Funafuti is the largest atoll, and comprises numerous islets around a central lagoon that is approximately 25.1 kilometres (15.6 miles) (N–S) by 18.4 kilometres (11.4 miles) (W-E), centred on 179°7’E and 8°30’S. On the atolls, an annular reef rim surrounds the lagoon with seven natural reef channels.
Tuvalu’s exclusive economic zone (EEZ) covers an oceanic area of approximately 900,000 km2.
From 1996 to 2002, Tuvalu was one of the best-performing Pacific Island economies and achieved an average real gross domestic product (GDP) growth rate of 5.6% per annum. Economic growth slowed after 2002, with GDP growth of 1.5% in 2008. Tuvalu was exposed to rapid rises in world prices of fuel and food in 2008, with the level of inflation peaking at 13.4%.
Tuvalu joined the International Monetary Fund (IMF) on 24 June 2010. The IMP 2010 Report on Tuvalu estimates that Tuvalu experienced zero growth in its 2010 GDP, after the economy contracted by about 2% in 2009. On 5 August 2012, the Executive Board of the IMF concluded the Article IV consultation with Tuvalu, and assessed the economy of Tuvalu: “A slow recovery is underway in Tuvalu, but there are important risks. GDP grew in 2011 for the first time since the global financial crisis, led by the private retail sector and education spending. We expect growth to rise slowly”. The IMF 2014 Country Report noted that real GDP growth in Tuvalu had been volatile averaging only 1 per cent in the past decade. The 2014 Country Report describes economic growth prospects as generally positive as the result of large revenues from fishing licenses, together with substantial foreign aid. While a budget deficit of A$0.4 million was projected for 2015, the Asian Development Bank (ADB) assessed the budget as being A$14.3m in surplus as the result of high tuna fish license fees. The ADB predicted that the 2% growth rate for 2015 would continue into 2016. Nonetheless, Tuvalu has the smallest GDP of any sovereign nation in the world.
The government is the primary provider of medical services through Princess Margaret Hospital on Funafuti, which operates health clinics on the other islands. Banking services are provided by the National Bank of Tuvalu. Public sector workers make up about 65% of those formally employed. Remittances from Tuvaluans living in Australia and New Zealand, and remittances from Tuvaluan sailors employed on overseas ships are important sources of income for Tuvaluans. Approximately 15% of adult males work as seamen on foreign-flagged merchant ships. Agriculture in Tuvalu is focused on coconut trees and growing pulaka in large pits of composted soil below the water table. Tuvaluans are otherwise involved in traditional subsistence agriculture and fishing.
Tuvaluans are well known for their seafaring skills, with the Tuvalu Maritime Training Institute on Amatuku motu (island), Funafuti, providing training to approximately 120 marine cadets each year so that they have the skills necessary for employment as seafarers on merchant shipping. The Tuvalu Overseas Seamen’s Union (TOSU) is the only registered trade union in Tuvalu. It represents workers on foreign ships. The Asian Development Bank (ADB) estimates that 800 Tuvaluan men are trained, certified and active as seafarers. The ADB estimates that, at any one time, about 15% of the adult male population works abroad as seafarers. Job opportunities also exist as observers on tuna boats where the role is to monitor compliance with the boat’s tuna fishing license.