially for secondary schools Continued increase of imported goods prices, including fuel price Increasing population Delays in collecting copra from the outer islands

One staff from the Planning office was funded from AusAid, and the other from the SDGK project.

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From the list of issues above it is quite clear that the priority issues are still very much the same as the issues stated in the past strategic plan (NDS 2004—07). On the basis of these issues six key policy areas have been identified, and these are shown below: 1. 2. 3. 4. 5. 6.

Economic growth and poverty reduction Education Health Environment Governance Infrastructure

Obviously these key policy areas are very similar to the previous policy areas, as matter of fact, the only difference is in the ‘broad titles’. For instance, the previous plan uses the term ‘equity distribution’, ‘equipping people to manage change’, ‘sustainable use of physical resources’ etc. whereas this plan simply use ‘education’, ‘health’, ‘governance’, etc. One major reason for the change in the titles is because these are simpler and easier to associate with current government roles and functions, for instance we know that issues under ‘Education’ are most likely to be addressed by the Ministry of Education. Likewise, issues under ‘Health’ are most likely to be addressed by the Ministry of Health. Now with the key policy areas identified, we need now to put the issues raised in the consultations under each policy area. These are provided below. KEY POLICY AREAS 1. Economic growth and Poverty reduction

PRIORITY ISSUES RAISED

1. Low production of monetary economy and subsistence output 2. High rate of unemployment 3. Poverty (lack of opportunities) 4. Private sector is small and undeveloped 5. Most public enterprises are inefficient 6. Under-utilization of natural resources, in particular marine resources 7. Deteriorating government financial position 8. Lacking appropriate legal frameworks 9. Low investment 10. Financial resources for development is very limited 11. Labour force lacks critical and relevant skills (e.g. marine scientists, marketing managers, civil engineers, etc.) 12. Inferior and expensive local products, in particular the manufactured products 13. Some government intervention seem excessive (on prices, tariffs, etc) 14. Export base is very limited 15. Lacking infrastructures and support to attract tourists 16. Lack of understanding on the benefits of insurance service 17. Crowding-out impact of government borrowing or guarantees 18. Lack of government incentives to new businesses 19. Lack of government initiative to secure overseas markets 20. High taxes on businesses

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21. Elaborate and excessive government and island council charges, e.g. import duties, registration fees, business licenses 22. Lack of land for businesses 23. Very limited area and capacity for solar salt production 24. Low tourism activities 25. Lack of coordinated approach to planning 26. Lack of agricultural staff and appropriate equipment (tractors, shovels, pick, wheel barrows, etc) especially on the outer islands 27. Difficult access to urban markets 28. Increasing fuel costs 29. Inadequate marine and fishing aids, e.g. boat passages, beacons, buoys

2. Education

1. Decline in education attainment 2. Decline in literacy level 3. Decline in quality of education 4. Lack of relevant skills for the private sector businesses, e.g. business skills, 5. Lack of government support to pre-schools, teachers, facilities 6. Inadequate status of classrooms and furniture 7. Inadequate supply of school stationeries and equipment on the outer islands 8. Lack of qualified teaching staff 9. Lack of sporting areas and facilities 10. High school fees

3. Health

1. Increasing trend of HIV and TB diseases 2. Increase in lifestyle illnesses or non-communicable diseases, diabetes, high blood pressure 3. Poor diet 4. Over population, especially in urban centres 5. High population growth rate 6. Frequent shortages of medical supplies 7. Shortage of medical staff 8. Lack of sporting activities 9. High dependency on imported foods

4. Environment

1. Depletion and declining natural resources (including wildlife birds) 2. Overcrowding in urban centres 3. Land scarcity 4. Increase in waste and pollution 5. Climate change (sea level rise) 6. Loss/decline in endemic species 7. Invasive alien species 8. Lack of support to wildlife conservation 8. Erosion and mining of coastal areas 9. Non-compliance of developers and people to environmental regulations 10. Shortage of water supply and decline in quality of land water, especially on S.Tarawa and Banaba 11. Decline in quality of lagoons 12. Increasing waste and pollution 13. Poor sanitation 14. Increasing squatters 15. Over population in urban areas

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5. Governance

1. Need better governance, more accountability and transparency, especially within government 2. Increasing juvenile delinquency (or youth problems) and insecurity, especially in urban centres 3. Rise of domestic violence 4. False declaration of date of birth, and other civil information (marriages, births, etc) 5. Weak institutional setup of government, island councils, and other administrative bodies 6. Mismanagement and inefficiency within copra industry 7. Gender imbalance and mainstreaming 8. Generally slack and poor attitude of public employees 9. Dominance and unfair competition of public enterprises in commercial undertakings 10. Erosion of culture and traditional values 12. Crowding-out impact of government borrowing and guarantees and public enterprise undertakings 13. Inadequacy of freight levy receipts to offset transport cost to outer islands, in particular Teraina and Tabuaeran 14. Imposing social obligations on commercial entities, in particular public enterprises 15. Elaborate and excessive island council charges 16. Slowness in refunds and other financial transactions by the Ministry of Finance 17. Land issues, e.g. utilization, ownership, transfer and lease arrangement, 18. Needs to empower women and support their activities 19. Frequent shortages of basic commodities, e.g. rice, sugar, fuel, etc. 20. Frequent shortages of copra funds on the outer islands 21. Significant land arrears, especially on Christmas island 22. Lack of coordinated approach to planning and policy formulation 23. Proper plan for resettlement, in particular to Christmas island 24. Housing problems, especially on S.Tarawa and on Christmas island 25. Lack of wholesalers on some islands 26. Inadequate government support grant to island councils 27. Low government salaries or wages 28. Shortage of cash on the outer islands 29. Delay of project implementation on outer islands due to delay in shipping 30. Lack of sporting and recreational facilities, e.g. playing fields, tennis courts, etc

6. Infrastructure

1. Inadequate number of classrooms and furniture 2. Poor ship ports and dock facilities 3. Deteriorating status of government buildings, including those on the outer islands 4. Poor transport service (air service, shipping service, ports, terminals, etc) 5. Limited and expensive telecommunication services (telephone, internet, etc) 6. Lack of maintenance on roads, wharves, causeways, etc. 7. Lack of electricity on outer islands 8. Poor sanitation infrastructure, e.g. public and school toilets, 10. Poor status of government housing 11. Lack of tourism infrastructure 12. Inadequate shipping and boating passages, the depths, the

43


docks, etc 13. Absence of airstrip on some islands, e.g. Banaba 14. Lack of clinics or poor status of clinics on the outers islands, including Banaba

While there seems to be so many issues under each key policy area, the reality is that some of the issues are interrelated and some are in fact strategies or activities. In the next section we will try to put all these issues under proper headings, such as: ‘Issues’, ‘Strategies/activities’, ’Responsible (implementing) ministry’, and ‘Development partners’. That is, the next chapter will try to put the issues in a more coherent and systematic basis as to have the framework of the plan for the next four years. This will be arranged in matrix format.

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Chapter 4: The NEW PLAN (KSDP): 2008-20011 Based on the issues raised during the consultations with various stakeholders (see Chapter 3), and on the various sector plans that we received from ministries, we derive six broad key policy areas: 1. 2. 3. 4. 5. 6.

Economic growth and poverty reduction Education Health Environment Governance Infrastructure

We consider these thematic areas as fairly comprehensive and encompassing and very much in line with peoples areas of interest and concern. Under each of these key policy areas we have the ‘Issues/constraints’ and ‘Strategies’. This chapter is therefore a very important focal point of the plan because it contains the ‘issues’ to be addressed and the ‘strategies’ to be adopted within the next four years. Note that the ministry names have been shortened in order to save space, for example, instead of Ministry of Finance and Economic Development, the word ‘Finance’ will be used, likewise instead of ‘Ministry of Communication, Transport and Tourism’ we will use only ‘Communication’. On the other hand the use of the acronyms, such as MCTTD, MCIC, MELAD, etc. could be very confusing especially as they involve a lot of names, and some are quite similar. In short, very concise names—names that people are very familiar with, such as ‘Finance’, ‘Education’, ‘Health’, ‘Works’, etc. are considered to be more appropriate. This chapter is divided into two parts, part A and part B. Part A shows ‘key policy areas’, ‘issues to be addressed’, ‘broad strategies’, ‘responsible ministries’, and ‘development partners’, and part B shows sector plans in more detail. But rather than putting all the sector plans here the idea is to put only the sector plans that relate to productive sectors—sectors that have the potential to generate substantial income for the country, and given our large ocean and beautiful islands, the two most promising areas are: fisheries and tourism. If everything goes well with these two sectors, then we could expect substantial inflow of income from abroad through fish and marine exports and through tourism receipts. These incomes could then be used to support government social policies such as the provision of health, education, youth services, etc. But developing these two sectors requires sacrifice and commitments in terms of effort, time and resources. For instance, tourism requires good airports and terminals and an extensive range of transport and accommodation services. Electricity and water supply should be available and reliable so as not to create inconveniences to visitors and the beaches to be generally clean and refreshing to walk on. All these require substantial investment and effort on the part of the government but once these infrastructures and facilities are in place then the benefits to the country, in terms of foreign exchange earnings and employment, will increase tremendously. Likewise investing in fisheries is expensive but the returns


could easily cover the initial capital costs because Kiribati has comparative advantages in both these sectors. In the following matrix, the ministry that comes first is the ‘leading’ or the main ministry responsible for that particular strategy—the other ministries are supporting ministries.

A. KEY POLICY AREAS and BROAD STRATEGIES 1. ECONOMIC GROWTH AND POVERTY REDUCTION Because this is a very important policy area, in terms of generating more income for the country, more details of the strategies will be shown in Part B, in particular on fisheries, tourism and agriculture. Issues

Strategies

Responsible ministry/body Fisheries CPPL27 Environment

Development partners FFA, FAO, SOPAC, SPC, UNDP, EU, Taiwan

1. Low economic growth

1. Develop and commercialize the fisheries and marine resources26

2. Develop and further enhance tourism, in particular in the Line and Phoenix group

Tourism, Linnix Communication

SPTO, ADB AUSAID, GEF,

3. Stimulate and expand the private sector

Commerce, Labour, Finance

UNDP, ADB, Forum, AUSAID, World Bank

4. Revitalize the replanting of stable food crops on all the islands, including S.Tarawa—the ‘Green Revolution’ project

Agriculture, Environment, Internal Affairs, Island councils,

FAO, SPREP, GEF and Taiwan

5. Encourage human resource development, especially in the productive sectors

Labour Education, PSO28

AUSAID, NZAID, Taiwan, ILO, UNDP

6. Develop and improve economic infrastructures (e.g. airports, terminals, roads, shipping, telecommunication, utilities, etc)

Works, Communication PUB29

Japan, Taiwan AUSAID,

26

Refer to Part B where more strategies and activities will be shown. Central Pacific Producers limited, the government owned fishing company. 28 Public Service Office, the main office responsible for personnel and staffing matters. 29 Public Utilities Board, the authority responsible for electricity, water and sewerage. 27

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2. High unemploymen t Rate

4. Low investment in productive sectors

7. Improve and enhance efficiency of public enterprises

Finance

AUSAID, NZAID, PFTAC,

8. Improve statistics and relevant information for planning and policy formulation (including MDG reporting)

Finance Health Education

UNDP, UNFPA, UNICEF, SPC, PFTAC

1. Expand and enhance the Marine Training School and the Fisheries Training Centre

Finance Labour, Fisheries

NZAID, Germany, Japan

2. Stimulate and expand the private sector

Commerce, Labour Finance Tourism

UNDP, ADB, Forum, AUSAID, World Bank

3. Improve education standards and encourage students to study subjects and skills that are in demand

Education PSO Labour

AUSAID, NZAID, Taiwan, UNESCO

4. Explore and pursue employment opportunities overseas

Labour Foreign Affairs

AUSAID, NZAID, Taiwan, Korea, Germany, Japan, Forum

5. Initiate training programmes for small informal businesses and self employment 1. To encourage private sector to invest in real or productive industries

Commerce Labour

ILO, Forum

Commerce Finance

Forum, ADB World Bank

2. To arrange for more credit institutions or facilities so that the private sector has adequate finance for real investment

Finance, DBK

PFTAC, ADB, World Bank

3. To invest in economic infrastructures, such as in electricity, water, transport, etc.

Works, Communication Finance

Japan, ADB, Taiwan, EU

4. To provide incentives, support and protection to pilot development projects or new businesses

Finance, Commerce Office of President

Forum

5. Establish an effective unit or Commerce organization to explore and secure Foreign Affairs overseas markets

Forum, EU

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5. Large Trade Deficit

6. Increasing price of imported fuel (energy issue)

6. To reduce public sector excessive borrowings (and bank guarantees) from local finance institutions

Finance

1. Diversify and broaden production and export base (e.g. solar salt ponds on Christmas island, copra mill, pet fish, seaweed industry, etc)

Commerce Fisheries, Agriculture, Linnix

Forum, UNDP, FFA, FAO, ADB, EU

2. Reduce imports through importsubstitution and promotion of local produce

Commerce, Fisheries, Agriculture

Forum, SPC, FFA, FAO, UNDP

3. Improve quality and promote local products to tourists and overseas markets

Commerce, Tourism

Forum, ADB, UNDP

4. Encourage private sector participation and foreign investment

Commerce, Finance

Forum, UNDP ADB

1. To seek alternative sources of energy, such as solar power, wind energy; bio fuel; etc.

Works, Solar Co.

UNDP, Forum, AUSAID, EU

2. Promote and encourage the use of fuel- efficient plants, machinery, and equipment (including vehicles)

Finance Works Energy

EU, Forum, Japan

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2. EDUCATION The ‘strategies’ indicated here are actually ‘GOALS’ in the Education Sector Strategic Plan 2008-2011. For more details of the strategies, see the Education Sector Plan. Issue

Strategies

1. Decline in 1. Develop more appropriate education school curriculums standards and quality 2. Improve education physical infrastructures and provide adequate school stationeries and equipments

2. High rate of school dropouts and discontinued students

Responsible Development ministry/body partners AUSAID, Education UNESCO Education, Works, Internal Affairs

AUSAID, UNICEF, Japan, Taiwan

3. Train and upgrade school teachers and educational managers

Education, KTC30

AUSAID, NZAID

4. Improve and enhance education policy framework, statistics and planning system

Education, OB31, Finance

AUSAID, UNICEF

5. Strengthen relevant legislations and school auditing process

Education and AG32

AUSAID

6. Strengthen and enhance partnership with communities and raise public awareness of education policies and initiatives

Education, Internal Affairs

AUSAID, UNICEF

7. Develop and enhance sport facilities in schools

Education, Internal Affairs

AUSAID, UNICEF

1. Encourage setting up of private schools, especially senior secondary schools

Education Internal Affairs Churches

AUSAID NZAID UNICEF

2. Establish and promote vocational training centers for school leavers dropouts

Labour Education

AUSAID NZAID UNICEF, ILO

3. Promote partnership with communities including churches

Education Internal Affairs Churches Island Councils KANGO

UNICEF SPC

30

Kiribati Teachers College. Office of the Beretitenti 32 Attorney-General Office 31

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3. HEALTH The bulk of the strategies shown here are taken from the Ministry of Health Strategic Plan 2008—2011, so for more details the Strategic Plan should be consulted. Issues

Strategies

1. High child mortality rate

1. Encourage better nutrition and breastfeeding through awareness programmes

2. High maternal mortality rate

3. Increasing incidence of TB cases

Responsible ministry/body Health

Development partners UNICEF, WHO, SPC

2. Strengthen the implementation of IMCI* programmes

Health

WHO, EU, UNICEF

3. Maintain and increase coverage of immunization, vitamin A and “de-worming” programmes

Health

UNDP, WHO, UNICEF,

4. Develop and implement strategies to promote safe water and improve sanitation to improve child survival

Health, Environment PUB

SPC, UNICEF WHO

1. Improve midwife training programme

Health

EU, WHO

2. Provide quality adequate skilled care attendants during prenatal, childbirth and postnatal

Health

UNICEF, WHO UNDP

3. Introduce a strategy to reduce Chlamydia among pregnant women

Health

UNICEF, WHO, UNDP

4. Disseminate information and provide training on women’s specific health issues needs: cervical cancer, maternity care, etc

Health

UNICEF, WHO

1. Improve TB control programmes through DOTS (disease observed treatments)approach

Health

AUSAID, SPC

2. Increase national awareness and capacity through partnership with civil society

Health

SPC, WHO

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4. Increase in the incidence of noncommunicable diseases (NCD)

5. Increase in the incidence of HIV/AIDS

6. Increase in sexually transmitted diseases

7. Increase in hepatitis cases

3. Promote preventive measures through workshops, posters, radio, announcement, etc

Health

SPC, WHO

1. Revise and implement the NCD prevalence plan

Health

WHO, UNICEF,

2. Improve the outreach of the NCD services : diabetes, etc

Health

SPC, UNDP

3. Provide training and capacity building to staff

Health

WHO, SPC, UNICEF

4. Improve awareness on the root causes and impact of NCD 1. Introduce HIV/AIDS treatments and prevention

Health

WHO, SPC, UNICEF

Health

WHO, SPC, UNDP

2. Develop training course and build capacity for caring HIV patients

Health

UNDP, WHO

3. Promote practices that reduce the risk of HIV infection

Health

UNDP, WHO

4. Build capacity to effectively implement HIV education programmes

Health

WHO, UNDP

5. Increase availability of quality sexual and reproductive health services for youth

Health

UNDP, WHO

1. Improve diagnostic skill, prevention and treatment

Health

WHO, SPC, UNDP

2. Establish sexually transmitted disease centres

Health

WHO

3. Conduct surveillance and counseling services

Health

WHO, UNICEF

4. Increase awareness of such diseases

Health

WHO, SPC

1. Promote awareness of the seriousness of hepatitis and preventive measures, e.g. use of clean water

Health PUB

UNICEF, WHO

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2. Order appropriate drugs

Health

3. Expand immunization programme

Health

4. Encourage use of local medicine

Health

1. Improve the quality of health information as a tool for planning and decision making in the allocation of resources (staff, medical supplies, data on health issues, etc)

Health,

UNICEF SPC, EU

2. Implement recommendations from review of outer island drug order system.

Health

UNICEF

3. Improve and enhance communication between outer islands and the main hospital (Nawerewere)

Health

EU, UNICEF

9. Lack of or poor status of medical clinics on the outer islands

1. Construct and maintain clinics on the outer islands

Health Island Councils

EU, FSM33

2. Train staff to look after and maintain well the clinics

Health

EU, WHO

10. Increasing population

1. Promote use of family planning techniques, e.g. use of condoms, contraceptives, lunar cycles, etc

Health, Churches KHFA34 KANGO35

WHO, UNFPA, SPC

2. Inform schools and public about implications of over population, e.g. smaller income per capita over time; more services and amenities; decline in resources, etc.

Education Health Churches

WHO, UNICEF, SPC

8. Shortage of medical supplies

3. Formulate feasible plans to Internal Affairs, redistribute population so that Land division, congestion and squatters do not materialize * Integrated Management of Childhood illness (IMCI)

WHO, UNICEF

NZAID, ADB

33

Fiji School of Medicine Kiribati Health Family Association 35 Non-government coordinating body. 34

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4. ENVIRONMENT Issues

Strategies

1. Decline or depletion of natural resources

1. Encourage replanting of both stable food crops and other native plants—e.g. the Green Revolution project

2. Threatened island biodiversity (i.e. plants, animals, and living systems)

Responsible ministry/body Agriculture Environment

Development partners UNDP, ADB, Taiwan, GEF, FAO, SPREP

2. Continue and expand fisheries projects on marine species ‘hatcheries’ or ‘nurseries’

Fisheries

FFA, SPC, FAO, Taiwan

3. Draft appropriate legislations and regulations on the protection and conservation of agricultural and marine resources

Fisheries, Agriculture, Environment

FAO, SPREP, GEF

4. Develop and promote ecotourism, in particular in the Line and Phoenix group (e.g. PIPA)

Environment Tourism

SPTO, GEF, New England Aquarum

1. To implement Kiribati National Biodiversity Strategies and Actions Plan (NBSAP)

Environment

SPREP

2. Replanting of stable food crops, traditional herbal medicinal, cultural and other important native plants/ trees

Agriculture Environment

FAO, GEF,

3. Enforcement of the Environment Act and regulations

Environment

4. To prevent the introduction of dangerous foreign species

Environment

5. To establish and formalize the national Environment Advisory Committee (EAC)

Environment

6. Develop and promote ecotourism, in particular on Christmas island and other designated Protected Areas

Environment

ADB, GEF

7. Revise and update the

Environment

SPREP

SPREP

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2. Increase in waste and pollution

3. Decline in quality and supply of ground water

Wildlife Conservation Ordinance

AG36

8. Strengthen enforcement of the Wildlife Conservation Ordinance

Environment Police

9. Establish community based conservation initiatives

Environment Internal Affairs

SPREP

1. Implementation of solid waste management strategies

Environment Island Councils

SPREP, NZAID

2. Enforcement of Environment Amendment ACT

Environment AG

3. By utilizing International and Regional convention (MEA) to obtain assistance

Environment

SPREP

4. Increase public awareness on waste disposal and reducing pollution

Environment

SPREP

5. Incorporate environmental issues in school curriculums

Environment Education

UNDP, SPREP

6. To revise and implement national marine oil spill contingency plan

Environment

SPREP

7. Support and promote existing recycling operations e.g. Kaoki Maange project

Environment Health

SPREP

8. Development and Implementation of NIPStockholm Convention

Environment

1. Consolidation and coordination of national water quality guidelines

Works Environment, KAP37

AUSAID, World Bank

2. To enhance the water quality monitoring system

Works Environment, PUB

AUSAID, World Bank

36

Attorney-General Office. Stands for Kiribati Adaptation Project, World Bank initiative funded by GEF and Australia government 37

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4. Coastal erosion

5. Urbanization39 (in particular S. Tarawa and on Christmas island))

3. Public awareness on the sustainable use of water and the protection of water reserves

PUB Works, Environment

UNICEF, AUSAID World Bank

4. To enforce water regulations as stated in the Environment Act

Environment PUB

SPREP, UNDP AUSAID Forum,

5. Enhance capacity of PUB section that deals with water

Works, PUB

AUSAID UNICEF

6. Secure and fence off more water reserves

Works, PUB

1.Encourage the replanting of mangroves and other shoreline trees

Environment Agriculture

GEF, SPREP, Forum, Japan

2. Impose and enforce rules and proper management of sand mining

Environment Fisheries

SPREP, World Bank, SOPAC

3. Explore other sources of sand mining for local use (e.g. mining aggregate project)

Fisheries, Environment

EU, SOPAC

4. Undertake studies to understand the impact of climate change on coastal erosion (e.g. KAP project)

Environment OB38 KAP project

World Bank AUSAID SOPAC

1. Promote proper town planning

Internal Affairs

AUSAID, NZAID, ADB

2. Upgrade and maintain water and sanitation systems

Works, PUB

ADB, NZAID, AUSAID,

3. Expand and maintain decent housing and road systems

Works, Housing,

Japan, Taiwan ADB

4. Promote efficient waste management

Environment Island councils

NZAID, SPC SPREP

5. Ensure ready and

Works,

NZAID, Japan

38

Office of the President. A project document titled ‘Kiribati Urban Renewal Program Scoping Study’ done by NZAID explains the strategies regarding ‘urbanization’ in more detail. 39

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6. Negative impacts of development projects

continuous supply of electricity

PUB

6. Institute effective crime prevention strategies, involving community participation

Police, Island Councils

NZAID, UNICEF

7. Outer island growth centre project (e.g. Christmas island project)

Finance Linnix Internal Affairs Lands Environment, Police AG

ADB, Japan NZAID

1. Enforcement of Environment (Amendment) Act 1999 & Environment Regulations.

SPREP, GEF

2. Increase awareness on environment Act

Environment Education AG

SPREP, UNDP, GEF

3. Basic training to Ministries’ & Outer island project officers on EIA procedures

Environment Works Internal Affairs Finance

SPREP, UNDP, GEF

4. To enforce environment considerations on large developmental projects

Finance Environment

SPREP, UNDP, GEF

5. GOVERNANCE 56


Issues

Strategies

1. Slow auditing work

1. Train more Audit Staff in appropriate auditing skills 2. Increase number of Audit staff

Responsible Ministry/body NAO40

NAO

NAO 3. Institute and enforce requirements for early submission of annual accounts from government and public enterprises 2. Absence and 1. Review, update and develop OB, outdated legal of regulations/legislations and AG frameworks and strengthened enforcement poor mechanism at all levels enforcement 2. Promote awareness and AG, understanding of legislations Judiciary and regulations through Police seminars, workshops, and education system

3. Inadequate attention to women problems/ concerns

4. Increase in youth problems

40

Development Partners UNDP

UNDP,

AUSAID, ILO

Police AG Judiciary

AUSAID, ILO

Internal Affairs, Finance

UNICEF, ILO

2. Conduct public awareness programmes to reduce incidence of violence against women

Internal Affairs, Police

UNICEF, ILO

3. Improve police services towards women problems 1. Provide youth counseling/conferencing

Police AG Education, Internal Affairs, Police

AUSAID, ILO

3. Involve the police and other relevant authorities in the management and enforcement of legislations and regulations 1. Increase and promote the importance of women contribution to socio and economic development of the nation

AUSAID, UNICEF

2. Conduct operations to deter Police, and prevent underage drinking Internal, Affairs and alcohol abuse within the community

UNICEF

3. Provide support to the

UNICEF

Education,

National Auditing Office

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5. Inadequate managerial and planning skills of island councils 6. Lack of data or statistics for effective planning and policy formulation

7. Non compliance to PAC42 recommendatio ns

delivery of services for Youth and Sport

Internal Affairs

AUSAID,

4. Incorporate youth programmes into school curriculum

Education

UNICEF AUSAID, UNICEF, SPC

5. Increase youth capacity and capability through vocational programmes 1. Improve and enhance the knowledge and skills of island council staff and strengthen their institutions and systems (e.g. SDGK41 project)

Education, Labour

AUSAID, NZAID, ILO

Internal Affairs

UNDP, Commonwealth

1. To strengthen and enhance the capacity of statistical units in all ministries, and in the island councils so that statistics can be collected, compiled, and published regularly

Finance, Planning Statistics

UNICEF, UNDP, SPC

2. To train senior government officials and island council staff on the use of statistics for planning purposes 1. To enforce PAC’s recommendations

Finance Planning

UNDP, UNICEF

Parliament, OB

UNDP, Forum

2. To streamline and simplify PAC report

Parliament

3. Raise understanding amongst MPs on financial implications of the recommendations 1. Follow procedures in the Conditions of Work Manuals (NCS, etc)

Parliament Finance

UNDP

8. Irregularities in employment conditions

PSO PSC43 OB Labour

2. Recruitments to be publicly advertised

Labour PSO

3. Terminations to be based on substantial grounds and clear evidence

PSO PSC

UNDP, ILO, Forum

6. INFRASTRUCTURES 41

Strengthening Decentralisation Governance in Kiribati. Public Accounts Committee. 43 Public Service Commission. 42

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Issues

Strategies

1. Deteriorating status of government buildings: classrooms, clinics, houses, etc

1. Allocate adequate budget each year for new buildings and maintenance

2. Poor standards of roads

3. Sub-standard airports and terminals

4. Lack or poor shipping ports

Responsible ministry/body Finance

Development Partners EU, AUSAID

2. Train staff relevant skills on maintenance

Works, Internal Affairs

EU

3. Encourage island councils to carry out regular repair and maintenance works to avoid permanent damage

Works Internal Affairs

AUSAID EU

4. Encourage and enhance private sector participation in national infrastructure

Works

Forum, AUSAID

5. Seek endorsement on Building Code, and raise awareness in order for the codes to be implemented

Works

Forum, AUSAID

1. Maintain roads using more Works appropriate materials and equipment

Japan, AUSAID, Taiwan

2. Train PWD staff and Island Council workers appropriate skills in road maintenance 1. Expand and upgrade airports and terminals, on Tarawa and Christmas island

Works, Internal Affairs, Is Councils

Forum, Japan, Taiwan

Communication Works

Japan and Taiwan

2. Undertake regular maintenance of airfields including tarmac

Communication Works

1. Maintain or upgrade shipping ports

Communication Works

Japan, Taiwan

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B. SECTOR STRATEGIES The following sector strategies are especially for the productive sectors, such as fisheries, tourism and agriculture. The reason they are reprinted here is because they represent the key potential areas of economic growth for the country.

1. Fisheries sector plan Ministry of Fisheries strategies, as presented during the Kiribati-Development Partners meeting 31 Oct 2007. The ministry does not have a comprehensive plan yet. Issues/Challenges 1. Kiribati government fishing company (CPPL) lack fishing vessels, and storage capacity

Strategies 1. Government to invest more in CPPL infrastructure (including vessels)

2. Negligible fish or marine exports

1. Development of fresh tuna export industry 2. Encourage the private sector to invest and join in the tuna export industry 3. Develop tuna loining business for export and employment creation 4. Set up fishermen cooperatives, especially in the south islands 5. Form joint ventures (JV) with overseas companies that have capital, experience/skills, and reputation in the fishing industry 1. Focus on fishing agreements that will benefit Kiribati the most 2. Use currencies other than US$ for fishing fees

3. Decline in fishing license income

Development partner

3. Fishing negotiations should include officials from Finance and AG’s office. 4. Poor management, conservation, surveillance, and harvesting of EEZ waters

1. Improve marine or fisheries statistics and undertake research based on quality and reliable data 2. Restructuring the ministry in order to align resources with targets and obligations 3. To monitor fish stocks 4. Obtaining relevant surveillance equipment and

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4. Fragility of coastlines and vulnerability of coastal resources

5. Lack of understanding of the linkages or interrelationships of people, marine resources, and economic growth

carry out regular surveillance of EEZ area 5. Demarcation of maritime boundaries 1. To update fisheries legislation and regulations 2. To undertake stock assessment of island marine resources 1. Encouraging communitybased management and conservation initiatives for inshore resources

6. Sea cucumber (bechederme), pet fish, bone fish, harvesting and exports not properly managed

1. Legislation required 2. Restocking exercise needed 3. Quota system for pet fish needs to be set up 4. Fishing for bone fish on Christmas island needs to be stopped 5. To breed and farm important pet fish species

7. Lack of commercial bait for fishing 8. Very slow development of the pearl industry

1. To use milkfish as bait

Poor performance of seaweed industry Prawn industry

1. To fasten the pace of work and research on the pearl cultivation 2. To give pearl business to private people, especially those with experience in pearl farming and marketing 1. To privatise seaweed business 1. Taiwan to continue commercial development of this commodity

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2. Tourism sector plan This sector plan follows closely the format of the government prodoc format because the important consideration is to secure funds for the strategies and activities stated in the plan therefore the prodoc format is a more convenient form to follow. A.1

PROJECT TITLE:

DEVELOPMENT OF TOURISM in KIRIBATI A.2 SECTOR: Economic development A.3 LOCATION: The focal areas are: Christmas island; Tabuearan (Fanning) island; Phoenix group; and Tarawa A.4

PROPOSING AND IMPLEMENTING AUTHORITIES

The Ministry of Tourism in collaboration with the ministry of Environment and the Planning Office, ministry of Finance, and the Linnix ministry A.5

PROFESSIONAL BODIES/ADVICE CONSULTED:

Planning Office, Ministry of Finance and South Pacific Tourism Organization (SPTO) SPREP, Forum Sec A.6

ESTIMATED TOTAL COSTS: Shown below.

A.8

LIKELY BENEFITS The likely benefits of a full blown tourism industry in Kiribati are potentially diverse and substantial. For instance, the tourists spending on accommodation, travel, meals, handicrafts, and other services could easily reach million of dollars44. The supporting industries such as the fisheries, the agriculture, bus and taxi owners, etc. would all increase their production or their level of services as to meet the surging demands of tourists and the tourist employee themselves. There would be interest to revive cultural or traditional activities which tourists would like to watch or experience, such as local dancing; canoe sailing; fishing; etc. This will mean that Kiribati culture will be revived and promoted. The beneficiaries of the tourism industry include people from the rural areas, e.g. fishermen and farmers; people from the business sector, e.g. motel owners or transport owners; government employees, through taxation revenue, etc. The environment would also get the attention of the people and the authorities because nobody in Kiribati wants people from overseas to think that Kiribati is ‘dirty’ and spoiled. Of course there would be costs or expenses in developing tourism but the benefits, as seen in other countries, are likely to outweigh the costs.

44

We just need to look at Fiji, Vanuatu, Cook islands, etc to see that their income from tourism far exceeds that of any other industry in the country.

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A.9

SUMMARY DESCRIPTION OF PROJECT The project basically involves the development of tourism in Kiribati to a level that is commercially viable both from the viewpoint of economics, and from the viewpoint of the environment. The project is meant as a comprehensive ‘blueprint’ for the development of tourism in Kiribati and therefore will involve several key stakeholders (e.g. the private sector, the environment ministry, the communities, etc) and has a long time horizon. It is well appreciated that capital requirement for the industry is very high and this is why it may be necessary to encourage and attract foreign investors, including overseas airlines and shipping lines. It is necessary also for government to put in some money into the infrastructure to support tourism because without good infrastructure tourist operators may not be very willing to set up their businesses. This project will start off by looking at the institutional setup in the country including the legal framework to see where changes or new additions are required. This will include looking at the staff level and capacity of the government tourism office and other related government agencies, e.g. the environment unit, the immigration, the quarantine, etc. Once the institutional set up is more or less completed, then studies or analyses of certain tourist markets and products would also be undertaken in order to understand the strengths and weaknesses of our own tourism industry. There will be consultations and close collaborations with development partners and regional or international tourism agencies in these studies however the local agencies would be the leading agencies. These activities might take a year or two after which the development of infrastructure will commence. Good connection in terms of airline service and shipping service is required as well as in telecommunication (telephone, internet, etc). This should involve consultations with overseas airlines and shipping lines. Promotion and marketing strategies will be developed and the implementation of these may start 2-3 years after the project starts. Government with the assistance of foreign investors will start building hotels or motels to match the pick up in tourists in the 3rd year or so. Because the private sector is generally small and lack capital the government should initially provide investment funds into the industry and should run the first few large hotels but over time it should relinquish ownership of such enterprises to the private businesses. The government however should maintain the required infrastructure and the legal framework for supervising and monitoring the tourism industry, i.e. the role of the government, in the long run, should revert back to just the supervision and the monitoring of commercial activities, as well as providing and maintaining tourism infrastructures.

A.10

COST-BENEFIT ANALYSIS The cost of setting a tourism industry is enormous, both in terms of finance required, as well as in terms of labour (or manpower) effort and time. The cost of the infrastructure, such as the airline service runs well over millions of dollars, as well as constructing roads, ports, etc. However the benefit from tourism is significant, but more importantly sustainable. For instance, Fiji and the Cooks islands now have tourism as the main income earner of the country—well above the sugar and other export commodities. In fact according to published studies tourism now is the largest and fastest growing industry in the whole world. Besides, the tourism industry complements efforts to maintain and sustain the environment and culture.

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A.12

PROJECT DURATION: 5-10 years

A.13

EXPECTED IMPLEMENTATION DATE: As soon as funds are available

B.1

PROJECT OBJECTIVES

The main objective of this project is to develop sustainable tourism in Kiribati in such a way that the government of Kiribati and people of Kiribati benefit from it over a long time. The intention is to increase income for the people and hence reduce poverty or hardship of the rural people and also generate adequate taxation income for the government. While the intention is to derive economic benefits from the project there are also aspects of developments that require careful consideration and this is the ‘environment’ and the ‘culture’ aspects. As will be seen in the project strategies and activities, environment and cultural dimensions will be fully considered, and implemented, where and whenever possible. The intention also is to encourage the private sector to take the lead in this sector leaving the government to take care of the policies and the infrastructures. B.2

PROJECT OUTPUTS

The first output of this project is the institutional strengthening of the tourism industry. This refers to having relevant tourism agencies, government or private, with adequate staff and capability to monitor and oversee tourism development. A legal framework or legislation is also expected in the initial stages of the project. Relevant committees or organizations will also be formed as part of the institutional arrangement. This will be followed by detailed studies and analyses and hopefully a comprehensive action plan for tourism development. If everything goes well as expected, then the next stage would involve building infrastructures and linking with international or overseas companies for transport and communication purposes. The infrastructures would include good roads, wharves, airports, terminals, hotels/motels, transport equipment, etc. The private sector is expected to produce goods and services for the tourism industry and all these are expected outputs from the project.

B.3

CONTEXT OF THE PROJECT

The project is initiated from two underlying beliefs: Kiribati has some unique scenery and products to offer to tourists; and Kiribati political climate is stable and conducive to foreign visitors. The geography of Kiribati is often described by this simple sentence: ”A country that is made up of small islands that are scattered over a very large ocean area”. It is most probable that the picture of ’people swimming in cool pristine waters or simply laying back under the clear sun on ‘pure white’ beaches’ would ‘pop-up’ in the minds of people reading this kind of description, especially people in the more developed countries who are always looking for remote, peaceful, and ‘romantic’ secluded spots to relax away their stress. And with the recent terrorist attacks and political turmoil in some known holiday destinations, more stable and peaceful countries like Kiribati do have the advantage now of attracting tourists and this is why it is about time Kiribati offer holiday sanctuary to peace loving tourists—tourists who simply want to enjoy the beach, the sun, the cool ocean waters, and spending their monies. In a way the isolation of Kiribati from many developed countries is an advantage in the sense that Kiribati truly offers the last ‘frontier’ of civilization to the rest of the world.

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The advantage of a tourism industry, as opposed to a manufacturing or mining industry, is the fact that tourism does not necessarily involve heavy crushing, milling, spilling or excessive release of polluting smokes into the sky, as often seen in manufacturing or mining industries. That is, tourism is a more ‘clean’ and ‘friendly’ industry with very little physical impact on the environment. The only concerns with tourists are generally minor ones and can easily be resolved or mitigated by simple and practical legislations or regulations. For instance, throwing garbage, especially plastics and tins around, can be easily mitigated by imposing strong environmental rules. Likewise tourists style of clothing when they go onshore, especially the very ‘bare’ attire, will not have much impact on the local community if there are secluded beaches reserved only for tourists. Economic growth in Kiribati has not been exciting recently—in fact, the growth in the past couple of years is negative and while there are several factors behind this dismal performance, there is one notable lacking feature in the economy—the lack of real investment or the lack of investment in the real sector. And the two sectors that Kiribati has comparative advantage on are: marine resources and tourism. The key sectors therefore that Kiribati has the potential to really grow in are the ‘fisheries’ sector and the ‘tourism’ sector. So if there is any real and significant investment to be made, then government should go for these two sectors. This is not to say other sectors of the economy, like agriculture, education, health, good governance, etc. should be neglected or not supported—rather the focus of development should be on the two sectors because they could bring significant returns to the economy and to the people of Kiribati, i.e., in terms of more employment; more income; better infrastructure; better communication; etc. These two sectors would surely address poverty issue in Kiribati because both are labour intensive and generally require not very high qualifications. In summary, the context in pursuing this project is that Kiribati endowment or comparative advantages lie in its large ocean area and its scattered and ‘beautiful’ islands, i.e. in its fisheries sector and tourism industry. B.4

IMPLEMENTING STRATEGY:

Like all projects or major programmes it is always important to have one single body that coordinates and carries out the main tourism activities. But as learnt from experience, it is also of critical importance that the leading agency collaborates well with all stakeholders, especially in the case of tourism industry which cuts across many sectors and industries. In this respect, the environment ministry, the communication ministry, the ministry of works, the Linnix ministry, and the Planning Office, should be thoroughly consulted on any large development by the tourism authorities. And likewise, the tourism authorities should be consulted on any development that may impact on the tourism industry. For the purpose of this prodoc the Kiribati National Tourism Office (KNTO), within the ministry of Communication and Tourism, should be the leading agency on all tourism activities, including those on Christmas island. It may be that after the institutional review has been undertaken, and after the Tourism Office and other relevant agencies have been strengthened, the separation and delegation of responsibilities could be made. For instance, the tourism unit located on Christmas island could, after some time, supervise and monitor tourism activities in the Line and Phoenix groups, while the island council on Tabuaeran could be assigned the role of supervision and monitoring of tourist related activities on the island. What is important is that there is a body directly responsible and accountable for any major tourism activity.

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The second major activity would be the drafting of the Tourism legislation and policy. This is to ensure that the supervision, monitoring and regulation of all tourism and tourism related activities including that of the private sector conform with the minimum operational standards of tourism and hospitality services. This includes having proper equipment and uptodate manuals, etc. At this stage there are four known locations where tourism have already started (or about to start in the case of the Phoenix group). These four locations are slightly different in their geographical, social, and development settings and as a consequence they attract different categories of tourists. In view of these differences the approach in developing each location to suit the expected tourists, in terms of the infrastructures and facilities, would be slightly different. The four areas are: Tarawa; Christmas island; Tabuaeran (Fanning) island; and the Phoenix group. Visitors to Tarawa, for example, are mostly people on government business, sales people (private), consultants, and people visiting friends and relatives (VFR). On Christmas island, most tourists are fishermen, and in the case of Tabuaeran, most are ‘pure tourists’ in the sense that they come only to see and enjoy the sandy beaches and the cool waters of the Pacific Ocean. For the Phoenix group, it is expected that tourists would be mostly eco-tourists or research oriented tourists. The following paragraphs will describe each of the locations in more detail and the likely strategies or activities to further develop tourism on them.

B.4.1 Tarawa tourism: Tourism institutional strengthening and capacity building would start from here because this is where the Tourism Office is located and where the Attorney General office is located. Other relevant ministries like the environment ministry, the health ministry, and the Planning Office are also located here. In terms of training and capacity building, staff of the Tourism Office will need to undertake specific courses on tourism promotion and marketing because these activities will constitute the main thrust of the tourism industry once the infrastructures have been put in place. The training could take the form of ‘formal’ short term courses offered by academic institutions or the more ‘practical’ on-the-job courses that tourism organizations or agencies in the region offer to tourist operators. The office staff should also be trained on the environmental requirements so that tourism activities do not necessarily harm or destroy the environment. Another important task is to set up a steering committee that oversees the development of tourism in the whole of Kiribati. The committee should be comprised of all relevant ministries or stakeholders including some from the private sector, in particular representatives of the hotel or motel business association, and should be chaired by the Secretary of the Tourism ministry. The secretariat would be provided by the Tourism Office and the meeting to be held at least once a month. The committee should go through the annual work programmes of the Tourism Unit and other sections involved in the tourism development. This committee should also ensure that there is consultation and coordination among the stake holders including between government ministries. The committee will make and submit regular reports to Cabinet on the status and progress of the tourism industry. Once this committee has been fully operational, then the legal framework for tourism should be developed—a technical assistance may be required at this stage. The terms of the reference for this technical assistance should be provided by this committee.

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In the case of communication infrastructure, there are already two regular flights of Air Pacific into the country a week, and one from Air Nauru45. Air Pacific flight is serviced by Boeing 737 with 100 passengers, and Air Nauru uses the older version of the Boeing 737-200. In a week we might get 50-100 visitors and so the existing accommodation capacity46 is not so much an issue however the quality of the service needs improvement as well as the range of tourism activities. As is well known many visitors, but especially government visitors and consultants, want to work with fast internet connections and to watch good range of TV channels. These would be attractive improvements if the existing hotels or motels could have them. In terms of improving service, hotel staff need to go through tourism and hospitality service courses—in-country and overseas. There are hospitality service courses now offered in neighbouring countries, such as in Vanuatu, Samoa, Fiji, and PNG which the Australian government initiated as part of its policy of helping unemployed people in the Pacific region get paid jobs. The airfield (runway in particular) needs more improvement as well as the terminals—both the arrival and the departure terminals. Up to now incoming passengers have to line up in a very small square area and if there is rain some may get wet while waiting to be cleared from the immigration officers. In many cases there is only one or immigration staff to do the checking and this resulted in the people standing in the congested queue for a very long time. For old or sickly people the waiting could be very tiring and stressful. To tourists, this could be a disincentive to come back to Kiribati. There is no fan or cooling device in the waiting area and the toilets are often not functioning. Once out of the immigration the arrivals, including visitors, would wait around a small elevated concrete shelf on which the luggage and the suitcases would be put on by airport workers. This small shelf is easily filled up by stacks of suitcases and boxes because nobody is on the other side (i.e. the arrivals side) to remove the stacking up suitcases—apart from the arrival themselves who are in most cases just stand around the shelf and wait for their own suitcases. The result is often exhausted and frustrated visitors with little excitement to start off their first day in Kiribati. And with respect to the departure terminal, international passengers often mix up with local passengers because the check-in counters are being used interchangeably between the two. The space is small and very hot. And for safety purposes it is crucial that another fire-engine truck is purchased and used in the airport47—as a matter of fact the Boeing 737-800 can only land on Tarawa airfield if there are two fire-engine trucks available (there is a prodoc on this requirement but no funding has been secured yet). In times of no flight, one fire engine truck can be stationed in Bairiki in order to service the needs of Bairiki and Betio. In the past years three or four houses have been burnt down completely, including the Betio shipyard main office that was burnt in 2005. With many buildings and houses now in their last years of useful life there is very high probability of more burnings and the presence of another fire-engine truck could prevent complete destruction of such houses. To help visitors easily find their accommodation big posters of available hotels or motels and their proximity and rates should be pinned up in the arrival foyer. Also a telephone service in the same foyer which tourists can use to check on their accommodation or their transport would be a useful facility for tourists. With the 45

This is called now ‘Our Airline’. There is the government owned Otintaii Hotel (40 rooms); Mary’s motel (20 rooms); FEMA motel (12); Lagoon Breeze Lodge (10), and some other smaller ones. 47 There is an existing prodoc on this but so far no donor has agreed to fund this. 46

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transport service, the hotels or motels should provide their own vehicles because it would be more convenient for visitors because they can take their time in loading their luggage and because they would be more comfortable—buses are generally available but sometime they are quite full and or too ‘noisy’. To help visitors locate the transport vehicles there should be a designated parking area with visible signboards. In order to attract the tourists, hotels or motels should develop specialised or unique products, such as sailing on a local canoe; diving; going out fishing; flying off to another island; etc. What is important is that the visiting tourist should go back and relate his or her thrilling experience to others so that others would become excited and decide to come here. With so many competitors in the tourism industry, product differentiation is always a useful strategy to adopt. This may require regular visits and exposure of our tourist service providers to other countries in order to observe and learn different tourism products. The government should provide adequate promotion and marketing budget to cater for visits of overseas media, travel agents, tour operators, etc. who would then promote and publicise Kiribati as exciting tourist destination. The budget should also cover advertising Kiribati on overseas TV channels and other media outlets. These promotional activities are very critical especially in the initial stages of the tourism development. To be more effective appointing a general sales agent in major source markets to attract and facilitate tourist visits to Kiribati is an ideal strategy. The strategies and activities explained above is summarized in the following table. Table 4.1. Strategies/activities to develop tourism on S. Tarawa Strategies/Activities 1. Strengthen and enhance Tourism Office, including additional staff

Responsible agencies Tourism, Communication, PSO, and Finance

Likely funding source Set-up cost = $ 5,000 Salary = $20,000

2. Form a steering committee

Tourism, Communication, Communication, Tourism, PSO

Recurrent source (7 x $50 x 12 =$4,200 SPTO, Forum, AUSAID, UNDP ($ 40,000)

Tourism, AG Communication Tourism, Works, Environment Same ministries as in 5. above

SPTO, Forum Secretariat, UNDP ($100,000) Japan or Taiwan (A$ 2-3 million)

3. Training of Tourism Unit staff

4. Drafting Tourism legislation 5. Expand and improve airfield (runway)

5. Enlarge and Improve air terminal, both arrival and departure terminals 6. Purchase of another fire fighting engine vehicle 7. Promotion and marketing of Tarawa destination, public campaign and overseas promotions

Communication Police, Tourism Tourism, Steering Committee,

Japan or Taiwan (A$ 3-4 million) Taiwan or Kiribati

government ($300,000) Forum Secretariat, SPTO, Recurrent source ($200,000)

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8. Assist hotels and motels to improve their service and products (trainings, workshops, visits to other tourist places, etc) 9. Supervision and monitoring of tourism development

Tourism

Recurrent source, SPTO, Forum Secretariat, (for private sector, DBK, BOK) ($300,000)

Tourism, Planning Office, Steering Committee

Recurrent cost= $5,000 Vehicle cost = $ 40,000

B.4.2 Developing tourism on Christmas island As in Tarawa the institutional strengthening and capacity building is required on Christmas island. First it is necessary to strengthen the existing tourism unit on the island. There are only two staff on the island now and there is no transport vehicle provided by the agency. If the tourism is to expand then surely more staff would be required to supervise and monitor the tourism service providers and operators. This requires that there is a legislation in place which empowers tourism staff to carry out their expected tasks and this will require training of the concerned staff. A committee comprised of all stakeholders in the tourism industry should be revived. This committee should; review tourism priority issues; ensure there is close collaboration and coordination among different agencies; ensure preparatory works are undertaken before cruise ships arrive; identify the training needs for tourism and hospitality for the Line group. The committee members should come from Linnix ministry, PWD, Customs, Immigration, Captain Cook management; private hotel/motel association representatives, and this committee should be chaired by the Secretary of the Linnix ministry and the secretariat to be provided by the tourism unit on Christmas island. Like Tarawa there are already some tourism infrastructures on Christmas island such as airports, hotels, motels, and fishing tour arrangements. There are also regular weekly flights between Nadi, Fiji, Christmas island, and Honolulu. The Air Pacific flies out on Wednesday morning to Christmas island from Nadi, Fiji, stay there for an hour or so then continues on to Honolulu. It stays in Honolulu for another hour or so before returning back to Fiji via Christmas island the same day. This flight schedule started in 2004 and is being maintained by the Kiribati government subsidy of US$ 73,000 per week (initially it was US$ 78,000). This translates to almost US$ 4 million a year, or almost A$ 5 million and in return the government of Kiribati gets roughly a million dollars of income for its 22 allocated seats and 1,000 kg cargo revenue. While there could be other benefits from the service48, other than the direct seats and cargo income, the current subsidy is fairly high and this is causing considerable strain on the government budget. So one of the first major activities in developing tourism in Christmas island is the establishment of ‘affordable’ air links to Fiji and Honolulu. These two places are fairly strategic in that they are the main hubs in the region in terms travelling to other countries, such as Australia, New Zealand, Asia, or for the case of Honolulu, connections to the US mainland. Once reliable air connections49 are established between Christmas island, Honolulu, and Fiji, then expanding and improving of accommodation infrastructure should commence. The government should expand the Captain Cook hotel with the assistance of foreign investors. The presence of the foreign investors is necessary 48

The financial analysis of this Nadi-Christmas island-Honolulu service has been carried out by the Planning Office, Ministry of Finance—but the full cost-benefit-analysis has not been undertaken. 49 It may be necessary to consult with other airlines that could the Nadi-Tarawa service, such as Air New Zealand, Qantas or even Virgin Blue. What is important is getting an airline that is reliable and affordable.

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because of their capital, experience, wider connections and the reputation that gets associated with their names. The ‘local’ private sector will be encouraged to expand and improve their services so that they could take on the influx of tourists, but because of their ‘small’ size and local settings, they will be encouraged to specialise into some special service or products. That is, they will be encouraged to go into the ‘niche’ markets because the government owned hotel will be geared to ‘high class’ tourists. This is simply because of the high costs of the investments required. It may be that over time, when the private sector can afford stylish and expensive hotels, the government would pull back and just act as a facilitator and regulator of tourism activities, but this may be in 15-20 years time. The airfield and airport terminals will also need major renovations. At this stage the repair to the airfield or the tarmac is carried out regularly, in fact the repair is done every time after Air Pacific planes takes off and on several occasions Air Pacific has refused to land because of the poor conditions of the tarmac. The terminals, both the arrival and the departure terminal, are very small and ‘untidy’ but this is not surprising because the buildings were very old. As usual training of staff of the government owned hotel and those of the private sector will be necessary in the initial stages of the development because these staff are the ones to implement future development activities. Public awareness of the potential benefits of tourism will also be made and this includes organizing workshops and meetings in the villages. Government is also expected to improve roads, electricity, sanitation and housing on Christmas island. Although these are not strictly tourism activities, they are all related to a better environment and a better sight to tourists. The Tourism Unit should try to promote Christmas island as an alternative destination for tourists seeking relaxing holidays, especially tourists from Australia, New Zealand, and the United States. The Asian tourists should also be targeted in the promotion but these at a later stage when the air service and accommodation infrastructures have been well set up. In order to attract cruise liners, such as the NCL, the government should focus on the development of the sea port infrastructure. This may require dredging in some places in order to allow the big ferry boats to go ashore without getting stuck or grounded. Improvement on the landing stage is also required, especially considering the large number of people that may descend on Christmas island. The private sector also needs to be well organized in their products and selling arrangements. For instance, stalls or tables are required to be arranged along the wharf or the seashore so that tourists can easily reach them. The sellers need to know basic English in order to communicate clearly with the tourists—i.e. it will be very frustrating to the tourists if the seller cannot understand what the tourists want, and likewise sellers will find it very difficult to sell their products if they cannot convey what they mean. Below is the summary of strategies/activities that would be needed to develop tourism on Christmas island. Note the costing shown are very tentative –the intention is simply to give crude guidance to the level of funding required.

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Table 4.2 Strategies/activities to develop tourism on Christmas island Strategies/Activities 1. Strengthen and enhance tourism staff and institutions 2. Increase public awareness of potential benefits from tourism 3. Negotiate affordable air link with Air Pacific or any other airline 4. Improve airfield tarmac and terminals 5. Training of hotel and motel staff (govt and private) 6. Improve water, electricity, and sanitation 7. Expanding and renovating government hotel (captain Cook hotel) 8. Encourage private sector to improve their accommodation, services, and their products 9. Dredge channel (Ronton) for ferry and cruise tender boats and improve landing facilities, e.g. landing stages, toilets, 10. Purchase of another fire fighting engine vehicle 11. Promotion and marketing of Christmas island as destination, 12. Assist hotels, motels and handicrafts sellers to improve their service and products (trainings, workshops, etc) 13. Supervision and monitoring of tourism development

Responsible ministry/agency Tourism, PSO and Linnix Tourism Unit, Linnix

Likely funding source

Communication, Finance Linnix Communication Tourism, Works, Linnix Communication and Tourism, PSO,

Recurrent source ($ 30,000)

Linnix, Environment Capt Cook management Communication Tourism Communication Tourism, and Linnix ministry, Hotel/motel, and service owners Tourism Linnix

UNDP, Forum and SPTO ($ 10,000) As above

Taiwan or Japan ($4-5 million) SPTO, Forum, AusAid, UNDP ($ 40,000) ADB (A$ 10 million) Taiwan or Kiribati government ($5 million) Private sources, say from 50 DBK, BOK etc. (A$ 1-2 million) Japan or Taiwan (A$ 1-2 million)

Communication Tourism, Police Tourism Linnix

Taiwan or Kiribati government ($300,000)

Tourism SPTO

Recurrent source, SPTO, Forum Secretariat, (for private sector, DBK, BOK) ($50,000) Recurrent cost= $2,000 Vehicle cost= $ 10,000

Tourism, Communication Finance, Steering Committee

Recurrent source ($500,000)

The progress of tourism development on Christmas island will be closely monitored by the Tourism Unit, the Environment section and the Linnix ministry. The Tourism Unit will report to the steering committee and subsequently to the Cabinet on all developments and problems encountered. In order to maintain and sustain the infrastructures related to tourism the government is encouraged to make adequate provisions in its recurrent budget for maintenance.

50

Bank of Kiribati (ANZ)

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B.4.3 Developing cruise tourism on Tabuaeran (Fanning) island The following is a list of strategies or activities required in order to develop further cruise tourism on Tabuearan island. Table 4.3 Strategies/activities to develop cruise tourism on Tabuaeran island Strategies/Activities 1. Teach island council about tourism requirements 2. Increase public awareness of potential benefits from tourism 3. Improve sea port Negotiate affordable air link with Air Pacific or any other airline 4. Improve airfield tarmac and terminals 5. Training of hotel staff

Responsible agencies Tourism Linnix ministry Tourism Linnix

Likely funding source UNDP, Forum or SPTO ($ 10,000) As above

Communication Tourism, Planning, Linnix Communication Tourism, Works, Linnix Communication Tourism, PSO

Recurrent source ($ 30,000)

6. Improve water, electricity, and sanitation 7. Expanding and renovating government hotel (captain Cook hotel) 8. Encourage private sector to improve their accommodation, services, and their products 9. Dredge sea for ferry boats and improve landing stages 10. Purchase of another fire fighting engine vehicle 11. Promotion and marketing of Christmas island as destination, overseas promotions 12. Assist hotels, motels and handicrafts sellers to improve their service and products (trainings, workshops, etc) 13. Supervision and monitoring of tourism development

Linnix Environment Communication Tourism, Captain Cook Communication Tourism, and Linnix ministry, and the hotel/motel, and service owners Tourism Linnix ministry Communication Tourism, Police Tourism Linnix ministry

Tourism Commerce

Tourism Finance, Steering Committee

Taiwan or Japan ($4-5 million) SPTO, Forum Secretariat, AUSAID, UNDP ($ 40,000) ADB (A$ 10 million) Taiwan or Kiribati government ($5 million) Private sources, say from DBK, BOK etc. (A$ 1-2 million) Japan or Taiwan (A$ 1-2 million) Taiwan or Kiribati government ($300,000) Recurrent source ($400,000)

Recurrent source, SPTO, Forum Secretariat, (for private sector, DBK, BOK) ($50,000) Recurrent source

Tabuearan provides a very interesting case because tourism on it is very different from that of Tarawa or Christmas island. Basically the tourism on Tabueran consists of cruise liners stopping off at Tabueran for a day or two to do some swimming or simply play or stroll on the beaches. This scheme started in the 1990s and have contributed significantly to the government revenue and to the economy of Kiribati, in particular to the local economy of Tabuaeran. Many people on this island use the US dollar to carry out their daily transactions and most just use the one to one conversion rate with the Australian dollar. The island council gets its revenue from charging each visitor a fee of US$ 1.00 and if we assume 2,000 visitors this will translates to US$2,000 straightaway. And the local people get US cash by selling handicrafts or seashells collected before the ship arrives to visitors. In fact the

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Tabuaeran island council is the only council in the whole country that has declined government support grant. The visit fee by the cruise vessel that gets paid direct to the central government is US$ 25,000 per visit, and this is fixed so if there are twenty visits in a year, then the total fee comes to US $ 0.5 million.

B.4.4 Developing eco- tourism in the Phoenix group There is current plan to protect the areas around the Phoenix group—to leave it undisturbed as was done to the Great Barrier Reef of Australia. The project that looks at this whole scheme of protection and conservation is called the PIPA project—the Phoenix Islands Protected Area project. The following strategies and activities were developed on the basis that the PIPA project would go ahead. Table 4.4 Strategies/activities to develop eco-tourism on Tabuaeran island Strategies/Activities 1. Setting up a tourism presence on Canton to oversee tourism development in the Phoenix group 2. Increase public awareness of potential benefits from tourism 3. Improve sea port and airport , tarmac, terminals, etc 4. Negotiate air links to Canton with international airlines 5. Setting up hotels or motels

6. Improve water, electricity, and sanitation 7. Setting up tourist facilities 8. Encourage private sector to improve their services, and their products 9. Invite more people with appropriate skills to settle on Canton island 10. Purchase of a fire fighting engine vehicle 11. Promotion and marketing of the Phoenix group as destination overseas

Responsible agencies Tourism Linnix ministry Environment 51 PIPA Tourism, Environment

Likely funding source Recurrent, Forum or SPTO ($ 50,000)

Communication Works Tourism Communication Finance Linnix Tourism, Communication Works PIPA PIPA Works Environment PIPA Tourism Tourism, Commerce

Japan or Taiwan or from PIPA trust fund ($ 2-3 million) SPTO, Trust Fund or Recurrent ($60,000) Japan, Taiwan or Trust Fund And private sources ($ 2-5 million)

Tourism Internal Affairs Finance Labour Communication Police Tourism PIPA, Linnix

Recurrent, SPTO (A$5,000)

Japan, Taiwan or trust Fund (A$ 2-3 million) Taiwan or Kiribati government ($5 million) Private sources, say from DBK, BOK etc. (A$ 50,000) Japan or Taiwan (A$ 200,000)

Taiwan or Kiribati government ($300,000) PIPA or trust fund ($400,000)

Two international agencies are involved in the PIPA project: the Conservation International (CI) and the New England Aquarium. These agencies are working on 51

Phoenix Islands Protected Area.

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this project with the Ministry of Environment through a local counterpart officer (formerly the Secretary of the same ministry) and at this stage they are looking for funding (possibly from GEF) to start off their activities. There are strong indications that funding support from donors, some private and some quasi governments, would start pouring in when the project has been confirmed and project activities start. The intention is to hold these monies in a trust fund with a certain proportion to go to government to compensate for not allowing fisheries and other developments to take place in the area. A portion of the fund will also be used up in the management and operation of the project (PIPA). There will be a committee overseeing the trust fund and this committee is answerable to the Kiribati government and the two international agencies. Once this PIPA project is well underway, then the idea is to start allowing in tourists to watch the rich biodiversity and pristine environment. It may be necessary to upgrade the airport and the sea port and to invite more people to the Phoenix group, in particular to Canton island, in order to provide supporting services to the project employees and to the incoming tourists. The tourism activities will be closely monitored in order not to spoil or damage the environment.

B.5

PROJECT MANAGEMENT AND ORGANIZATION

The entire project will be coordinated by the Tourism Unit within the Ministry of Communication and Tourism over several years but there are activities or programmes that other ministries or bodies will either implement or supervise but they should regularly report back to the ministry and the Planning Office their progress.

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3. Agriculture sector plan—the Green Revolution The following sector plan is also in the format of the government prodoc because the intention is to submit this to donors for funding consideration. A.1

PROJECT TITLE:

The Green Revolution: The PLANTING and PROMOTION of STABLE FOOD CROPS A.2 SECTOR: Agricultural sector A.3 LOCATION: The whole of Kiribati A.4 PROPOSING AND IMPLEMENTING AUTHORITIES The proposing ministries/bodies are: the Ministry of Environment, Lands and Agriculture, and the Planning Office (Ministry of Finance) The implementing bodies are the Agriculture Division, MELAD, and the Island Councils, and the Village people. A.5

PROFESSIONAL BODIES/ADVICE CONSULTED:

The authorities consulted on this project are: FAO; SPREP; Planning Office, MFED; Island Councils; NGOs; and Community leaders A.6

ESTIMATED TOTAL COSTS:

About A$ 5 million A.7

EXTERNAL FINANCING REQUIRED

A$ 3.4 million A.8

LIKELY BENEFITS There are substantial benefits from this project: some direct and tangible while others are more indirect and take some years to materialise. For instance, within 3—5 years we should expect to have abundant and ready supply of coconuts, breadfruits, pandanus, and other agricultural produce. These could be consumed immediately in place of imported foodstuff or could be sold to obtain cash. The nutritional value of these agricultural produce far surpass that of imported foodstuff and should reduce health problems which in turn could reduce government spending on medical supplies. The longer term benefits include the reduction in food imports which in turn would reduce ‘leakages’ in the domestic economy. Also more trees or crops can help reduce carbon dioxide in the air which is a main cause of global warming—a real threat to small island nations such as Kiribati. As a matter of fact the attempt to reduce global warming is a worldwide challenge and has been accorded high priority by many countries in the world.

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A.9

SUMMARY DESCRIPTION OF PROJECT The project aims to encourage the planting of trees or food crops such as the coconut trees, the breadfruit trees, the pandanus and other useful trees on ALL the islands of Kiribati including the Lines and Phoenix groups. These are the trees that have fed the people of Kiribati in the past until now—and which are known to be resilient to the harsh climate of the atolls. While crops or vegetables from overseas, such as cabbages or cucumbers, are important compliments to people’s diet, it should be emphasized here that these vegetables require water, good soil and elaborate compost—things which are not readily available on atoll islands. Not only that, but they do not last long like the local food crops such as coconuts and breadfruits—hence the option and the interest to grow local food crops. These days people are getting more and more dependent on imported foodstuff, even people on the outer islands, and this is one main reason why people have neglected the replanting of local and stable food crops such as coconuts, breadfruits, pandanus, etc. Now many of these local trees have reached their lifespan and are either senile or dying and this project aims to revitalise peoples interest in replanting such tree crops. As a matter of fact, these tree crops are definitely ‘capital’ assets in the sense that once they manage to grow, then they will continue to grow and bear fruits and provide food to the people for 20—30 years. Unlike other tree crops, the coconut tree by itself can provide; food; drink (fresh and alcoholic), cash through copra; shelter; and medicine—certainly a tree with multiple functions—a tree of life. The project will involve several phases given the extent and large scale of the work required. First there will be widespread consultations between the government and the local communities—the primary focus is to explain the benefits of the project and to get the cooperation of the people. The consultations will be carried out on all the islands. Once the people understand the objective and rationale of the project, and are committed to it, then the agricultural officers on each island will start collecting seeds (nuts) or cuttings of the relevant tree crops from people and these will be grown and nurtured within the agricultural compound (nursery), for say 2—6 months. Once these are ready, they will be distributed and given to people to grow on their lands, including government lands. In order to assist people reach distant and difficult locations tractors should be used, and it is expected that this project will include the purchase of tractors for each island. To help the people dig up holes for the trees, this project includes funding for the shovels, spades, and other agricultural tools—these, and the tractor, will all be given to the Island Councils to look after. The bulk of the funding therefore will be for the purchase of the tractors and the agricultural tools, as well as the initial consultations. After 4—5 years, when the trees start to bear fruits, then the project activities will slow down to just occasional cleaning and clearing up of the land to ensure the tree crops are not cluttered and ‘suffocated’ by creeping vines or ‘dead’ leaves, and also to ensure easy access to such trees. It is the people and their councils who will maintain and monitor the growth of the trees after the project ends but the agricultural officer will always be there to offer advice and assist the people.

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A.10

COST-BENEFIT ANALYSIS No doubt the cost of imported foodstuff will keep increasing as a consequence of the increase in fuel price and the general rise of prices (or inflation) in countries that export to Kiribati (e.g. Australia, New Zealand, etc). In recent years the total value of imported food has reached A$ 30 million, a third of the total imports value. Also the import value of medical supplies is well over a million a year—and it is well known that many sickness or illness in Kiribati are related to poor unhealthy diet. So if we consider the cost of this project, which involves the purchase of tractors and agricultural tools, against the likely benefits from reduction of food imports and medical supplies, not mentioning the global benefits from reducing global warming, then surely this project is one where benefits clearly outweigh the costs.

A.11

OTHER OPTIONS/ALTERNATIVES CONSIDERED The main aim of this project is to promote and revive the planting of local food crops—crops that have proven by history and in contemporary times to sustain people with minimum recurrent costs. The alternative to this project is to keep relying on imported foods which are known to be very expensive and unreliable. And to rely on vegetables, such as cabbages, cucumbers, egg plants, etc, is not a sustainable nor a long-term strategy given that these vegetables are often seen and used as compliments to the main diets which consist of rice, breadfruits and coconuts—furthermore, these vegetables require water, good soil or elaborate compost and are generally ‘temporary’ in the sense that once used, they could not be used again—unlike coconut and breadfruit trees which can produce fruits and feed people for well over 20 years. In other words, there are no close alternatives or options to this ‘green revolution’ idea.

A.12

PROJECT DURATION: The initial consultations and island visits might take 4—5 weeks and the purchase of tractors and agricultural tools could take a month or so. The shipment of these tractors to the outer islands might take another month or two because of the limited number of vessels capable of carrying motor vehicles to the outer islands. The collection of seeds (nuts) and crop cuttings and nurturing them into ‘healthy young’ ready to be planted could take 6—10 months. The actual planting activity therefore would take place a year after the project funds have been approved and this could go on for anther two years. The trees should start to bear fruits 4—5 years after being planted, especially for the coconut and breadfruit trees. In total therefore this project duration would be about 5—7 years. The cleaning and clearing activities will continue but these will be the responsibility of the island councils and the communities.

A.13

EXPECTED IMPLEMENTATION DATE:

The project could start anytime after the approval of funds. The agricultural division has staff on each island and is ready to start once funds become available.

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A.14

PROJECT CATEGORY:

Although there have been some replanting schemes in the past, in particular coconut replanting projects, these have all winded up because funds have dried up but also because of inappropriate planting method used. This time proven locals method will be used. The fact that other food crops will be planted as well, and that all islands will be targeted, utilising all the available lands, makes this project a fairly unique and encompassing project, i.e. this is a new and innovative idea.

A.15

POSSIBLE SOURCES OF FUNDING

As in all projects submitted to GEF for funding consideration, there will be cofinancers and this project document will ask other donors, UNDP and Australia, to cofinance this project. There will also be substantial resources committed by the Kiribati government in terms of making available staff to work on this project as well as facilities to enable the work to be carried out.

PART B: MORE DETAILED INFORMATION B.1

PROJECT OBJECTIVES

The main objective is to ensure that there is food security for the Kiribati people in the years to come. Other objectives include getting people eat ‘natural’ and more healthy food so that they can lead or have productive life and having an economy that is more self-reliant. Another important aspect is to increase the number of tree crops so that they constitute a carbon dioxide sink thus helping to address the global warming problem. B.2

PROJECT OUTPUTS and OUTCOME

From the project we expect to have several consultations as well as guidelines on how the replanting activity should be undertaken. We expect also to have agricultural ‘nurseries’ that contain useful tree crops which people could use as a source or reservoir for the needed tree crops. The project should provide island councils and the agricultural officers with tractors that can be used to transport people and the ‘young trees’ to their locations. The agricultural tools will also be kept by the councils and should be taken out only for planting purposes. Ultimately the outputs would be the coconuts, the breadfruits, the pandanus, etc. foods that can replace imported rice, flour, sugar and so forth. Of course the outcome is a more secure population with less dependency on imported food and a population that is more healthy and more productive. In other words, this is one effective means of poverty reduction.

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B.3

CONTEXT OF THE PROJECT

As alluded in the previous paras, people of Kiribati are getting more and more dependent on food imports these days. These food imports are not only costly to the nation but also are not as nutritious or as ‘healthy’ as local foods. The ever increasing food imports, amounting to a third of the entire imports bill of $90 million a year, is a drain on the economy because it constitutes an outflow of cash and hence detrimental to the country’s balance of payments. Not only that but it has been noted in the past that basic imported foods, such as rice and sugar, sometimes could not meet the demand and this resulted in people calling government to intervene—often this resulted in government having to rush in supplies of rice, even by air, which in turn caused government spending to go much higher than planned for. The idea of promoting and encouraging the planting of local tree crops is in line with the general thrust of the government to increase economic growth, in particular increasing the production of the rural sector which is often neglected in more modern economies. This is clearly spelt out in the NDS 2003—2007 p 26 which states under Issue 9: “Rural production has been declining”. There is no doubt that the next NDS (2008—2011) will also highlight the need to increase local or rural production. This is because of the wide-spread and immense benefits from such a development. The benefits from the project include the ready supply of local produce which can be consumed or be sold in the market to obtain cash. The rural people are known to earn relatively small incomes compared to those working in the urban centres and so this project could help rural people to get more cash income therefore the outcome of this project is consistent with the MDG and the Mauritius Strategies, in particular in reducing poverty of the rural people. Another important aspect of this project is the fact that the trees to be planted are the trees that have been known to sustain people in Kiribati, as well as other atoll islands, since the formation and inhabitation of the islands thousands of years ago. These trees are also known to resist and persevere under very difficult and trying conditions, and they live for well over 20 years. In summary the trees to be planted have clear comparative advantage over the other crops such as tomatoes, cabbages, etc. They are indeed capital assets in the sense that they will render streams of benefits to the people of Kiribati over many years, and their maintenance cost is very minimal. At this point in time many trees on the outer islands are senile or are dying because they have reached their life span (say over 30 years). The problem is that people these days are not very keen in planting tree crops because most opted to go to formal schools and obtaining cash earning jobs—mostly on S. Tarawa and on Christmas island. Besides, getting to the bush is very difficult because of the bad conditions of the roads, so there is little incentive to go deep in the bush to dig and plant new crops. The number of trees is also declining because of the encroaching dwellings so it is important that ‘vacant’ or unused lands (whether private of government owned) are used in this project so that the net result is an increase in the rural production or output for the whole island. B.4

IMPLEMENTING STRATEGY:

Once funds are available, the officials from agriculture division and from the national planning office will visit each island to discuss and formulate appropriate strategies. The visits will include surveying of the islands to see and determine their comparative

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advantage in terms of the most appropriate tree crops to be grown. For instance, in the southern islands, the coconuts and the pandanus would be the ideal plants while in the north, both trees, plus the breadfruits and the babai (swamp taro) would be appropriate trees to grow given the more wet conditions. The island councils are expected to keep and maintain the tractors and the agricultural tools while the agricultural officers are expected to look after the plant nurseries. The agriculture officers in collaboration with the island councils will regularly go out and collect seeds (nuts) and tree cuttings in order to build up the number of ‘young’ trees in the nurseries. After 5—6 months the agriculture officers and the community members can start planting using the tractors and the tools kept by the island councils. Based on experience from the past, the best method to grow the local trees is to use the local methods. Many people in the villages know how to grow coconut and breadfruit trees and they should be consulted. The intention is to start from one end of the island right up to the other end, i.e. a systematic approach. This should avoid people from different villages mixing up in the planting activities. Each village will provide its own casual labourers to plant their own land but they will go on the tractor provided by the island councils. They will also use the agricultural tools kept y the island councils but once the work is finished, the tools will all be collected by the island councils and stored safely in the council offices, ready for the next village use. It may be necessary to repeat the process again but it is important that the planting process is undertaken in a systematic fashion. All vacant or unused lands will be planted, even if the land owners are not present. This is because the ultimate idea is to encourage and boost the overall rural production, besides, the owners can easily chop down the trees when they return and decide to use the area for their house or for other purposes. It should be stressed here that it takes several years for the coconut and breadfruit trees to grow and bear fruits so it is a wise strategy to grow them early rather than late. The trees will be arranged as to have a mixed setting in the sense that coconuts may be interspersed with breadfruits or pandanus. This will mean that in a cluster there will be different tree crops, however there may be locations where it is necessary to simply stick to one type of tree crop. When the trees finally reach the stage they bear fruits, the land owners, or keepers of the lands, can simply collect and consume the fruits, instead of buying rice or sugar, or can sell these to obtain cash income. These people will be encouraged to clear their lands frequently so that their tree crops continue to thrive and bear fruits.

B.5

PROJECT MANAGEMENT AND ORGANIZATION

The project will be managed on a daily basis by the agriculture division and the island councils. These bodies in turn are expected to submit regular progress reports to the Planning office and the concerned donors. The activities undertaken by the agriculture officers should be reflected in the ministry operation plan (MOP) progress report. If GEF agrees to fund this project then the implementing agency would be the UNDP given its proximity to Kiribati, and the execution agency would be the SPREP, in close collaboration with the Ministry of Environment and lands (MELAD).

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B.6

PROJECT INPUTS AND COSTS A. HUMAN RESOURCE REQUIREMENTS Officials from the agriculture division and the island councils are expected to manage the operation of this project and therefore their salaries are included as part of the government contribution to the project. The only labour that could be compensated under this project are those requested to help plant the trees—these will be mostly village people or community members. They may not be paid as normal employees because the tasks are temporary but they could be provided with refreshments during the planting sessions.

B. FINANCIAL REQUIREMENTS:

Agricultural equipment: Purchase of 20 tractors @ $150,000 Purchase of agricultural tools @ $2,000 Fuel (for the 1st 3months) @ $120 Sub total Consultations on each island: 2 staff x 18 x $500 (fare & DSA) For Xmas isl: 2 staff @ $6,000 Venue and refreshments 20x $1,000 Island transport: 20x $ 200 Sub-total Nursery costs: 20 x $2,000 Planting costs (fuel, refreshments, etc) 20 x 3 mths (60 wdays) @ $200 Total funding

$3,000,000 $ 40,000 $ 24,000 $3,064,000 $ $ $ $ $

18,000 12,000 20,000 4,000 54,000

$

40,000

$ 240,000 $ 3,398,000

Note the contribution of the Kiribati government is not included in the above calculations. The Kiribati government contribution to the project include salaries of the agricultural, island council, and planning office staff involved in the project; the provision of office space and other office facilities, including electricity and telecommunication use. B.7

EXPECTED PROJECT IMPACT

A.

Physical effects: The physical impact will be quite profound after 3—5 years. There will be a systematic stretch of ‘greenery’ on the island comprised of tree crops: coconuts interspersed with breadfruits and pandanus or other trees. The islands will be cooler than before because of the shade provided by the trees and their leaves. There will also be less dust in the air as the trees will act as a sink for such particles. In effect the scenery will be of immense beauty.

B.

Economic impacts:

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The economic impact of the replanting will be substantial. There will be more value added of the rural sector: people will have more natural foods to consume and will have more chance of getting decent cash incomes from the sales of such produce. Food imports may go down and the balance of payments will improve. Overall there will be a substantial positive economic impact in the country for many years after the project ends. C

Social effects:

In many instances, lack of food or cash income constitutes the basis of family disturbances which could lead up to abuse or bitter separation. So the abundant and ready supply of local foods could go a long way to solving family problems—not only within a single family but between different families and community members. D.

Environment impacts:

With more tree crops, the environment would be much better off—the fragile ecosystems and the biodiversity will continue to thrive and flourish while the green house effect will be reduced.

B.8

IDENTIFIABLE RISKS

The risks to the project could come from two fronts; from nature, and from the people themselves. In terms of the natural risks, the hot and dry weather could continue for several years in which case the young plants may not have the chance to grow well. In this case, the project could concentrate first on the islands that are more wet and more fertile—and to leave the other islands to the time the weather improves. Another potential natural disaster is the strong winds (e.g. westerly gales) or surging tides which could damage the tree crops. The Kiribati Adaptation project (KAP), a project initiated by the World Bank and funded by GEF, is currently ongoing and is expected to address or at least have some mitigating measures for these kinds of disasters. In terms of the people what is the most worrying part is if the communities or village people do not subscribe to this idea. This is why the consultations in the initial stages is very crucial, and therefore every effort will be made to ensure people fully understand the rationale and the benefits of this project. People need to understand also that this project requires several years before tangible benefits could be obtained and enjoyed. Another concern is if the government changes, and the new one is not supportive of this project. Again it is the duty and role of the agricultural and the planning officials to convince the new government that the project is indeed a worthwhile project which will help the rural people to live a healthy and productive lifestyle. The policymakers will also be advised that the project has the blessing of GEF and other international/regional bodies, such as the World Bank, FAO, SPREP, etc.

B.9

MODALITIES FOR FINANCING

GEF may be requested to pay for the tractors and agricultural tools in cash while UNDP would be requested to pay for the consultations and island visits. The Kiribati government is expected to contribute through in-kind services or activities. It is

82


important that funds for the consultations come first so that the strategies and further activities could be planned first before the tractors and equipment are secured. GEF and UNDP fundings could go through the normal government development project system where it gets recorded first in the Development Fund account and then disbursed by the planning office after the Minister has signed the warrant to the implementing ministries. There should be regular reporting of how the funds have been used and only after the submission of the acquittal reports could the next batch of funds be released.

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Chapter 5. Monitoring and Evaluation While the focus of the plan is to lay down strategies to address the problems and issues presently facing Kiribati, and in doing so develop and improve the socio-economy status of the country, it would be unrealistic to expect that everything will be carried out on time and that the outputs and outcomes expected would eventuate so to really understand and appreciate the status and progress of development it is important that monitoring and checking systems are put in place. It is very well to have a nice plan and marvelous strategies but if there is no monitoring system then it would be extremely difficult to say whether we are heading in the right direction or not, and whether we are achieving what we planned for, or not. It is important to note also that the progress in our development efforts are very much related or linked to issues promoted by international conventions, such as the MDG Declarations, The Mauritius Strategies, and the Pacific Plan initiatives— conventions that our government has ratified or agreed to. There is therefore paramount importance of having an operational and effective monitoring process. This section will describe a system that could be used to monitor and evaluate the status and progress of development in each key policy area. As a matter of fact, the system has already been formulated and implemented but the idea here is to document and elaborate on the system; its basis and framework; the responsible ministries; the reporting format; the frequency and the timing of the reporting; etc. For overall monitoring, the Planning Office would be the ideal office to receive all the progress reports from ministries, statutory bodies and public enterprises—at least the Planning Office knows the contents of the plan and is responsible for the nation-wide planning. However it is the duty of the particular ministry to ensure that it gets the written progress of all activities under its portfolio and those from public enterprises and to submit these to the Planning Office twice a year—one in August, and one in February. The report in August should cover the progress within the six months starting from January-June, and the February should cover the June-December progress. The Planning Office would then compile all the reports, make its own analysis and comments, and submit these to Cabinet through the Minister of Finance. If necessary the Planning Office staff and perhaps the concerned ministries could present, in person, their progress reports to Cabinet, at least Cabinet members can ask and probe for more information and clarifications. The reporting template would be the current MOP reporting template—after all the activities in the plan would be very much interrelated with ongoing activities of the ministries—who are currently using MOP reporting template. The MOP template is fairly simple but informative. It consists only of the activities; outputs; progress so far; responsible person; and funding source. For PEs, the term BOP will be used instead of MOP, but the column headings are the same.

84


MOP progress report: Ministry:…………………………………. Period: ……………………………….. Programme (section):………………… Responsible officer:………………… Budget allocated: ……………………. Activities

Outputs

Progress

Responsible person

Funding source

Although the term ‘strategies’ is used in the plan, at the sectional and operational level the activities are actually undertaken or carried out by the various sections or departments. That is, the term ‘strategies’ is more a conceptual approach of resolving or at least addressing the problems or the issues. So while the ‘strategies’ is an important concept, in actual fact for monitoring purposes activities are more practical, relevant, and meaningful and these will be the ones to be reported back to the Planning Office. In terms of the annual work plan of the ministries or public enterprises (MOP or BOP), the template is slightly different to the progress reporting template shown above. This is now the Plan and it has ‘Targets’ rather than ‘Progress’.

MOP (Ministry Operation Plan) Ministry:…………………………………. Period: ……………………………….. Programme (section):………………… Responsible officer:………………… Budget allocated: ……………………. Issue

Strategies/Activities

Targets

Responsible person

Funding source

For public enterprises, the format for the annual plan and for the progress report are basically the same as for the government ministries shown above except for the names, i.e. instead of ministry names, the company or corporation names should be used. The ‘Target’ is the amount or the quantity of the goods or services that a particular activity is expected to produce or it can be a date when the work or the assignment has to be completed. It could also be a proportion of the people that is ideally required to be covered under a certain programme. These will be related closely to the MDG, the Mauritius Strategies, and the Pacific Plan indicators. In a way the MOP can be considered as the mini version of the national plan (NSDP), i.e. it is a one year plan rather than a four year plan like the NSDP. 85


The other difference is that the MOP will be more detailed than the NSDP and can sometimes incorporate activities that were not shown in the NSDP. The intention however is to ensure that the MOPs follow closely the NSDP because the NSDP encompasses national priorities and in principle should guide the work plans of the ministries and the public enterprises. It is important also to understand that the MOP is really a work plan that may include a lot of routine activities which are not shown in the national plan NSDP. The NSDP is really a ‘development’ plan, i.e. not a ‘routine’ or ‘recurrent’ plan therefore it will inherently focus on developments or major activities. This is basically the difference between the two plans, apart from their duration, and it is important to bear this mind especially when reviewing the MOPs and the NSDP. So if the ministries or the public enterprises report all their activities on a regular basis and in a comprehensive manner, whether they be routine or development activities, then in effect the MOP progress reporting would be the same as the NSDP progress reporting, and these reports over time could form the basis of the review needed for the next plan. The monitoring and the evaluation of government activities is important to be undertaken regularly so that the government is kept on track of what it sets out to do in the beginning. It is important also to be aware that there are indicators that ministries cannot provide themselves, like GDP, exports, imports, inflation rates, etc. These are macro statistics that the Statistics Office is responsible for and in order to review the progress regularly, these statistics should also be collected and compiled on a regular and up-to-date basis. It is important to appreciate that the format of the MOPs and the MOP reporting template is different to that shown in the previous NDS (2004-07). For comparison purposes the previous format will be shown below. Previous MOP reporting format (for comparison purposes) Outputs

Targets/timeliness

Risks/Assumptions

Comments

Although the above format is useful the problem with it is that many ministries find it difficult to fill in the columns, especially the timeliness and risks/assumptions columns. These concepts, for some reasons, are quite difficult to some officials while others think the terms are not relevant. Anyway the feedback on the new reporting template is quite encouraging in that most officials said the format is easy to fill in and makes more sense—some are actually using it for their own internal use.

86


Indicators Now with the key policy areas already identified for 2008—11, and with the reporting procedure explained above, the next step now is to come up with indicators that can be used not only by government but also by international agencies, to measure and monitor the progress of development in the country. These indicators should be possible to measure and report on regularly, and be relevant to the government and to international agencies. There should be a working committee comprised of senior officials from key ministries, such as Health, Education, Environment, etc. whose function is to collect and collate the indicators and submit it to the Planning Office. The Planning office will in turn submit regular reports to Cabinet and international agencies in line with the MDG , the Mauritius Strategies, and the Pacific Plan requirements. KEY POLICY AREAS and INDICATORS 1. Economic Growth and Poverty Reduction Strategies/activities 1. Economic growth 2. Poverty reduction

Indicators GDP growth per year Proportion of people under poverty line

Targets 3% per year 25 %

Indicators Primary school enrolment

Targets 90 %

Indicators

Targets

Proportion of population covered

70%

Indicators

Targets

3. 2. Education Strategies/activities 1. Promote and enhance primary education 2. Promote and enhance secondary education, including JSS 3. 4.

3. Health Strategies/activities 1. Reduce infant mortality rate IMR 2. Reduce under 5 yr deaths 2. Increase immunization program 3.

4. Environment Strategies/activities 1. Achieve adequate standard 2. Protection against invasive species 3. Secure water supply 4.

Proportion

87


5. Governance Strategies/activities 1. Working together in partnership 2. Setting performance targets 3. Setting up committees to oversee large projects or programmes 4. Strengthening and enhancing statistics

Indicators

Targets

Indicators 1. Level of budget allocated to maintenance 2. Number of major maintenance works carried out 1. Budget provision for road maintenance 1. Budget provision for airport maintenance 2. Number of airports/airfields upgraded 1. Budget provision for ports

Targets $500,000 pa

6. Infrastructures Strategies/activities 1. Deteriorating status of government buildings

2. Poor standards of roads 3. Poor conditions of airports, terminals, tarmac

4. Very poor standards of shipping ports

Five per year

$100,000 $100,000 Three per year $100,000

88


Chapter 6. Linkages with MDG, the Mauritius Strategy, and the Pacific Plan In this chapter an attempt will be made to show how consistent is this plan (i.e. KSDP:2008--2011) with the international or regional conventions or declarations. Mauritius Strategy In the Mauritius Strategy (MS), the focus is on the three pillars of sustainable development, viz., economic, social, and environment. Countries are encouraged to consider all these three in their development plans in order to have an integrated, holistic and sustainable development. The following table shows the MS key sectors and on the right is Kiribati key policy areas. Mauritius Strategic Sectors 1. Climate Change and sea level rise 2. Natural and environmental disasters 3. Management of wastes 4. Coastal and marine resources 5. Freshwater resources 6.Land resources 7. Energy resources 8. Tourism resources 9. Biodiversity resources 10. Transportation and communication 11. Science and technology 12. Graduation from least developed country status 13. Trade: globalization and free trade 14. Sustainable capacity development and education for sustainable development 15. Sustainable production and consumption 16. National and regional enabling environment 17. Health 18. Knowledge management and information for decision making 19. Culture 20. Implementation

Kiribati Plan Key Sectors Environment Environment Environment Environment Environment Environment Economic Growth Economic Growth Environment Infrastructure Education

Economic Growth Economic Growth Economic growth Governance Health Education Governance

Millennium Development Goals The MDG Declaration (signed in 2000 by UN members) on the other hand proposes eight ‘Goals’ with targets and indicators formulated in such a way that monitoring over time and across countries/regions can be made. The 89


target date set for countries to achieve the required targets is 2015, eight years from now. The Goals are listed below Goals 1. Eradicate extreme poverty and hunger

2. Achieve universal primary education

3. Promote gender equality and empower women 4. Reduce child mortality 5. Improve maternal health 6. Combat HIV/AIDS, malaria and other diseases

7. Ensure environmental sustainability

8. Develop a global partnership for development

Targets

Kiribati key policy area

1. Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day 2. Halve, between 1990 and 2015, the proportion of people who suffer from hunger Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling Eliminate gender disparity in primary and secondary education preferably by 2005 and in all levels of education by 2015 Reduce by two thirds, between 1990 and 2015, the under five mortality rate Reduce by three quarters, between 1990 and 2015, the aternal mortality rate 1. Have halted by 2015 and begun to reverse the spread of HIV/AIDS 2. Have halted by 2015 and begun to reverse the incidence of malaria and major diseases 1. Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources 2. Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation 1. Address the special needs of the least developed countries (LDC), landlocked countries and small island developing states 2. Develop further an open, rulebased, predictable, non-discriminatory trading and financial system 3. Deal comprehensively with developing countries’ debt 4. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth 5. In cooperation with the private sector, make available the benefits of new technologies, especially information and accommodation

Economic growth and poverty reduction

Education

Governance

Health Health

Health

Environment

Governance And Economic growth and poverty reduction

Looking at the table above it is useful to note that the bulk of MDG goals are in fact addressed by the current plan key policy areas. For instance the UN 90


urgent concern about reducing hunger and poverty is being addressed by the Kiribati plan to focus on economic growth, not only in the urban areas but also on the outer islands through the ‘Green Revolution’ project. Likewise the call for universal primary education is also echoed in Kiribati current development plan which emphasizes the importance of quality and universal primary education. The concern of environmental sustainability is also one of Kiribati major concerns and this is reflected in the current plan by setting aside one whole key policy area for the ‘Environment’. Overall therefore the current Kiribati development plan (KSDP 2008-2011) is very much in line with the MDG thrust.

References: Kiribati Government (2003) “National Development Strategies 2004--2007” Ministry of Finance, Tarawa. United Nations (2005) “Report of the International Meeting to Review the Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States” Port Louis, Mauritius. United Nations (2007) “The Millennium Development Goals Report 2007” New York.

91


Appendices Table

Nominal GDP by Industry 1991-2006 A$('000) 1991 1992 1993 1994 1995 1996

Agriculture Copra cutters Copra Society Other Fishing Seaweed Mining Manufacturing Electricity Construction Wholesale /Retail Hotel/Bars Transport Public Private Communication Finance Owner occupied dwellings Government Services Education Health Other Govt ministries Non-profit institutions Others nec imputed bank service charge GDP (at fc) taxes on production less subsidies GDP (at mp) Nominal GDP growth rate mid year population per capita GDP ($) net factor income Gross national Product (GNP) per capita GNP ($)

1193 2551 -1398 40 1971 347

2132 3227 -1140 45 2240 131

1414 2790 -1426 50 2286 273

2956 3644 -743 55 2239 129

365 737 1988 5605 1050 3934 2963 971 1499 2460 1153 10378 2718 1503 6157 1079

199 911 969 6379 1259 4277 3395 882 1807 1953 1164 10943 2992 1627 6324 1257

353 1437 887 5735 1265 4720 3537 1183 2058 2236 1081 11552 3206 1692 6654 1318

406 1024 1082 6116 1309 5881 4707 1174 2678 2042 1597 12767 3311 1847 7609 1565

233 -1523 32469 7122 -669 38922

250 250 -1131 -949 34740 35916 7672 8820 -819 -709 41593 44027 6.9 5.9 74404 75460 559 583 37563 35400 79156 79427 1064 1053

73362 531 36323 75245 1026

1997

1998

1999

2000

2001

2002

20

1571 2066 -555 60 2517 85

3529 4956 -1487 60 2347 193

3988 5035 -1107 60 2270 538

-95 2530 -2685 60 2280 467

-329 2835 -3229 65 1728 428

-220 2715 -3000 65 2333 32

14 49 -35

629 571 530 624 939 554 819 1248 862 1356 1893 1196 1217 1180 1371 4378 4960 5026 6823 5723 5799 9496 7099 9257 1552 1142 1523 2171 2735 2136 4442 4580 6408 7187 7773 8646 3125 3180 4932 5691 6273 7126 1317 1400 1476 1496 1500 1520 2765 2872 3056 3225 3324 5314 2569 2934 3295 4458 4837 4693 1399 1684 1903 1839 1936 1766 13822 21140 21904 22416 25099 24606 3400 5508 5533 6042 6468 6735 2500 3000 3229 2377 3560 3733 7922 12632 13142.4 13996.3 15071.3 14138.7 1635 1690 1747 1725 1750 1775

644 2150 7593 10333 1932 7073 5558 1515 5855 5269 1583 28347 8900 4349 15098 1800

549 2233 4814 10468 1478 7848 6301 1546 5266 5061 1984 30688 9752 4586 16349 1815

6 21 35 97 13 93 77 15 36 51 17 342 103 52 186 18

2321 4106 -1845 60 2748 76

2829 3544 -775 60 2156 198

255 255 265 -875 -1274 -1379 41171 41798 48833 9243 11277 11599 -997 -1579 -1591 49417 51496 58841 12.2 4.2 14.3 76532 77658 79056 646 663 744 38477 45578 31890 87894 97074 90731 1148 1250 1148

316 -1331 51556 11334 -1151 61739 4.9 80479 767 57672 119411 1484

320 352 -1349 -1519 63914 67973 13684 14708 -1337 -1268 76261 81413 23.5 6.8 81927 83402 931 976 75438 63921 151699 145334 1852 1743

26

305 315 401 4 -1598 -1949 2027 -24 66328 72772 76776 752 15714 15783 17978 178 -1505 -1509 -2008 -30 80537 87046 92746 901 -1.1 8.1 6.5 84494 85922 87374 888 953 1013 1061 10 72094 88986 79887 710 152631 176032 172633 1621 1806 2049 1976 18

92


Table Real GDP by Industry :1991-2006 (1991 prices) A$('000) 1991 1992 1993 1994 1995 1996 1997 1193 997 2551 2882 -1398 -1926 40 41 1971 1862 347 148

1201 1520 192 727 176 3020 3451 3110 2684 1487 -1865 -1976 -2978 -2004 -1354 45 46 60 46 43 1663 1629 1998 1568 1790 71 250 226 403 314

1998

1999

2000

2001

2002

589 3234 -2685 40 1502 252

1844 3386 -1572 30 1453 292

-1159 1766 -2954 30 1459 497

-1321 1941 -3294 33 922 397

-1441 1756 -3230 33 1244 180

Agriculture Copra cutters Copra Society Other Fishing Seaweed Mining Manufacturing Electricity Construction Wholesale /Retail Hotel/Bars Transport Public Private Communication Finance Owner occupied dwellings Government Services Education Health Other Govt ministries Non-profit institutions

365 200 354 412 605 545 516 737 748 776 834 839 819 909 1988 969 845 1030 882 855 993 5605 6316 5623 5938 6823 5733 5664 1050 1326 1445 1256 1278 1477 1642 3934 4091 4440 5539 4200 4242 5782 2963 3260 3327 4431 2956 2965 4480 971 831 1113 1108 1244 1277 1302 1499 1537 1693 1774 1821 1993 2055 2460 2604 3833.14 4084 3853.5 3912 4393.5 1153 923 844 1181 1117 1313 1492 10378 10943 11001 12158 10013 15314 15868 2718 2992 3053 3153 2463 3990 4008 1503 1627 1611 1759 1811 2173 2339 6157 6324 6336 7246 5739 9151 9521 1079 1257 1255 1490 1184 1224 1266

635 991 1053 1180 3171 3593 8894 6599 1727 1440 6565 6928 5248 5651 1317 1277 2145 2209 5944 6449.47 1279 1288 16239 18182 4377 4686 1722 2579 10139 10918 1250 1268

575 1328 3641 8571 1437 7719 6425 1294 2296 6257.6 1401 17825 4879 2704 10242 1286

685 1389 4789 8908 1457 5948 4752 1196 2323 7025 1274 17878 5613 2743 9522 1304

581 1282 3036 8871 1591 6581 5357 1224 2407 6748 1608 19354 6151 2893 10311 1315

Others nec imputed bank service charge GDP (at fc) taxes on production less subsidies GDP (at mp) Real GDP growth rate mid year population per capita GDP ($)

233 250 -1523 -1508 32469 32663 7122 7672 -669 -819 38922 39516 1.5 73362 74404 531 531

232 -1799 49679 13684 -1337 62026 20.4 81927 757

221 -2131 51223 15714 -1505 65432 0.1 84494 774

199 -2599 50578 15783 -1509 64852 -0.9 85922 755

253 2703 56315 17978 -2008 72285 11.5 87374 827

238 243 185 192 229 -1627 -1750 -1911 -1839 -1775 33654 37587 33306 38478 41315 8820 9243 11277 11599 11334 -709 -997 -1579 -1591 -1151 41765 45833 43004 48486 51498 5.7 9.7 -6.2 12.7 6.2 75460 76532 77658 79056 80479 553 599 554 613 640

255 -2025 51945 14708 -1268 65385 5.4 83402 784

Table Employment : 2001—2006 (KPF source) 2002 3661 169 542 1114 5486 262 903 416 34 1615 175 8 183 7284

2003 3988 339 680 1191 6198 285 1092 483 52 1912 215 11 226 8336

2004 4466 377 807 1366 7016 415 1338 572 83 2408 269 11 280 9704

2005 4962 543 849 1471 7825 468 1655 655 146 2924 326 15 341 11090

2006 5565 707 1124 2132 9528 488 2148 822 251 3709 426 26 452 13689

annual increase

828

1052

1368

1386

2599

annual increase %

12.8

14.4

16.4

14.3

23.4

Central government Government projects Island Councils Public enterprises sub-total Island cooperatives Private businesses Churches NGO sub total Foreign entities Others sub total TOTAL

2001 3495 132 392 1026 5045 232 693 338 28 1291 113 7 120 6456

93


Table 1 Balance of trade : 1972 - 2006 ( A$ ' 000 ) Domestic Year

exports

Reexports

Total

Total

Balance

exports

imports

balance

1972

6599

0

6599

5415

1184

1973

11692

0

11692

6819

4873

1974

24054

0

24054

7546

16508

1975

27734

0

27734

9280

18454

1976

18147

0

18147

10062

8085

1977

18212

50

18262

11693

6569

1978

21396

50

21446

14115

7331

1979

21209

100

21309

15545

5764

1980

2402

200

2602

18263

-15661

1981

3377

200

3577

22830

-19253

1982

2017

335

2352

22772

-20420

1983

3688

315

4003

19606

-15603

1984

8769

3687

12456

20877

-8421

1985

5792

266

6058

21582

-15524

1986

2294

202

2496

21452

-18956

1987

2118

751

2869

25143

-22274

1988

5848

822

6670

28185

-21515

1989

5973

462

6435

28596

-22161

1990

2088

457

2545

34446

-31901

1991

2950

748

3698

33226

-29528

1992

5645

868

6513

50530

-44017

1993

4462

607

5069

40873

-35804

1994

6798

312

7110

36115

-29005

1995

8735

1295

10030

47547

-37517

1996

5978

839

6817

48583

-41766

1997

5686

2746

8432

52536

-44104

1998

8077

1223

9300

51923

-42623

1999

13021

1044

14065

63720

-49655

2000

5522

657

6179

67924

-61745

2001

5978

488

6466

75008

-68542

2002

5176

1146

6322

91585

-85263

2003

5365

794

6159

79496

-73337

2004

5505

213

5718

80753

-75035

2005

7189

644

7833

100081

-92248

2006

4210

455

4665

84538

-79873

94

Government of Kiribati Sustainable Development Plan  

Government of Kiribati Sustainable Development Plan

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