Kiribati

Key trends and development challenges

Kiribati is an atoll state located in the Pacific sub-region of Micronesia. With a GDP of $289 million, Kiribati is one of the smaller economies in the Pacific, accounting for 0.7% of regional GDP. Kiribati has a population of 133,000, resulting in a GDP per capita of $2,200 — the third-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.

Kiribati has the sixth-largest official development assistance (ODA) to gross domestic product (GDP) ratio in the Pacific Islands region, with aid accounting for 45% of GDP. In a global context, Kiribati remains among the most aid-reliant countries in the world, with its aid as a share of GDP ranking eighth among 125 developing countries.

Kiribati’s population is highly dispersed over the country’s 32 remote atolls. 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 around 70% of fiscal revenue between 2018 and 2023. At 0.644, Kiribati’s Human Development Index score ranks 140th out of 193 ranked countries.

Between 2008 and 2023, annual official development finance (ODF) disbursements to Kiribati — including grants, loans, and other forms of assistance — averaged $91 million. In 2023, the Pacific Islands state received $129 million in development assistance — more than three times the level of disbursements seen in 2008. Only 2.2% of the development finance received by Kiribati between 2008 and 2023 came in the form of loans.

Development partners and sector trends

The vast majority (83%) of ODF support to Kiribati in 2023 came from five development partners, led by Australia (22%), China (21%), Japan (17%), the World Bank (14%), and New Zealand (9%). Since switching recognition from Taiwan to China in 2019, Chinese ODF has played a significant 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.

The largest active investment in Kiribati in 2023 was Japan’s contribution to the East Micronesia Cable project, a multi-donor project that aims to improve internet connectivity through a new submarine cable, worth $17 million. Kiribati also received substantial infrastructure support from China, particularly for roads projects. Australian support flowed primarily to the health and education sectors. Viewed in full, ODF disbursements to Kiribati are distinct from regional trends in terms of sector distribution. Projects focused on transport made up 23% of incoming flows, well above the regional average of 13%. Infrastructure has been a major and increasing focus of ODF flows to Kiribati, with the sector seeing considerable external support over the past decade. While the pandemic briefly interrupted this trend in 2020, infrastructure spending bounced back in 2022–23.

Over the past 16 years, Kiribati has received $94 million in development financing with a “principal” focus on either climate adaptation or mitigation. In the same period, the country has seen $277 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 made up 6% of total spending, slightly below the Pacific regional average of 8%. Conversely, spending on “significant” climate projects in Kiribati made up 19% of incoming funds, above the regional average of 11%. 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 2023, Kiribati received $72 million in development financing with a “principal” focus on gender equality, and $293 million in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 5% of ODF received by the country, above the regional average of 2%. Conversely, “significant” marked gender financing made up 20% of incoming ODF, slightly below the regional average.