Tuvalu

Key trends and development challenges

Tuvalu is one of the world’s smallest independent nations, comprising nine low-lying coral atolls. With a GDP of $60 million, Tuvalu is the second-smallest economy in the Pacific Islands and accounts for 0.1% of regional GDP. Tuvalu has a population of 9,900, resulting in a GDP per capita of $5,800, ranking seventh in the Pacific. Despite its small size, Tuvalu’s exclusive economic zone (EEZ) covers 749,800 square kilometres, the 38th-largest globally, comparable to the EEZ of China.

Tuvalu has the highest official development assistance (ODA) to gross domestic product (GDP) ratio in the Pacific Islands region, with aid accounting for 146% of national economic output. In a global context, Tuvalu is the most aid-reliant country in the world, with its aid as a share of GDP ranking first among 125 developing countries.

The Tuvalu government’s development agenda highlights five strategic areas: sustainable development, economic development, social development and inclusion, islands and culture, and infrastructure development. At 0.689, Tuvalu’s Human Development Index score ranks 129th out of 193 ranked countries.

Development partners and sector trends

Between 2008 and 2023, annual official development finance (ODF) disbursements to Tuvalu — including grants, loans, and other forms of assistance — averaged $50 million. Since 2011, Tuvalu has seen exclusively grant-based development financing. Tuvalu is the second-highest per capita aid recipient in the Pacific, in part a product of its small population size.

The vast majority (83%) of ODF support to Tuvalu in 2023 came from five development partners, led by Australia (26%), the Green Climate Fund (23%), the World Bank (13%), New Zealand (11%), and Taiwan (10%).

ODF disbursements in Tuvalu were largely consistent with regional trends in terms of sector distribution. The government and civil society sector featured prominently, accounting for close to 40% of incoming financing. Tuvalu also sees slightly higher-than-average spending in transportation, energy, and humanitarian aid. From 2014 onwards, Tuvalu has seen a greater emphasis on infrastructure spending, particularly climate adaptation projects.

Since 2008, Tuvalu has received $152 million in development financing with a “principal” focus on either climate adaptation or mitigation. Over this same period, the country has seen $144 million in development financing with a “significant” focus on climate outcomes. From 2018, Tuvalu saw a substantial rise in spending on climate-targeting projects in recognition of its extreme vulnerability to climate change. As a share of total ODF received by Tuvalu, “principal” climate projects made up 19% of total spending, well above the regional average of 8%. Similarly, spending on “significant” climate projects in Tuvalu made up 18% of incoming funds, above the regional average of 11%.

Between 2008 and 2023, Tuvalu received $7 million in development financing with a “principal” focus on gender equality, and $89 million in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 1% of ODF received by the country, slightly below the regional average of 2%. Similarly, “significant” marked gender financing made up 11% of incoming ODF, well below the regional average of 22%. The largest project directly targeting gender equality in Tuvalu was the $1 million Pacific Women Shaping Pacific Development project, funded by Australia.