Kiribati’s unique economic structure
By James Webb
With 110,136 people spread across 33 atolls and 3.5 million square kilometres of ocean, Kiribati faces significant economic and service delivery challenges. In addition to being one of the most vulnerable countries in the world, and one most affected by climate change, other challenges stem from a highly dispersed population, remoteness to major markets, lack of arable land, a narrow economic base, and the dual problems of sparse outer island communities and heavy overcrowding in the capital.
This blog series looks at the challenges facing Pacific island countries graduating from least developed country (LDC) status, focusing on Kiribati, whose graduation is currently under review. This blog focuses on Kiribati’s economic structure, an understanding of which is essential to appreciate the likely impact of LDC graduation.
Let us compare the economic structure of Kiribati with other Pacific and small island developing countries: Samoa and the Maldives (which have already graduated), and Vanuatu (which is facing graduation in 2020). Presented below is the economic structure of each country just prior to LDC graduation.
Figure 1: Small island LDCs – contributions to GDP in the year prior to LDC graduation
As shown above, the economic structure of Kiribati differs markedly from the other three countries. Most striking is the reliance on fishing, which accounts for 26.1 per cent of the Kiribati economy, compared to an average of 2.0 per cent across the other three. There is also a much heavier reliance on government consumption (25.7 per cent in Kiribati versus an average of 10.3 per cent for the others).
Among its three peers, the retail and services sectors made up the majority of the economy even prior to graduation from LDC status, and was also the major source of growth. In contrast, between 2011 and 2016, Kiribati grew an average 6.2 per …read more