Economic performance

Higher wages and allocations for one-time development expenditures on new schools,
government buildings, and outer island projects account for the 52% increase in

planned government expenditures for 2015.

The reconstruction of infrastructure damaged by Cyclone Pam, the commencement of
other large infrastructure projects, and continued fiscal expansion promise to offset
the damage and economic losses caused by the cyclone in early 2015, which are

estimated at the equivalent of 10% of GDP.

Fishery exports and fishing license fees continue to provide large inflows of foreign
exchange, but prospects for earnings from these sources are uncertain over the

medium term.
Higher fiscal spending in Tuvalu prompts a modest upward revision to its inflation
outlook. While a larger fiscal budget encourages the domestic economy, concerns
linger about the sustainability of the governments recent fiscal policies. A slight
increase in value-added and excise tax collections is expected, but there has been no
consistent improvement in revenues from personal or corporate income taxes.

Economic prospects

Like other small islands economies, Tuvalus economy is driven largely by

government spending on infrastructure projects. Overall, the Asian Development

Outlook 2015 projections for growth are unchanged.

Remittances look likely to remain significantly below inflows recorded in 2014 but
are seen to pick up in 2016 as conditions in advanced economies improve.

(Excerpted from the Asian Development Outlook 2015 Update)

Kinerja Ekonomi

Upah lebih tinggi dan alokasi untuk belanja pembangunan satu kali di sekolah baru,
gedung-gedung pemerintah, dan proyek-proyek luar pulau memperhitungkan

peningkatan 52% dalam pengeluaran pemerintah direncanakan untuk tahun 2015.

Rekonstruksi infrastruktur yang rusak akibat Topan Pam, dimulainya proyek-proyek
infrastruktur besar lainnya, dan terus ekspansi fiskal janji untuk mengimbangi
kerusakan dan kerugian ekonomi yang disebabkan oleh topan pada awal 2015, yang

diperkirakan setara dengan 10% dari PDB.

Ekspor perikanan dan biaya lisensi memancing terus memberikan arus masuk besar
devisa, tetapi prospek pendapatan dari sumber ini adalah tidak pasti dalam jangka

menengah.
Belanja fiskal yang lebih tinggi di Tuvalu meminta revisi atas sederhana untuk
outlook inflasi. Sementara anggaran fiskal yang lebih besar mendorong ekonomi
domestik, kekhawatiran berlama-lama tentang keberlanjutan kebijakan baru fiskal
pemerintah. Sebuah sedikit peningkatan nilai tambah dan cukai koleksi yang
diharapkan, tapi belum ada perbaikan yang konsisten pendapatan dari pajak
penghasilan pribadi atau perusahaan.

Prospek Ekonomi

Seperti pulau-pulau kecil lainnya ekonomi, ekonomi Tuvalu umumnya didorong oleh
belanja pemerintah pada proyek-proyek infrastruktur. Secara keseluruhan, Asian

Development Outlook 2015 proyeksi untuk pertumbuhan tidak berubah.

Pengiriman uang melihat kemungkinan untuk tetap jauh di bawah arus masuk yang
tercatat pada 2014, tetapi terlihat untuk menjemput di 2016 sebagai kondisi di negara
maju meningkatkan.

Will Pacific Island Nations Disappear as Seas Rise?

Maybe Not

"If you were faced with the threat of the disappearance of your nation, what would you do?"
That's the question Enele Sopoaga, the prime minister of the tiny Pacific Island nation of
Tuvalu, asked fellow world leaders at the United Nations climate summit in Lima, Peru, in
December.
It's a question that leaders of Pacific Island states have been asking for decades. As a
warming climate drives sea levels upward, low-lying island nations face an uncertain future
or no future at all, say these leaders, who warn of their nations' imminent disappearance.
Officials in Tuvalu, 600 miles (965 kilometers) north of Fiji, have been some of the most
vocal critics of the world's large greenhouse gas emittersindustrialized nations such as the
United States and Chinawhich they accuse of not doing enough to curb emissions,
contributing to the melting of ice sheets and rising seas.
"I carry a huge burden and responsibility," Sopoaga told the climate summit delegates in
Peru. "It keeps me awake at night. Will we survive? Or will we disappear under the sea?"
These are desperate questions. But how real is the threat? Are island nations like Tuvalu,
where most of the land is barely above sea level, destined to sink beneath the waves, like
modern-day Atlantises?
Not necessarily, according to a growing body of evidence amassed by New Zealand coastal
geomorphologist Paul Kench, of the University of Auckland's School of Environment, and
colleagues in Australia and Fiji, who have been studying how reef islands in the Pacific and
Indian Oceans respond to rising sea levels.
They found that reef islands change shape and move around in response to shifting
sediments, and that many of them are growing in size, not shrinking, as sea level inches
upward. The implication is that many islandsespecially less developed ones with few
permanent structuresmay cope with rising seas well into the next century.
But for the areas that have been transformed by human development, such as the capitals of
Kiribati, Tuvalu, and Maldives, the future is considerably gloomier. That's largely because
their many structuresseawalls, roads, and water and electricity systemsare locked in
place.

Their analysis, which now extends to more than 600 coral reef islands in the Pacific and
Indian Oceans, indicates that about 80 percent of the islands have remained stable or
increased in size (roughly 40 percent in each category). Only 20 percent have shown the net
reduction that's widely assumed to be a typical island's fate when sea level rises.
Some islands grew by as much as 14 acres (5.6 hectares) in a single decade, and Tuvalu's
main atoll, Funafuti33 islands distributed around the rim of a large lagoonhas gained 75
acres (32 hectares) of land during the past 115 years.
Two-thirds of the reef islands in the study migrated lagoon-ward as their ocean-side
coastlines eroded and sediment built up on the side facing the lagoon. One of Funafuti's
islands shifted more than 350 feet (106 meters) over 40 years.
Reef islands, Kench says, are among the most dynamic landforms on Earth. And Tuvalu's are
some of the most dynamic on record.
With a scant ten square miles (26 square kilometers) of dry land, Tuvalu is one of the smallest
countries in the world. Although there are many atolls and islands in the group, which lies
midway between Australia and Hawaii, more than half of Tuvalu's 12,000 people live on just
one islandFongafaleon the eastern rim of Funafuti atoll.
Business as Usual
I first came to Tuvalu ten years ago, my interest piqued by news reports suggesting (and
sometimes stating outright) that the islands were doomed. Journalists had latched on to
countries such as Tuvalu, Kiribati, and Maldives as the environmental hard-luck stories of the
new millennium.
These postcard paradises had become poster children for a planetary crisis, with their
inhabitants cast as the world's first climate refugees. "Tuvalu Sinks TodayThe Rest of Us
Tomorrow?" was a typical headline.
A prominent environmental campaigner had declared that Tuvalu's leaders had "conceded
defeat in their battle with the rising sea, announcing that they will abandon their homeland."

A similar claim was made in Al Gore's documentary, An Inconvenient Truth.

"The evacuation and shutting down of a nation has begun," reported the British Guardian
newspaper.
That islands like Tuvalu face an intensifying barrage of climate impacts is not in
doubt.Besides the damage inflicted by sea-level rise itselfcoastal erosion, surface flooding,
and saltwater intrusion into soil and groundwaterthey will suffer from increasingly
frequent and severe weather extremes (droughts and cyclones) and die-offs of their coral reefs
through ocean warming and acidification, leading to potential collapse of marine ecosystems
that provide food and livelihoods for island dwellers.
But from what I could see, in 2004 it was business as usual in Funafuti. Government staff
were about to move into a brand-new building overlooking the lagoon. The country's first
cell-phone tower had just been erected. Tuvalu was enjoying a windfall profit from the sale of
its "dot tv" Internet suffix. Tuvaluans seemed in no hurry to evacuate their supposedly
disappearing homeland.
In November 2014, armed with Kench's findings, I returned to Tuvalu to see whether
anything had changed. The first thing I noticed was that Fongafale was even more crowded
than before. According to the 2012 census, Fongafale's population had increased by 1,500
since my earlier visit, to more than 6,000. So much for the shutting down of a nation.
Island Building
I hired a fishing dory and made a spray-drenched trip across Funafuti's 106-square-mile (275square-kilometer) lagoon to an uninhabited island called Tepuka. It has the classic appearance
of an atoll island: a pancake of sand with a mop of vegetation and, floating above, a confetti
of seabirds.
Such islands look static, but they are perpetual construction sites. Their surrounding coral
reefs are factories that produce a constant supply of raw building material: calcium carbonate.
The factory "workers" are biological agents that turn the skeletons of corals and other
carbonate-containing creatures into sediment. Fish, sea urchins, and sponges are the principal

processors. In one year they can produce four pounds of sediment per square foot (21
kilograms per square meter) of reef.
Mollusks, calcium-secreting algae, and tiny marine creatures called foraminifera add to the
sediment supply. Tepuka's beaches have an orange tinge from billions of foraminifera
skeletons.
Geomorphologists, who study landforms, speak of an island's "carbonate budget"its
sedimentary profit-and-loss account. On the income side of the ledger is the rubble, gravel,
and sand produced by the reef ecosystem or imported into it, by storms, for instance. On the
expenditure side is sediment lost by being abraded to microscopic fineness, dissolved in
seawater, or exported by waves or currents into the deep ocean.
The budget can stay more or less balanced for decades, centuries, even millennia, and then
experience a sudden blowout, as when Cyclone Bebe hit Funafuti in 1972. Overnight the
storm deposited a 12-mile (19-kilometer) ridge of coral rubble up to 13 feet (4 meters) high.
That material was worked into the matrix of several reef islands on the southeastern side of
the atollthe side that took the brunt of Bebe's forceincreasing the land area by 10
percent.
Tepuka, on the western side, missed out on the Bebe deposit and is one of a handful of
Funafuti's islands that have been shrinking. On the ocean side of the island, a three-foot-high
(one meter) scarp of sandy soil up against the vegetation showed where wave action was
scouring away the land.
I'd seen this kind of erosion on island coastlines elsewhere in the world and had assumed it
was evidence of irreversible loss. But Kench's work offers a different narrative: abrasion on
one side of an island, accretion on the other, with entire islands shifting on their reef
platforms in response to wind, waves, and sea-level change.
Yes, islands erode, Kench says, and that's often what people focus on: broad beaches where
they used to play soccer as kids now reduced to a narrow patch of sand. Or perhaps the edge
of a property crumbling into the sea. Or a family grave undermined by the tide.

"But they often forget to look at the other sides of the islands, where beaches are growing,"
Kench adds.
In Tepuka's case, a net loss in area of 22 percent since 1896 is only part of the story. The
island has undergone an almost constant reworking of its sedimentary material during the
past century. It's grown longer (by 550 feet, or 170 meters) and narrower (by 390 feet, or 120
meters), and its position has rotated clockwise on the reef.
Although it's shrinking now, a big-enough storm could push Tepuka's sediment budget back
into the black. It's happened before. Geological surveys across the island have shown that at
times, large sections have been washed over by the sea, with tons of sediment deposited on
top of the existing vegetation.
The lesson of Tepuka, Kench says, is that it's important to focus on what sediment is doing
and not just on sea level.
Rising Seas Don't Equal Sinking Islands
Tepuka is very young, having formed 500 to 1,000 years ago. Polynesianswhose
occupation of the islands is thought to go back more than 2,000 yearsmight well have
watched it grow.
Tepuka's young age, says Kench, places its formation within a period of stable global sea
levelwhich runs counter to the idea that reef islands can form only when falling sea levels
trigger the processes of island building.
Other work by Kench shows that such islands can form even when sea level is rising rapidly.
His analysis of the sediments on Jabat, in the Marshall Islands, indicates that the island
started forming nearly 5,000 years ago, when the oceans were rising to a peak of more than
three feet (one meter) higher than today's sea levela point that is likely to be reached again,
or exceeded, by the end of this century, according to predictions by the International Panel on
Climate Change.
High-energy storm action built Jabatthe very condition that's forecast to occur with greater
frequency as the planet's atmosphere warms.
Kench's findings suggest that rising sea levels today might reactivate processes of island
building that have long been relatively dormant.

"If sea-level rise does ramp up to the levels they're talking about," Kench says, "I would
expect islands to start showing increased rates of change. The faster sea level goes up, the
more dynamic these islands are going to appear."
Reef Loss, Island Gain
Some climate specialists believe that rising sea-surface temperatures and increasing ocean
acidity may have an even more damaging impact on coral reefs than that caused by sea-level
rise.
Since the beginning of the industrial period, some 250 years ago, the acidity of tropical
surface waters has risen by 30 percent. Sea-surface temperatures have increased by about
1.8F (1C) during the past century.
High water temperatures kill corals, and acidification affects their ability to produce their
skeletons, since calcium carbonate dissolves in acid. Laboratory experiments suggest that the
calcification rate of some corals could decrease by a third over the next three to five decades.
Yet a reef's loss of living coral can be an island's gainat least in the short term. In 1998,
when a worldwide coral bleaching event killed up to one-sixth of the world's reefs, a huge
repository of coral rubble became available for island building. If heat-related coral die-offs
occur in coming decades, the sediment supply for islands is likely to increase.
But Kench cautions that scientists don't yet have a clear understanding of how changes in
ocean chemistry will affect coral reefs, or how that might translate to islands. "We don't have
a good handle on the time lag between when coral is killed and when it becomes available to
an island as sand," he says.
Over the time scales that matter to island nationsthe next few decades when they'll be
seeking to adapt to land changesthe critical factor, Kench says, is the reworking of sands
and gravels around the reef islands. "And that's controlled by wave processes and whether
there's sediment available. If sand is still being produced, islands are able to adjust and
maintain their area."
For Urban Islands, an Uphill Battle

"Urban islands are in trouble because they've lost their capacity to adapt," Kench says.
"They're environmentally degraded. Their reefs are damaged, the sedimentation processes are
undermined, and the islands aren't actively connected to their reefs. For densely urban
centers, the only strategies to cope with rising sea levels will be engineered ones."
Mal, the capital of Maldivesa 1,200-atoll archipelago in the Indian Ocean, and one of the
countries predicted to be most affected by climate change and rising seasis such an island.
It's encircled by built structures such as seawalls, breakwaters, harbors, and artificial beaches.
"Heavily fortified," is how Mohamed Aslam, an oceanographer by training and until 2012 the
environment minister for Maldives, described it to me.
"There's no room for natural processes to take place," he says. "I suppose if you spent enough
money, you could continue to keep the sea out. But it's prohibitively expensive for a country
with a small population and a small GDP to do that sort of thing on every island."
But urbanized atoll islands are the exception in the Pacific. For less developed islands,
supporting much smaller populations, Kench can foresee a future in which people coexist
with island changes by developing agricultural practices that circumvent the problems of
salinized soils, by harvesting and using fresh water more efficiently, and by building cycloneresistant structures such as pole houses, which allow storm surges to wash through with
minimal damage.
Aslam agrees that a combination of natural processes and human intervention may enable
island communities to cope with climate impacts. But he believes that the time horizon for
adaptation is limited.
He likens the situation to a person's immune system fighting an infection.