PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i


The Contemporary Pacific
Vol. 19, No. 1, Spring 2007, pp. 276-286

Political Reviews

Polynesia in Review: Issues and Events, 1 July 2005 to 30 June 2006

Tuvalu 

Tauaasa Taafaki

The World Summit on Sustainable Development held in Johannesburg in 2002 provided the impetus for Tuva­lu's first-ever National Summit on Sustainable Development, which took place from late June through early July 2004 . Invited participants included several from each island (chiefs, elected councilors or kaupule, women, and youth delegates), representatives from each of the eight island communities on Funafuti, senior officials, ministers, politicians, and representatives from youth groups, faith-based organizations, women's associations, regional bodies (South Pacific Applied Geoscience Commission, Forum Secretariat, Pacific Regional Environment Programme, University of the South Pacific), and business houses. Four or five expatriate Tuvaluans working abroad (including myself) were also invited by the government to act as resource people at the summit. The purpose of the summit was to consult widely and map out strategies for Tuvalu's development over the next ten years ( 2005–2015 ). An estimated four hundred people gathered in Funa­futi at the Tausoa Lima Falekau­pule (Council of Elders Meeting Hall) for the summit.

In an attempt to demonstrate political neutrality, the government agreed that Minister of Finance Bikeni Paeniu [End Page 276] and Leader of the Opposition Kamuta Latasi would cochair the summit. The two of them skillfully steered the meeting through difficult and sensitive issues, kept the interest of the participants alive through good humor, prompted the discussion when there might have been a stalemate, and tactfully managed the more vocal participants to ensure that everyone had a chance to express his or her views.

The entire summit was therefore characterized by the rich quality of consultation and expressions of genuine concern over the country's development needs—specific to each island and also common to all. The diversity of participants and the different and rich cultural and traditional nuances they brought to the summit added flavor to a fully consultative and participatory meeting. The combined contributions of all the delegates, their active participation and keen interest, and the support of various island com­munities who provided abundant refreshments, all made for a most ­creative and enriching experience.

This was the first time that such an extensive consultation had taken place at the national level regarding the country's development. National development strategies have hitherto been widely understood as the sole preserve of the government. A few years before, only the planning office—mostly staffed by expatriate officers—was assumed to possess the skills and knowledge to write development policies and strategies for Tuvalu. In fact, an expatriate officer from one regional organization said his special mission at the summit was to develop and write the vision statement for Tuvalu. However, the quality of what transpired proved that such assumptions are no longer valid.

Eight main thematic areas were agreed to and formed the substantive agenda: strengthening macroeconomic stability; improving the provision of social services; improving development of the islands and Falekaupule (Council of Elders); creating employment opportunities and enhancing private sector development; improving capacity and human resources development; developing Tuvalu's natural resources; improving the provision of support services; mainstreaming of women in development; and good governance.

After each plenary session, the large gathering usually split up into four groups to discuss the items in more depth and to come up with findings. Both the plenary and group discussions were considered to be of very high quality. Visits to the islands and the different island communities by task groups from the Ministry of Finance to familiarize people with the agenda preceded the actual summit. The submissions from the islands and island communities were therefore very well prepared and clearly articulated. This led to focused, engaged, and stimulating general discussions. Such extensive consultation, especially in a fragmented place like Tuvalu where transportation and movement of people is difficult and requires considerable effort to coordinate, does not come cheap. However, many ­delegates applauded support for the process and the inclusion of a large number of people; many also felt excited at actually being part of making the country's development plans [End Page 277] and policies. For a great number of participants, the summit presented a fertile arena to learn from and share ideas with one another. A traditional high chief described the summit as the most important historical gathering ever held in Tuvalu since its independence in 1978 .

However, two things appeared to mar the summit. The first issue involved the absence of most of the permanent secretaries in many of the discussions. When questioned about this, the secretary to government surprised everyone by saying that the permanent secretaries were too busy with their work and attendance would mean no one would be "on watch." Since permanent secretaries are known to be away often on overseas trips, the explanation did not make much sense. The fact that the chiefs, traditional leaders, and cabinet ministers, as well as the overseas participants had all taken time off to attend the summit made the absence of permanent secretaries culturally and professionally unacceptable.

Second, the manner in which one or two of the ministers asked questions and directed their concerns to the government during the debates had the mark of betrayal. It is one thing to offer personal insights on how things might be undertaken or improved, but it is another for individuals to openly criticize government policies as though they were not part of the decision-making process. In fact, the openly critical comments foreshadowed a political coup. A month later, Saufatu Sopoanga was dethroned as prime minister by a motion of no confidence.

A number of major resolutions emerged from the summit. The first stressed that sustainable development was dependent on good governance and recommended strengthening the oversight of the functions of public institutions to improve accountability and transparency. Economic growth was needed for improving standards of living, and the summit called for a review of the public service, state-owned enterprises, and improvement in budget management including providing a stable macroeconomic environment. Recognizing the fluidity of the political leadership in the country, the summit also resolved that the sustainable development strategies agreed on at the summit would remain operational and effective despite any changes in government during the planning period. After the summit, the government met with development partners to discuss how the plan might be funded and implemented.

The summit also produced a historical document called the Malefatuga Declaration, after the traditional name of the area where the summit was held (the old meaning of malefatuga is "challenge," the place where conflicts are resolved. Its modern usage is "place of identity and confidence, where good deeds are recorded"). The Malefatuga Declaration was signed by the two cochairs, all the island head chiefs, and representatives of the private sector, women's council, and national youth association, all pledging their commitment "to the full implementation of the strategic priorities and key actions as adopted through [the various] resolutions." The Malefatuga Declaration also affirmed a commitment to ensuring [End Page 278] effective monitoring and assessing the impact of the agreed strategies and action plans. The resolutions and ­conclusions of the summit, and the Malefatuga Declaration, provided the foundation for, and helped to inform, the preparation of Te Kakeega II, the country's National Strategy for Sustainable Development for the period 2005–2015 .

The launch of the impressive new central government office complex coincided with the end of the summit. These two events were cause for much feasting, celebration, and traditional entertainment. Taiwan's deputy min­ister of foreign affairs, Michael Kau, was the guest of honor in a celebration that marked the launch of the new building. The imposing three-floor administration office complex, which towers over the rest of Funa­futi Island and includes large water cisterns in the basement, was funded by the government of Taiwan at a cost of US$8 million. But as one participant commented, "The test of a new building is how well it is maintained, and the quality of decisions that spring from the boardroom!" The Tuvalu Philatelic Bureau commemorated the occasion of the new building with two new A $ 2 stamp issues, each one depicting Taiwan President Chen Shui-bian and Tuvalu Prime Minister Saufatu Sopoanga.

In mid-July 2004 , Tuvalu joined the International Whaling Commission ( IWC ) amid an international ­chorus accusing Tuvalu of supporting Japan in exchange for economic assistance. In spite of Tuvalu's insistence that it has not been the subject of influence, allegations continued to mount that Tuvalu's membership was an obstacle to the push toward banning commercial whaling. While Sopoanga's government was trying to fend off potential threats to Tuvalu's IWC membership, domestic politics turned sour when a vote of no confidence removed Sopoanga from office on 26 August 2004 . Two government members—Elisala Pita, also from Sopoanga's constituency, and Speaker of Parliament Otinielu Tausi—crossed the floor, making it possible for the motion to succeed. Tuvalu News reported that Tausi was dissatisfied with Sopoanga's financial policies and some cabinet ministers were unhappy with Sopoanga's disappearance on a visit to mainland China (Tuvalu recognizes Taiwan and not China). Sopoanga had previously expressed his disapproval of the Taiwan representative in Tuvalu associating himself publicly with leaders and members of the opposition and had accused the representative of meddling in Tuvalu politics.

In early May 2006 , New Zealand Conservation Minister Chris Carter visited Tuvalu to discuss whaling issues, prior to the IWC meeting that was to be held in June. On paper, it looked increasingly likely that the pro-whaling nations would achieve a majority on the commission for the first time. Anti-whaling nations wanted to turn that around, and the minister's visit was part of a campaign to influence countries in that direction. To overturn the 1986 ­moratorium on commercial whaling, a three-quarters majority is required. Similar visits to Solomon Islands, Kiri­bati, and Nauru were also planned. Tuvalu's response to the "flying lobby visit" was that its position [End Page 279] since it joined the international body would remain unchanged. Tuvalu has consistently said that it supports "the sustainable use of whatever resources" there are, including whales. Contrary to the statements of various international commentators, a spokesperson maintained that Tuvalu had not been bought by Japan. He pointed out that while Japan remains an important development partner, its overall level of development assistance for Tuvalu has not substantially increased. Nevertheless, the visit from New Zealand produced an agreement for a survey of whale and dolphin numbers in Tuvalu waters. The rationale for the project remains unclear.

Under normal circumstances, Parliament would have met several days after Sopoanga's removal to vote in a new prime minister. However, Sopoanga resigned his seat in a maneuver designed to garner support and buy the government more time. Under the Tuvalu Constitution, all fifteen seats should be filled before the Parliament can vote on such important matters. Sopoanga re-contested his seat and won the by-election. Unfortunately, though, he lost the prime ministership to his deputy, Maatia Toafa, who became the first prime minister from Nanumea Island and the first from the northern group. Some key observ­ers in Tuvalu suspected that a great deal of conspiracy within Sopoanga's own party, especially among the more senior ministers and others, transpired while Sopoanga was out campaigning for the by-election. The election for prime minister took place on 11 October 2004 .

During the period from July 2005 to June 2006 , two main issues dominated Tuvalu. The first relates to the threat of global warming to the low-lying atolls of Tuvalu. [Editor's note: See the feature review of five recent videos about these concerns, pages 294–306 , this issue.] The second concerns the plight of Tuvaluan workers abandoned on Nauru by the Nauru Phosphate Corporation.

Tuvalu took every opportunity to heighten global consciousness of the urgent threat of global warming to its low-lying island atolls at both international and regional forums, through the media, and by raising the general level of awareness of its people. In a speech on 16 September 2005 to the 66 th Session of the UN General Assembly, Prime Minister Maatia Toafa emphasized the slim margin of survival associated with fragile island environments: "Tuvalu's long-term security and sustainable development is closely linked to issues of climate change, preserving biodiversity, ­managing limited forests and water resources." Cyclones, aggravated by the effects of climate change, have a devastating effect on small economies and the lives of island communities. For Tuvalu, the effects are alarming. Toafa claims that the international community should give far greater attention to these kinds of environmental and security issues.

Extraordinarily high tides in February 2005 exacerbated by bad weather caused significant flooding in Funafuti, the capital of Tuvalu, much to the anxiety and trepidation of the inhabitants. Those affected were ­evacuated quickly to the government primary-school buildings, while their personal property, animals, and gardens were completely destroyed. [End Page 280] Travel through these areas proved difficult, as debris, stones, and boulders from the ocean side of the southern part of the island had been swept into the middle of the island by giant waves. Most alarming was the fact that seawater was rapidly oozing out of the countless potholes along the sides of the airport runway, prompting a CNN reporter to remark that Tuvalu was bleeding or eroding from within. These high tides and the damage that they caused were widely reported by various media sources in the Pacific.

In February 2006 , during a climate refuge forum (organized by Friends of the Earth as part of the Sustainable Living Festival), a Tuvaluan living in Melbourne commented that Tuvaluans should be moved to Kioa Island in Fiji. Kioa, a volcanic island much higher in altitude than Tuvalu, is populated by Tuvaluans who were moved there in the 1950 s. The argument that relocating Tuvaluan citizens to Kioa would ensure the survival of the Tuvaluan culture did not find favor with the Tuvalu government. It was seen as a retreat, a surrender of the government's basic premise that Tuvalu's demise is being caused by the lifestyle and behavior of the more industrialized countries, which must accept the obligation to find a suitable remedy. Relocation of the population was therefore not a priority, although at the same time the government was seriously looking at investing in the purchase of land overseas—Australia and New Zealand were mentioned.

Related to the issue of relocation was the current government's request to resettle more Tuvaluans in Niue. Some years ago several Tuvaluan families migrated to Niue under an informal scheme agreed to by then Tuvalu Prime Minister Kamuta Latasi and Niue Premier Frank Lui. These families have now established themselves in Niue and are without doubt contributing to the cultural, social, and economic life of Niue in many ways. For instance, a few Tuvaluans played for Niue's national teams for soccer and the Rugby Sevens, and their skills in fishing supplied the domestic demand in stores, restaurants, and hotels. However, the Niue government is still considering Tuvalu's request and is treading cautiously on the issue. Some in Niue feel that the Tuvaluans are only using Niue as a doorway to further migration to New Zealand.

The stranding of about 400 Tuvaluan and perhaps 1 , 300 I-Kiribati workers and their families on Nauru dominated the Tuvalu news agenda throughout the year. They had been recruited to work in the phosphate mines by the Nauru Phosphate Corporation, a company that is totally owned by the Government of Nauru. The company experienced severe financial problems and failed to either pay the workers' wages or repatriate them to their home islands. It is hard to imagine how these people have survived for so long; no doubt they have been depending on what little gardens they can grow around their houses, fishing, and help from their families abroad.

In August 2005 , Tuvalu's former governor-general, the Honorable Faimalaga Luka, passed away in Fiji. Since his appointment in 2002 , Governor-General Luka spent a good part of his time traveling to Fiji for medical [End Page 281] assistance, often with a relatively large entourage. Prior to his appointment, he served briefly as prime ­minister in 2001 . His tenure in that position ended abruptly when he was voted out as a result of a political con­spiracy from within his own caucus, contrived by his close associates.

A by-election in the electoral district of Nanumaga, caused by the ­resignation of one of its members of Parliament, the Honorable Namoto Kelisiano, saw former Cooperative Society Purchasing Officer Halo Tuavai voted in. Kelisiano was previously on the opposition benches, and Tua­vai's choice to side with the government ensured the latter of a thin majority in the House of Parliament. The reason given for Tuavai's alliance with the government was to lend support to his colleague from the same electorate, Speaker of Parliament Otinielu Tausi. The Honorable Kelisi­ano, a ship's engineer, resigned in order to run the island's power plant at the request of his home community.

Prior to this, two by-elections in the country had resulted in further enhancing and cementing Prime Minister Toafa's majority position. The Honorable Sio Patiale, a member of Parliament from Nanumea Island, resigned on medical grounds, and was replaced by a former Speaker of Parliament, the Honorable Kokea Malua, who returned as a government supporter. In May 2005 another by-election was held, following the sudden death of one of the members from Nui Island who had been leader of the opposition group. His replacement, the Honorable Taom Tanukale, joined the government ranks and was sub­sequently made the acting minister of health and education, while the incumbent went overseas for long-term medical treatment. In a 15 -seat Parliament, the government holds 10 seats, while the opposition has 5 seats.

The position of the current gov­ernment seems assured, providing the possibility of a renewed political landscape. Tuvalu has seen ten prime ministers in the twenty-eight years since independence—no doubt a record in the region. The problem with the parliamentary system is that the prime minister does not have anything to fall back on in the event of a no-confidence vote. He cannot call for general elections in order to secure the majority he needs to carry out his mandate, because the constitution does not provide for this. Neither does it provide for a limit to the number of votes of no confidence that can be made against an incumbent prime minister.

In an apparent case of tit-for-tat politics, the Honorable Otinielu Tausi, Speaker of Parliament, declared vacant one of the seats for the Funafuti electoral district, which was held by the Honorable Kamuta Latasi. The vacancy was declared due to Latasi's continual absence from sessions, as required under parliamentary rules of procedure. The Honorable Latasi, a former diplomat, veteran politician, and former prime minister, was under­going medical treatment in Fiji under the government's own scheme. Patients undergoing overseas medical treatment under the auspices of the scheme do so only with the approval of the minister of health. The government was therefore clearly aware of the reason for the member's absences.

It is believed that the Speaker acted [End Page 282] contrary to legal advice, and government members did not attempt to deal with his unusual actions within their own caucus. The chief justice upheld an application by the member and ruled that the dismissal was uncon­stitutional, noting that the whole matter would not have arisen if the former prime minister had followed the rules of procedure. Moreover, from a political perspective, the Speaker's decision to sack the member only served to strengthen the latter's position within his own electorate. The Funafuti community was determined to simply field him back should there be a by-election, and community pressure meant that the possibility of other candidates wanting to contest and win would be very slim.

In mid- 2005 Tuvalu hosted the annual Forum Economic Ministers Meeting on Funafuti Island. More than ninety overseas visitors filled up what limited accommodation was available on the island, including a guesthouse owned by Minister of Finance Hon Bikeni Paeniu. The cost for Tuvalu's hosting the meeting was conservatively estimated at A $ 10 , 000 , but it would be useful to know whether the actual cost outweighed the revenue generated.

When the market value of the Tuvalu Trust Fund ( TTF ) exceeds its calculated maintained value, the difference is a distribution to Tuvalu's treasure chest. As of 30 September 2005 , the difference came to some A $ 12 . 5 million, of which nearly A $ 1 million was made available to support the 2005 budget, and the balance of more than A $ 11 million was to be made available for the 2006 budget. The payment for the 2005 budget was the first in three years, and the distribution available for the 2006 budget represents the largest single-year payment from the fund (the largest payout previously was A $ 11 million for the 1988 budget). The fund is invested in diversified portfolios managed by international fund managers based in Australia.

The success of the Tuvalu Trust Fund led to the establishment of the Falekaupule Trust Funds ( FTF ) for each of the eight main islands in the country. These were designed to underwrite the costs and projects of island local governments, encourage decentralization, enhance capacity, and achieve a significant level of development finance for island communities. Since 2004 the Falekaupule Trust Funds adopted an investment structure almost identical to that of the Tuvalu Trust Fund. In September 2005 , it also announced a payment, the first in four years, of almost A $ 2 million. This FTF distribution will be made available to the island com­munities in 2006 to support island development and community projects. An unattributed report claims that the distribution formula was reached after immense political rumblings and internal fighting. The eight island communities would share 75 percent of the monies equally, and the remaining 25 percent would be distributed based on the size of the resident population of each island.

No distribution from the Tuvalu Trust Fund was paid out in the previous four years ( 2000–2004 ), and the last significant distribution was in 1988 . If budget planning assumes more payouts, there is a real possibility of Tuvalu's ending up with unmanageably [End Page 283] large budget deficits. For 2005 , the government had to draw considerably from its consolidated trust fund (Account B ) in order to bring the budget deficit down to an acceptable level. Incorrect revenue forecasts and excessive government expenditure were the main causes for the large 2005 deficit. An Asian Development Bank economic survey pointed out that the Tuvalu civil service is one of the largest by regional standards, and current indications are that it is still growing at an alarming rate.

Excessive expenditures on travel, especially by ministers, have often caused tensions in the civil service. The level of subsistence allowances for Tuvalu's traveling officials may be the most generous in the world, and the situation has received attention in several audit reports. The problem is exacerbated when ministers change their travel itineraries, usually while overseas, to suit their personal preferences, for example, to add stopovers in destinations like Auckland and Brisbane where relatives may reside.

Islands Business magazine ran a feature article in late August 2005 on a moneymaking scheme devised by some individuals from Lessing University in Berlin headed by a Dr Ronald Bauermeister. The scheme involved the establishment of a Bank of Commerce of Tuvalu, and a register of international companies. A further proposal was the opening of Tuvalu diplomatic missions in Europe, presumably to be staffed by members of this group. It was generally understood that Treasurer Bikeni Paeniu, asthe minister of finance, was firmly behind the proposal. However, senior officials who accompanied the minister to various talks declared that the details of the proposal were very unclear. Observers speculated that the outside financiers might be interested in the TTF investments, or in using Tuvalu to lend credibility for obtaining letters of credit or bank loans. Investors might also be trying to evade or avoid taxation in their home countries. Fortunately, pressure from other countries, particularly the development partners, may have persuaded Tuvalu policymakers to drop the idea.

In 2004 , the ANZ Bank was close to signing an agreement to take over the operations and management of the National Bank of Tuvalu ( NBT ). While this was a move I was strongly opposed to, the ANZ Bank did prom­ise a greater variety of banking services not previously available under the NBT management. However, the emergence of the Berlin tax scheme and the obvious ambiguities surrounding it forced the ANZ Bank to shelve its proposal. The Bank of South Pacific (Papua New Guinea), which had just acquired the Westpac Bank Branch in Niue, was reportedly also interested in expanding its operations to Tuvalu, but postponed the initiative because of the proposed scheme.

Taiwan President Chen Shui-bian's visit to a number of Pacific Island states in early 2006 , including a transit visit through Fiji and a day's visit to Tuvalu, caused some consternation in the region. Six countries in the Pacific—Tuvalu, Solomon Islands, and the republics of Nauru, Palau, Kiribati, and the Marshall Islands—recognize Taiwan, and the ongoing rivalry between China and Taiwan for [End Page 284] recognition by Pacific countries has concerned policy makers in both Canberra and Wellington for some time. On 10 December 2005 , PacNews reported a Taiwanese diplomat's accusations that New Zealand (and Australia) were treating the Pacific as if they owned it, adding that New Zea­land enjoys trade with Taiwan and should respect Taiwan's right to establish diplomatic links with other countries. A regional academic from the University of the South Pacific also commented that New Zealand was as guilty of ideological bribery as China and Taiwan. These comments came in response to former New Zealand Minister of Foreign Affairs Phil Goff's criticisms of the Taiwan president's tour, saying that checkbook diplomacy employed by both China and Taiwan undermines work to address serious issues such as poverty. While the majority of the countries of the world follow the One-China policy, Tuvalu, like other Pacific states, maintains its prerogative to establish links with any country it chooses.

President Chen Shui-bian was accorded a traditional welcome on his arrival at the Funafuti Inter­national Airport. As he and his entourage descended from the small plane, a group of primary school ­children serenaded the president with Taiwanese songs. They sang: "Taiwan's scenery is really beautiful. Taiwanese friends are really cute. Taiwanese A-bian [Chen's nickname] is really brave. Taiwan, Taiwan, go go go. A-bian, A-bian, go go go."

Taiwan is probably the second largest donor to Tuvalu after the European Union, and has come to Tuvalu's financial assistance in a number of ways. For example, Taiwan agreed to rescue the Tuvaluans and I-Kiribati stranded in Nauru; bailed the government out of severe budgetary deficits; paid for the newly built office complex in Funafuti; and paid for many government ministers' travels abroad. However, there is skepticism about the transparency, accountability, and propriety of Taiwan's assistance, and the repercussions for good economic governance and prudent financial management. Many believe that the more liberal the donor assistance is, the more opportunity there is for the recipient country to become corrupt in the use of aid donations. It is important that Taiwan (as well as China) appreciates the need for donor harmonization and coordination, transparency, and accountability, and that it provides funding assistance in line with the government's stated strategic objectives and priorities.

Public suspicions of misuse of funds loomed large after allegations surfaced in an Internet chat room popular with Tuvaluans that a former Telecom supervisor had misused company funds by investing them in real estate in Wainuioumata, Wellington, New Zealand. Investigations are now being carried out by the Tuvalu Trust Fund Advisory Committee, as well as by the police.

Meanwhile, disgruntled members of the Tuvalu Chamber of Commerce and their supporters marched to Parliament House in Funafuti on 7 April 2006 , the final day of the session. They were angry that Minister of Finance Bikeni Paeniu was withholding an aid package of US$400 , 000 designated for the private sector. The [End Page 285] marchers wanted Parliament to direct the minister to have those funds paid directly to small businesses through the Development Bank. The marchers held placards and signs saying to the minister, "Give us our money, $ 400 , 000 . Do not speak about God for you are a liar" (my translation). As a result of this protest, the minister reluctantly released A $ 100 , 000 to the Development Bank to provide businesspeople with loans. It was a gesture intended to ensure silence. The Chamber of Commerce members were far from happy, as they saw no reason why the minister should withhold any portion of the funds.

For some, the future of Tuvalu looks bleak. Many hearken back to the days when Tuvalu was able to secure its independence, repeal its first constitution drafted by the colonial office in London, produce a new constitution more relevant to its needs and changing conditions, and establish a trust fund that became a model for other small nations.

THIS REVIEW covers a two-year period from mid- 2004 to mid- 2006 . It benefited enormously from the comments of an external reviewer who remains anonymous. However, the views expressed here are my own and any errors or omissions are entirely my responsibility.


Tauaasa Taafaki's career has included serving as secretary in the Tuvalu prime minister's department, and working in community development in the greater Wellington (New Zealand) region as well as in the field of international development with the New Zealand Agency for International Development. His research interests include good governance and politics in fragile Pacific Island states. He has a master's degree from the Political Science and International Relations Program at the Australian National University.


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