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Tuvalu Country Report

Country Risk Level


Overview

Executive Summary

Prime Minister Enele Sopoaga has been in power since 2013. He has been increasingly vocal about the threat to Tuvalu from climate change and this has reinforced the core of his public support.Tuvalu's meagre land resources constrain industrial development, although some opportunities for foreign direct investment (FDI) exist, such as seafood processing and tourism. Transport to the country is limited, and internal transport costs are high because of the lack of infrastructural development. Industrial action has not been an issue in Tuvalu's recent history.Due to its tiny consumer base and relative remoteness, Tuvalu's economic growth outlook remains reliant on the large public sector and on foreign donor-financed projects. Domestic consumption and investment financing arises primarily from external sources, including foreign aid, workers' remittances, an internationally invested trust fund, and licence fees from foreign fishing vessels, thus exposing the economy to external shocks.

Operational Outlook

Tuvalu's meagre land resources constrain industrial development, although some opportunities for foreign direct investment exist, such as seafood processing and tourism. The government is actively promoting an AUD400-million land-reclamation initiative, which seeks to expand Tuvalu's land mass by more than 60%, although most foreign investors and donors – with the notable exception of China – remain sceptical. Foreign-investment proposals are considered on a case-by-case basis, and the government generally displays an accommodating attitude towards overseas firms. Transport to the country is limited, and internal transport costs are high because of the lack of infrastructural development. Industrial action has not been an issue in Tuvalu's recent history.

Terrorism

There is no known terrorist threat in Tuvalu.

Crime

Crime levels are low in Tuvalu, although foreigners face petty crime and theft risks. The country has a small police force of less than 100 personnel headquartered in Funafuti, which comprises the Maritime Surveillance, Immigration, Prison, and Customs units. Although Tuvalu lacks a formal sector of organisations exclusively providing security services, many people are employed to provide security throughout industries in the public sector. There is little evidence of financial crime in the country, and Tuvalu has never been cited as having strategic anti-money-laundering (AML) deficiencies by the Financial Action Task Force.

War Risks

Tuvalu does not have a military and operates a single patrol boat provided by Australia. It faces no external threats.

Social Stability

There is a small risk of protests by public‐sector workers in Tuvalu during the next 12 months, but any labour unrest is likely to be peaceful. The International Labour Organisation's Labour Law reform work, a project aimed at assisting the government with reform of existing labour laws and creation of new legislation, is likely to decrease the risk of protests by workers. There is similarly a low risk of small-scale anti-government political protests in Funafuti.

Risk Level
Critical High Medium Low Minimal