economy

Economically, Kiribati has had difficulty since the Banaban phosphate deposits were depleted, which generated A$18 million (Australian dollars) in its final year of operation. In the three-year period from 1979 to 1982, the trade surplus of US$7 million became a US$15 million trade deficit. The monetary unit used in Kiribati is the Australian dollar.

The largest cash crop in Kiribati is copra, which is dried coconut meat. The islanders who grow and dry it on their own land, mostly in the Gilberts, account for about eighty percent of the copra production. About twenty percent of the copra is grown on plantations on Kiritimati and other atolls. Copra exports generate about A$4 million annually.

With vast seas, Kiribati is abundant with fish. The tuna and other species are a vital protein source for a large number of the islanders. In 1981, the Kiribati government created its own fishing company, Te Mantari, to tap the resources of the seas for export. The catch is purchased by a Star-Kist cannery in American Samoa.

Several countries, including Japan, South Korea, Taiwan and the United States, have negotiated agreements for the rights to catch skipjack and yellowfin tuna in the waters of the Phoenix Group. These deals produced royalties of A$2.9 million in 1991. In 1985, a fishing pact with the U.S.S.R. was arranged, but was not renewed the following year.

Tourism is as yet a relatively undeveloped industry. There are but five hotels, four of which are on Tarawa (the other is on Kiritimati). There are rest-houses in some areas, but none accept traveler's checks, and credit cards are rarely honored. There are just two car rental agencies, both on Tarawa, but less than twenty miles of paved roads exist on which to drive.

The lack of major commercial air service and adequate ports for large vessels makes tourism somewhat more troublesome. Indeed, to fly from Tarawa to Kiritimati, it is necessary to travel through Honolulu, Hawaii. The nation's airline, Air Tungaru, provides regular air service, though the number of flights ranges from one to four flights weekly. Its tiny fleet limits its ability to provide coverage for more than the Gilberts. The largest aircraft in the fleet is one Boeing 737.

The aforementioned lack of adequate ports impacts the shipping industry as well. Kiribati has only three ports which are capable of handling large vessels, and all must drop anchor at sea and load and unload using tugs and barges because of the reefs. The islet of Betio on Tarawa is the only port which has facilities for the handling of container ships. Other ports are on Banaba and Kiritimati. On the average, one ship calls at a Kiribati port every six days through the year. Cruise ships do not stop at Kiribati due to the lack of services and attractions for tourists.

Because most of the islands consist of coral sands, there is very little arable land. Let's face it: there is very little land at all (various sources list from as little as 275 square miles to as much as 328 square miles, perhaps depending upon the tides). Because of the poor soil (where there is any) crops which are intolerant of salt water are grown with great difficulty. Therefore, food imports comprise one-fourth of all goods brought into the country. Fish are the most important and plentiful food, and many supplement their diets with copra, papayas, pandanus, breadfruit, and bananas. In addition, pigs, chickens and other fowl are raised in some areas. All foods grown or raised on the islands are subject to drought or inundation by the waves. The World Health Organization has encouraged the I-Kiribati to create gardens in which to grow fruits and vegetables, partucularly those with Vitamin A.

Industry as is known in the United States does not exist. The primary occupations of those who do not work for the government are canoe and house builders (who hold great status in their communities), fishermen, farmers, and miners and mariners overseas. Some of the I-Kiribati make small handicrafts and toys which are sold for export, but these create little income.

The shutdown of the phosphate mining industry in 1979 caused a substantial swing in the country's balance of trade. Kiribati is dependent upon aid from the United Kingdom, the United Nations and the Asian Development Bank to meet its obligations. Kiribati receives foreign aid at an approximate rate of US$200 per capita, which is one of the highest in the world. Per capita income stands at about US$700 per year, rising at an annual rate of less than 2 percent.

One of the most exciting developments in the country is the Japanese investment of US$8 billion for the development of a space center on Kiritimati. When operational, the station will be used to launch satellites into orbit. The Japanese already have a tracking station located on the atoll. This project is particularly significant because the nation has had problems in developing the Phoenix and Line Groups in order to encourage migration from densely-populated Tarawa and the other Gilberts.

introduction | history | geography | land | population | economy
government and politics | people | outlook | conclusion | references | appendix

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