Kiribati

Key trends and development challenges

Kiribati is an atoll state located in the Pacific sub-region of Micronesia. With a GDP of $179 million in 2022, Kiribati is one of the smaller economies in the Pacific, accounting for 0.5% of regional GDP. With a population of 131,000 (2022), Kiribati’s GDP per capita is $1,700 — the lowest in the Pacific. Despite its small economy, the country’s Exclusive Economic Zone (EEZ) covers 3.44 million square kilometres, the 12th-largest globally, and is comparable in size to the EEZ of Mexico.

Kiribati has the sixth-highest Official Development Assistance (ODA) to Gross National Income (GNI) ratio in the Pacific Islands region, with aid accounting for 18% of national income. In a global context, Kiribati is among the most aid-reliant countries in the world, ranking eighth among 127 developing countries for its ODA/GNI ratio. Kiribati’s population is highly dispersed over the country’s 32 remote atolls and single raised coral island. Common to many Pacific Island states, the country’s distant and dispersed population significantly increases the per capita cost of service delivery.

The Kiribati government is highly dependent on fisheries income, with tuna licensing and access fees accounting for 70% of fiscal revenue between 2015 and 2020. The Kiribati government’s development agenda highlights improvements to education and health outcomes for its citizens, as well as the climate-proofing of public infrastructure. At 0.628, Kiribati’s Human Development Index score ranks 137th out of 193 ranked countries.

Between 2008 and 2022, annual Official Development Finance (ODF) disbursements to Kiribati — including grants, loans, and other forms of assistance — averaged $85 million. Even when adjusting for inflation, Kiribati has seen a substantial rise in total development flows over the past 15 years. In 2022, the Pacific Islands state received $117 million in development assistance, close to three times the level of disbursements seen in 2008. Only 2% of the development finance received by Kiribati between 2008 and 2022 came in the form of loans.

Development partners and sector trends

The vast majority (77%) of ODF support to Kiribati has come from five development partners, led by Australia (32%), New Zealand (16%), Japan (12%), Taiwan (10%), and the World Bank (8%). Australia’s largest ODF programs in the country have focused on the education and health sectors.

However, after switching recognition from Taiwan to China in 2019, Chinese ODF has played an increasing role in financing development in Kiribati. China has become the country’s second-largest aid partner, financing commercial aircraft for the national carrier, agricultural projects, and budget support programs.

ODF disbursements to Kiribati are distinct from regional trends in terms of sector distribution. Projects focused on government and civil society only make up 20% of incoming flows, compared to the regional average of 36%. Conversely, spending on water and sanitation, transport, and education are all significantly higher than regional averages. Since 2011, Kiribati has seen significantly more spending on infrastructure than human development. While the pandemic briefly inverted this trend in 2020, infrastructure spending has bounced back in 2021–22 largely due to a spike in Chinese investment.

Over the past 15 years, Kiribati has received $71 million in development financing with a “principal” focus on either climate adaptation or mitigation. Over this same period, the country has seen $236 million in development financing with a “significant” focus on climate outcomes. Since the late-2010s, Kiribati has seen steady growth in climate-targeting projects, a trend mirrored across most of the Pacific. As a share of total ODF received by Kiribati, “principal” climate projects make up 5% of total spending, below the regional average of 9%. Conversely, spending on “significant” climate projects in Kiribati makes up 21% of incoming funds, above the regional average of 13%. To date, the largest ODF climate investment in Kiribati has been the Kiribati Adaptation Project, financed by the Australian government and the World Bank.

Between 2008 and 2022, Kiribati received $77 million in development financing with a “principal” focus on gender equality, and $267 million in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 6% of ODF received by the country, triple the regional average of 2%. Conversely, “significant” marked gender financing made up 22% of incoming ODF, slightly above the regional average. The largest project tagged as directly targeting gender equality in Kiribati was the multi-year $16 million Kiribati Australia Nursing Initiative, funded by Australia.