Pacific Studies Series Studies Pacific Pacific Studies Series Kiribati Social and Economic Report 2008 After two impressively peaceful decades, there are signs of a dangerous degree of complacency in Kiribati’s view of its domestic and external affairs. Forms of cultural and political resistance to change have thus been encouraged, and these are handicapping the nation’s response to development risks. Eight leading sources of development risk confronting Kiribati are identified, and these require understanding and appropriate responses in the form of well-formulated national development strategies. Based on a thorough assessment of risks, priorities, and options by sector in the main report, 16 policy actions are recommended as keys to the full range of responses that need to be formulated to cope with development risk. About the Asian Development Bank 2008 Report KiribatiEconomic and Social ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Kiribati Social and Economic Report 2008 MANAGING DEVELOPMENT RISK Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org ISBN 978-971-561-777-2 Publication Stock No. BBK221008 Printed in the Philippines Pacific Studies Series Kiribati Social and Economic Report 2008 © 2009 Asian Development Bank All rights reserved. Published 2009. Printed in the Philippines. ISBN 978-971-561-777-2 Publication Stock No. BBK221008 Cataloging-In-Publication Data Asian Development Bank. Kiribati social and economic report 2008: managing development risk Mandaluyong City, Phil.: Asian Development Bank, 2008. 1. Development. 2. Risk management. 3. Kiribati. I. Asian Development Bank. Th e views expressed in this book are those of the authors and do not necessarily refl ect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. Use of the term “country” does not imply any judgment by the authors or ADB as to the legal or other status of any territorial entity. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Department of External Relations Fax +63 2 636 2648 [email protected] Contents Acronyms vi Glossary of Kiribati Terms viii Foreword ix Executive Summary 1 I. Growing Risk in the Development Process 13 and National Response Overview of Kiribati 13 Leading Sources of Development Risk 20 Strategic Priorities and Policies for Managing Development Risk 26 II. Social Response to Development Risk 29 Population and Migration 29 National and Local Governance 36 Environment and Climate Change 45 Education and Training 54 Wages, Employment, and Emigration 68 Health and Welfare 79 III. Economic Response to Risk 95 Promoting and Financing the Private Sector 95 Marine Resources 105 Land, Subsistence, and Commercial Agriculture 116 General Economic Activity 123 Utilities, Transport, and Infrastructure 130 Developing the Line and Phoenix Islands 137 IV. Development Risk in the Public Sector 151 Need to Improve Public Enterprises 152 Performance of the Public Service 165 iv Kiribati Social and Economic Report 2008 Strengthening Fiscal Management 173 Government Machinery for Managing Development Risk 186 Making Aid More Eff ective 188 References 197 Appendixes 1. Data Tables 201 2. Persons Consulted 233 Boxes Box 1: Th e Political and Social Environment for Economic Reform 41 Box 2: Business and Industrial Estates or Parks 99 Box 3: A Case Study: Public Enterprises in the Telecommunications Sector 163 Box 4: Planning and Monitoring System 170 Box 5: Strengthening Governance of the Revenue Equalisation Reserve Fund 181 Tables Table 1: Number of Students Enrolled in Kiribati Schools by Level, 2003–2006 57 Table 2: Gender Balance in Kiribati School Enrollment by Level, 2006 57 Table 3: Summary of AusAID and NZAID Scholarships Awarded to Kiribati Students, 2000–2007 65 Table 4: Estimated Number of Formal Employment Openings, Training Institution Opportunities, and Graduates Employed Annually in Kiribati, 2007 73 Table 5: Basic Health Indicators for Kiribati 81 Table 6: Indicators Related to Pregnancy and Birth in Kiribati 85 Table 7: Incidence of Selected Crimes in Kiribati, 2000–2006 91 Table 8: Number of Licenses Issued for Selected Business Categories in South Tarawa, 2006–2007 100 Table 9: Licensed Foreign Fishing Vessels in the Kiribati Exclusive Economic Zones: Annual Average, 2004–2006 108 Table 10: Average Annual Household Income in Kiribati by Island Group 119 Contents v Table 11: Public Enterprises in Kiribati 154 Table 12: Kiribati Central Government Operations, 2002–2007 175 Table 13: Kiribati Development Fund Budget by Donor, 2005–2007 190 Figures Figure 1: Kiribati Nominal Gross Domestic Product, Gross National Income, and Net Factor Income, 1997–2006 17 Figure 2: Kiribati Nominal Gross Domestic Product and Gross National Income Per Capita, 1997–2006 18 Figure 3: Kiribati Balance of Payments Current Account, 1997–2006 19 Figure 4: Kiribati Population Distribution by Age and Sex, 2005 32 Figure 5: Government of Kiribati Structure for Overseeing Climate Change Adaptation Policy 51 Figure 6: Percentage of Budget Allocations and Students Attending Church and Government Senior Secondary Schools in Kiribati, 2006 55 Figure 7: Proportion of Qualifi ed Teachers in Kiribati Schools by Level, 2003–2006 58 Figure 8: Proportion of Certifi ed Teachers in Kiribati Schools by Level, 2003–2006 59 Figure 9: Persons Reporting Paid Employment in Kiribati by Census, 1985–2005 69 Figure 10: Educational Levels of the Kiribati Workforce, 2005 71 Figure 11: Changes in Access to Safe Water and Sanitation, and Infant Mortality in Kiribati 80 Figure 12: Suicides Reported in Kiribati, 2000–2006 86 Figure 13: Reported Cases of Underage Drinking and Drunkenness in Kiribati 88 Figure 14: Annual Household Expenditure by Expenditure Group in Kiribati 120 Figure 15: Number of Norwegian Cruise Line Passengers Visiting Tabuaeran Annually, 2002–2005 148 Figure 16: Kiribati Central Government Operations, 1994–2007 176 Acronyms ADB – Asian Development Bank APTC – Australian Pacifi c Technical College AusAID – Australian Agency for International Development BOK – Bank of Kiribati CCA – Climate Change Adaptation CPPL – Central Pacifi c Products Limited DBK – Development Bank of Kiribati EDF – European Development Fund EEZ – exclusive economic zone EU – European Union FFA – Forum Fisheries Agency FHA – Family Health Association FTC – Fisheries Training Centre GDP – gross domestic product GEF – Global Environment Facility GNI – gross national income ILO – International Labour Organization JSS – junior secondary school KAP – Kiribati Adaptation Programme KCCS – Kiribati Copra Cooperative Society KEMIS – Kiribati Educational Management Information System KHC – Kiribati Housing Corporation KIDP – Kiritimati Island Development Plan KIT – Kiribati Institute of Technology KNAO – Kiribati National Audit Offi ce KOIL – Kiribati Oil Company Limited KPA – Kiribati Ports Authority KPF – Kiribati Provident Fund KSSL – Kiribati Shipping Services Limited KTC – Kiribati Teachers’ College Acronyms vii MCIC – Ministry of Commerce, Industry and Cooperatives MELAD – Ministry of Environment, Land and Agricultural Development MEYS – Ministry of Education, Youth and Sports MFED – Ministry of Finance and Economic Development MFMRD – Ministry of Fisheries and Marine Resources Development MHMS – Ministry of Health and Medical Services MISA – Ministry of Internal and Social Aff airs MLHRD – Ministry of Labour and Human Resources Development MOP – ministry operational plan MTC – Maritime Training Centre NAPA – National Adaptation Programme of Action NCL – Norwegian Cruise Line NEPO – National Economic Planning Offi ce NGO – nongovernment organization NSO – National Statistics Offi ce NZAID – New Zealand’s International Aid & Development Agency PIER – Pacifi c Islands Economic Report PIPA – Phoenix Islands Protected Area PSO – Public Service Offi ce PUB – Public Utilities Board RERF – Revenue Equalisation Reserve Fund SAPHE – Sanitation, Public Health, and Environment Improvement Project SAS – subregional audit support (program) SOPAC – Pacifi c Islands Applied Geoscience Commission SPC – Secretariat of the Pacifi c Community SPMS – South Pacifi c Marine Services SSS – senior secondary school STI – sexually transmitted infection UN – United Nations UNDP – United Nations Development Programme UNICEF –