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Republic of Kiribati 

    NATIONAL DEVELOPMENT STRATEGIES 2004-2007 

ENHANCING GROWTH AND ENSURING EQUITABLE DISTRIBUTION 

November 2003

Table of Contents 

               Abbreviations                                                                                                                                      

               List of useful words                                                                                                                             

               Map of Kiribati                                                                                                                                    

Section 

1. Arrangement of NDS 2004-7                                         

2. The making of NDS 2004-7                                           

3. Social and economic developments 2000-2003             

4. Development strategies 2004-2007                    

5. Implementation, monitoring and review                        

Appendix 

Planning and Performance Monitoring Formats 

A1    Ministry Operational Plan                               

A2    Public Enterprise Business Plan                                   

A3    Project design for new project or programme                                                                           

A4    Quarterly report by MFED                                                                           

Abbreviations 

               ADB                       Asian Development Bank 

               AIDS                      Acquired Immune Deficiency Syndrome 

               ANZ                       Australia and New Zealand 

               AusAID                  Australian Agency for International Development 

               BoK                        Bank of Kiribati 

               DBK                       Development Bank of Kiribati 

               DRCS                     Digital Radio Concentrator Systems 

               EEZ                        Exclusive Economic Zone 

               EU                          European Union 

               FMIS                      Financial Management Information System 

               GDP                       Gross Domestic Product

               GNP                        Gross National Product 

               GoK                        Government of Kiribati 

               HIV                         Human Immune Deficiency Virus

               IMF                         International Monetary Fund 

               ITU                         International Telecommunications Union 

               IYB                         Improve Your Own Business

               JSS                        Junior Secondary Schools 

               KHC                       Kiribati Housing Commission 

               KNAO                     Kiribati National Audit Office

               KPA                       Key Policy Area 

               KPFP                      Kiribati Police Force & Prisons  

               MCIC                     Ministry of Commerce Industry and Cooperatives 

               MCTTD                  Ministry of Communication Transport and Tourism Development 

               MELAD                 Ministry of Environment, Lands and Agriculture Development 

               MEYS                     Ministry of Education Youth and Sports 

               MFAI                      Ministry of Foreign Affairs and Immigration 

               MFED                     Ministry of Finance and Economic Development (MEFD 

               MFMRD                 Ministry of Fisheries and Marine Resources Development 

               MHMS                   Ministry of Health and Medical Services 

               MISA                      Ministry of Internal and Social Affairs 

               MLHRD                 Ministry of Labour and Human Resources Development 

               MLPID                   Ministry of Line and Phoenix Islands Development 

               MOP                       Ministry Operational Plan 

               MPWU                    Ministry of Public Works and Utilities

               NDS                      National Development Strategy

               NGO                      Non Government Organisation 

               OAG                       Office of the Attorney General 

               OB                          Office of the Beretitenti and Maneaba ni Maungatabu 

               OI                           Outer Island 

               PAC                        Public Accounts Committee

               PE                           Public Enterprise 

               PFTAC                   Pacific Financial Technical Assistance Centre  

               PHC                        Primary Health Care 

               PSCC                      Private Sector Consultative Committee 

               PSO                        Public Service Office 

               PSO                        Public Service Office 

               PUB                        Public Utilities Board 

               RERF                      Revenue Equalisation Reserve Fund 

              SAPHE                     Sanitation, Public Health and Environment

              SED                        Small Enterprise Development 

              SOPAC                    South Pacific Applied Geoscience Commission 

              SYB                        Start Your Own Business

              TA                          Technical Assistance 

               TSKL                      Telecom Services Kiribati Limited 

               UN                         United Nations

               US                         United States

               USP                       University of the South Pacific  

               VB                          Village Bank 

List of useful words in plans and budgets 

The meaning of words can change according to the place where they are used. The following list shows the meanings of twenty-two words and phrases as they are used in NDS 2004-7 and the Government Budget. 

Map of Kiribati 

To be provided 

 FOREWORD 

On behalf of the people of Kiribati and the Kiribati Government I am greatly honoured to present the third statement of National Development Strategies (NDS) covering the years 2004-2007. 

NDS is a strategic plan for sustained growth in the income and welfare of the people of Kiribati. It sets in a planning framework the aim that the Government expressed in its policy statement on taking office‘Karakaan ao Tibwatibwaan Raoi te Kabwaia Nakon Te I-Kiribati nte waaki ae e anaki n te Eti ao te Riai’—‘Enhancing and ensuring the equitable distribution of development benefits to the people of Kiribati according to principles of good governance’.  

Achievement of this aim would come from the combined effect of a wide range of efforts by all sectors of our society and economy. It would come from 

• partnership of public and private investment in infrastructure and production, 
• equitable distribution of services and economic opportunity,  
• improved efficiency in the public sector,  
• equipping our people to manage social and economic change as individuals, communities and as a nation,  
• using our natural resources and physical assets sustainably, and 
• preserving our financial reserves while making use of them to finance development.  

NDS provides the strategic planning framework and overall direction. Within that framework, detailed operational plans are then to be drawn up by Ministries and public enterprises. These plans will show how the resources allocated by Parliament in the Annual Budget will be used to pursue the development strategies.  

A Multi-Year Budget Framework is being developed to tie the NDS and the annual budget together, to show that our development strategies and financial policies are mutually consistent and achievable. That framework and the operational plans will be the heart of the performance monitoring system of the NDS, to assist Ministries and public enterprises in implementation, and enable us to account to Parliament. 

I thank all those who have helped to formulate the National Development Strategies. My special thanks go to members of the Sector Coordinating Committee, staff of line Ministries and the National Economic Development Office, and to everyone who has contributed ideas during the many consultations leading to production of NDS 2004-7. Now we must work well together to implement our plans. 

      Te Mauri, Te Raoi ao Te Tabomoa                                                                                                    .            

       Honourable Nabuti Mwemwenikarawa                                                                                              

 Minister of Finance and Economic Development

                                                                                                                                               8

Section 1: Arrangement of NDS 2004-7 

The Government’s Policy Statement on taking office set the overall aim of development as an increase in kabwaia—prosperity, well-being—tibwatibwaan raoi—equitably distributed— among the people of Kiribati according to principles of good governance. The Statement recognises that efforts to achieve sustainable development can be undermined by lawlessness, and the Government has emphasised the need for a peaceful and law-abiding environment for growth. 

NDS 2004-7 reinforces that political direction with the results of community consultations and technical analysis in the form of a strategic plan, showing how the Government intends to pursue its overall development aim in the next four years. ^[1]

Following this introduction, Section 2 describes the consultative process used by the Government to obtain a wide range of views during the preparation of this NDS. At Section 3 

is an account of social and economic developments in Kiribati during 2000-3, including achievements of the Government during that period.  

Section 4 groups the concerns of Government into clusters of related issues, in which the results of activities are expected to have important strategic consequences. These are called Key Policy Areas (KPAs). There are six in NDS. They are economic growth, fair distribution, public sector performance, equipping people to manage change, conservation of physical assets, and sustainable use of financial reserves. All the issues facing the Government, and the strategies it intends to use to deal with them, fit into one or other of these clusters or KPAs.  

Section 5 describes the arrangements for implementing and monitoring performance of NDS 2004-7. The detailed planning of activities to achieve the Government’s aims will be done in Ministries and Public Enterprises and expressed in Operational Plans and Business Plans. These plans will also be published. Their performance will be monitored and reported to Parliament and the public.  

Operational planning is closely connected to financial planning. Ministry Operational Plans will be linked to the annual Government Budget, and will come out early in the first quarter of each year. The Government Budget is being set in a multi-year framework to demonstrate its sustainability and to assist forward planning in Ministries. This will be a vital check that development planning through the NDS and financial planning through the Budget are marching in step, and that the principal assumptions on which they are based are realistic. A summary of the multi-year budget framework will be published periodically as part of the NDS monitoring and reporting process.  

The Appendix to this Statement provides formats for the main plans and reports that make up the NDS implementation monitoring and reporting system. Overall progress reports generated by this system will be published in the news media in Kiribati and on the Internet.  

Section 2. The making of NDS 2004-7  

A key objective in the development process of the NDS has been to mobilize the active participation of all key stakeholders relevant to the successful implementation of the objectives of the NDS. The aim of this is to foster a sense of ownership amongst stakeholders to ensure their cooperation and commitment to the implementation of the various stages of the NDS.  

The principal guideline for the direction and scope of the NDS 2004-7 is the Government Policy Statement delivered to Parliament on 3 September 2003. Setting those policies in a strategic planning framework directs attention to availability of resources, the external environment and the interconnectedness of policies and strategies across the economy and over time. Relevant studies and reports sponsored by the Government itself, ADB, World Bank, IMF, UN and other development partners were consulted. The resulting strategic plan is consistent with the commitment of Kiribati to the UN-adopted Millennium Development Goals. 

The importance of community participation in the development process of the NDS has been underestimated in the past. This has contributed to a lack of stakeholder identification with the objectives of earlier NDS. Commitment towards full implementation has thus been generally weak, with many key strategies laid out in those NDS statements not being adequately pursued 

Conscious of these shortfalls, the National Economic Planning Office set itself the task of developing a more stakeholder-friendly approach in the formulation of NDS 2004-7. The approach this time aimed to ensure the participation of the different sectors of the entire community of Kiribati by directly involving the outer islands, including Banaba and the Line and Phoenix Islands. Consultative workshops were conducted on Kiritimati, Butaritari, Kuria and Nikunau. A national workshop was conducted on South Tarawa attended by more than 400 participants, including five representatives from each of all the outer islands. These included representatives from the Island Councils, old men associations, women’s groups, church groups and youth organisations. Representatives from ministries of Government, the private sector and non-government organizations also attended. The content of the discussions during the island and national workshops has been of tremendous value in the assessment of current conditions and the formulation of NDS 2004-7.    

A review was made of progress with NDS 2000-3 to assess how far strategic sectors have progressed in achieving goals set for that period. Government ministries, public enterprises and the private sector were involved. The outcome of these discussions was integrated with data from the Statistics Department and recent socio-economic reports to provide the assessment appearing in Section 3 of this NDS statement. 

Compilation of the outputs from consultative workshops, discussions and review meetings so as to organise them into a strategic plan has been a challenging and rewarding task. It has been greatly helped by periodic meetings of the NDS Sector Committee, comprising officials responsible for planning in Government ministries. The value of comprehensive consultation has been proved in this process, and is reflected in the design of the implementation and performance-monitoring arrangements set out at Section 5 of this statement of NDS.

Section 3: Social and economic developments 2000-3 

Overview 

The Kiribati economy performed less well in 2000-3 than had been hoped. This was in part due to external factors that also affected other Pacific island economies—falling financial markets and economic uncertainties associated with international terrorism and the war in Iraq—and in part due to lack of new private investment in production of traded goods and services in Kiribati. Important progress was made in improving infrastructure and social services, but domestic economic activity depended largely on government expenditures, much of it financed by foreign aid. 

Human context of development 

At the end of 2003 the people of Kiribati number about 90,000. Speaking one national language and sharing a common cultural heritage, the I-Kiribati inhabit a country of 33 atolls and reef islands stretching 5000km across the central-western Pacific. The total land area of 726 sq.km falls into three island groups, lying within three exclusive economic zones (EEZs), together covering 3.5million sq.km.  

Kiribati is changing rapidly. Money incomes have risen through improved communications, monetised trade and financial transactions with a globalising world economy. The same factors have weakened traditional systems of redistribution and mutual support, while facilitating population growth and urbanisation, with serious consequences for the physical and social environment and for the well-being of poorer people. Appropriate skills, understanding, structures and codes of conduct are required in all areas of public and private life to enable the Kiribati economy to meet its people’s needs for a sustainable livelihood. 

The relationship between a growing population and a fixed amount of domestic resources dominates concerns about development in Kiribati. During 2000-2003 the total population is estimated to have increased by 6,000 persons, two-thirds of that increase taking place in South Tarawa, where almost half the total population lives, and the remainder in Kiritimati, the biggest atoll and the fastest growing population centre.^[2] Urban settlements grow for compelling social and economic reasons, but they also cause many strains at community, household and personal levels. 

The 2000 Census counted 9,200 persons working in the cash economy. Two out of every three employed persons worked in the public sector, and two out of every three of these were in South Tarawa. Almost 2000 young persons leave school each year, and about 500 jobs become available. The Census found that 41% of the total population was less than 20 years old. This demographic structure ensures increasing pressure for both school places and jobs, and internal migration means that most of that pressure will be in South Tarawa and Kiritimati. 

Calculations by SPC demographers based on the 2000 Census and using UN estimates of fertility and life expectancy suggest that by 2025 the total population of Kiribati would reach 140-145,000. There might then be around 70,000 persons in Tarawa (double the 2000 figure), 20,000 in Kiritimati and 50-55,000 spread among the rest of the Gilbert, Line and Phoenix groups.  

Apart from the difficulty of developing the monetary economy to support such an increase in numbers, population growth at that level would place huge strains on the physical carrying capacity of the atoll environment. The economic impact of continued population growth in Kiribati is to divide the available land resources and national income obtainable from overseas among an increasing number of people. There is wide public awareness of this, as consultations for this NDS showed, and considerable unease about its implications, but there is presently no coherent strategy in place to identify and address population-related issues at national or community level. 

Nature of the monetary economy 

Changes in the national income of Kiribati are determined more by earnings from abroad than by domestic production of goods and services. Investment earnings of the government’s reserve fund and other external reserves, EEZ access fees and other resource rents, sales of passports to foreigners and remittances of Kiribati seamen and fishers on overseas ships, crucially underpin current levels of public and private disposable income, which in turn yield domestic tax revenues. GNP, which includes that foreign income, is therefore a more useful indicator of the current condition and capability of the Kiribati economy than GDP, which covers only incomes from domestic production. Moreover, estimates of GDP are strongly affected by movements in the public sector payroll, which is a weak indicator of changes in real economic activity. 

Alongside foreign earnings, development aid from foreign governments and international financial institutions plays a key role in the social and economic development of Kiribati. In the three years 2000-2 official grants and loans from abroad amounted to $105m, providing about 30% of the annual budget expenditures of the Government, equivalent to more than one-third of GDP. The importance of foreign earnings and official aid in determining the development capacity of the economy highlights the need for purposeful management of Kiribati’s external relations. The cost-effective use of economic diplomacy to sustain these flows from abroad has been an important arm of Kiribati’s development strategies. At the same time Kiribati has been active in the Pacific region and internationally in advocating special and differential treatment for small and vulnerable economies. 

GNP in 2002 in current prices is estimated to have been about $175m, and GDP about $98m, the difference of $77m being income from abroad. GNP per head in 2002 was about $1987 (US$1092) The fall currently taking place in EEZ access fees due to the effect of the oceanic weather cycle on fish catches, is expected to reduce GNP and government revenue significantly in 2003 and 2004. Despite this volatility the Kiribati economy retains great resilience, thanks to the government savings in the RERF. This had a market value of about $576m at the end of 2002. Public external debt was then about $11m or about 6% of estimated GNP, and was on highly concessionary terms. End-2002 official external reserves, almost all in the RERF, were 3.3 times GNP and eight times annual imports of goods and services. There is almost no domestic public debt. 

The monetary economy is dominated by the public sector, which provides two out of every three formal jobs and four out of every five dollars of pay. Most government outlays, equivalent to more than 100% of GDP, are quickly re-spent by their recipients on imported consumption goods. Marine products (sea-weed, aquarium fish) in some islands and copra in most rural areas are the main export products, but contribute only 10-20% of GDP. Valueadding domestic economic activity comprises primary processing of copra and seaweed, small-scale clothing and food production, construction, mechanical and small vessel repair. Large government projects (seaport, schools, parliament, water and sewerage) have boosted construction activity. Tourist-related activities and live-fish exports are important in the Line Islands, but other economic activity is heavily concentrated in South Tarawa.  

During most of the 1990s the effect of buoyant global economic conditions, the use of the Australian dollar as domestic currency, ready access to external assistance and generally prudent fiscal policies enabled Kiribati to achieve macro-economic stability and growth. Over the decade the Kiribati economy expanded, driven by a doubling of public expenditure, with national income growing at 4-5% annually in real terms. This was made possible by rapid growth in sovereignty-based revenues (particularly from EEZ access fees), accompanied by extraordinary increases in the value of the overseas financial reserves in the RERF and a boom in passport sales to foreigners. In the last two years concern has been growing about the sustainability of such expansionary fiscal policy, in view of reverses in the financial markets in which the RERF is invested, the inherent volatility of fisheries licence revenues, uncertainty about the sustainability of passport sales, and continued pressure for financial support of public enterprises and other current budget expenditures in Kiribati. 

Developments during the period of NDS 2000-3 ^[3] Macroeconomic performance 

Real (inflation-adjusted) GDP is estimated to have grown by 1.4% annually in 2000-2, just below the estimated population growth rate of 1.7%, and well below the growth rates of 8% estimated for 1997-9. Lower production of copra, fish and manufacturing output was responsible, partly offset by increases in public service payroll which enter the GDP calculation as increases in government product. Exports of copra, fish and seaweed fell each year from $14m in 1999 to $7m in 2002. Inflation tends to track that in Australia, and was around 1% in 2000 and 2002. In 2001 a fall in the exchange rate of the Australian dollar led to higher prices of non-Australian imports, and the annual inflation rate for that year reached 7%. The subsequent strengthening of the A$, which has continued through 2003, has helped to keep down prices, but it has also reduced the domestic currency value of Kiribati’s substantial income from abroad.  

Increased government revenues in 2000-2, with fishing licence fees reaching $47m in 2001, were fully spent on increases in personnel costs, a new parliament house and substantial expenditures in support of public enterprises. These included construction of a copra mill, acquisition of an aircraft for Air Kiribati’s venture into regional services, and the rehabilitation of the collapsed fish exporting enterprise. Total budget outlays exceeded income and a draw-down of $12.6m was made from the RERF. 

Expansionary fiscal policy continued into 2002. A job evaluation study resulted in increases in staffing and pay levels, and other awards in advance of the general election added to costs. As the year progressed awareness of the market-driven decline in the value of the RERF and growing official concern at the prospect of a structural budget deficit caused a slowdown in government expenditure. Political events delayed the passage of the 2003 budget until September 2003, providing an opportunity for fiscal consolidation in the absence of new expenditure authority. 

Public sector reform  

Work on strengthening the government’s output budgeting and financial management information system continued under an Australian aid project. This is a long-term programme of technical assistance and training, and much remains to be done before the system is fully and reliably integrated with other management information.  

Procurement procedures in the public sector were updated and strengthened in 2002 by enactment of the Procurement Act. This requires transparent and competitive tendering for supply of goods and services to the Government and to public enterprises. MFED will be responsible for administration of the legislation. 

Preparations began for a substantial increase in funding and administrative capacity for improving social and economic infrastructure in outer islands, in collaboration with ADB. A comprehensive programme of institutional strengthening of island governments, linked to the proposed establishment of a $21m Outer Islands Trust Fund, began in 2002 and will continue through the new NDS period.   

Other areas of public sector reform made little or no progress. Expectations of improvements in government operational planning and performance monitoring have been rolled forward to NDS 2004-7. Reluctance to put jobs at risk lies behind much of the unwillingness to make structural reforms, including privatisation (a change from government to private ownership). An ADB-funded study of the Kiribati economy in 2002 recommended aiming at increases in efficiency of resource use in the public sector by a range of techniques that do not target reductions in the workforce. 

Economic reforms 

Changes in the investment approval and support system have been discussed and designed but not yet implemented. Developments in the financial sector included the acquisition by ANZ Bank of a 75% shareholding in the Bank of Kiribati, replacing Westpac as the Government’s joint venture partner. Steps have been taken to ensure that Kiribati complies with international anti-money-laundering standards. A law to provide for supervision of financial institutions has been prepared, with advice from PFTAC, as part of a strategy to strengthen the developmental role of the domestic financial sector while maintaining prudent standards of institutional governance. 

Natural resources development 

Fees for access to the EEZ by USA and Asian tuna fishing vessels reached record levels under favourable climatic conditions, and negotiations were successfully concluded for access by European vessels. A range of marine products is under investigation to see if domestic commercial production is feasible, but high costs related to small scale and remote locations present severe economic problems. The domestic tuna catch is believed to be capable of doubling production without overfishing, potentially making export of tuna products commercially feasible. 

Other marine resources with proven production possibilities are beche-de-mer, milkfish, lobster, octopus and seaweed. Regeneration of heavily-fished beche-de-mer stocks in atoll lagoons with juveniles from the government hatchery has been successfully implemented, so far at no charge to the fishers. Seaweed production declined during 2000-3, apparently because of over-cultivation in some locations, and unattractive prices in others compared with tourist activities, shop-keeping and public sector employment. 

Pearl oysters are being grown successfully on a pilot scale at Abaiang. Lessons are being learned in growing the shell and culturing black pearls. The first field harvest in August 2003 produced outstanding results, and 5000 shells have been seeded for harvest in 2005. Subject to successful out-turn, the technical basis for commercial production may then exist.  

The government fish and poultry farm at Temaiku improved its production and product range but is still being supported from public funds. The potential for milkfish production at Temaiku to supply bait to local longline boats is again under consideration.  

In 2001 the Government set up the fisheries enterprise Central Pacific Producers (CPP) to take over the assets and functions of Te Mautari Limited, which had collapsed in 1994. CPP provides commercial services to tuna catchers and carriers transhipping fish at Tarawa. Charged with commercial and developmental roles in connection with tuna and other ocean fisheries, CPP is investigating the feasibility of local long-line fishing for the sashimi and tuna loin markets. The enterprise is burdened by the undischarged debts of Te Mautari, which the Government has not liquidated. 

A government-owned copra mill was constructed on Betio in 2002 at a cost of $4.1m, to process copra and export coconut oil. The enterprise is not yet in commercial operation, but coconut oil is being exported to Australia in small quantities and copra meal is supplied to the Temaiku farm. The cost structure of the copra buying and processing operation makes it likely that substantial subsidies will continue to be required from the government budget.   

Private sector development 

Tourism consists mainly of cruise ship traffic at Tabuaeran (Fanning Island) and sports fishers visiting Kiritimati (Christmas Island). Cruise ships visited Tabuaeran more frequently during the period and are expected to make 56 visits in 2003. The number of tourist visitors to Kiritimati, mostly sport fishers from USA, decreased from 1,157 in 2000 to 749 in 2002, reflecting a general decline in US-based tourist traffic. The number of tourists arriving in Kiribati other than cruise ship passengers is reported to have increased from 1,426 in 2000 to 1,619 in 2002, but there are doubts about the classification of visitor arrivals. Workshops on tourism awareness were organised on outer islands, where tourists are seen only in small numbers. The Otintaai and Captain Cook hotels remain in government ownership; both hotels are in need of structural repair and refurbishment. 

The Small Enterprise Development Act, which seeks to encourage small business activities through the setting up of a Private Sector Consultative Committee (PSCC) and a Guarantee Corporation, was passed in June 2002.  The PSCC is intended to be the forum where the private sector and the Government can consult and the private sector can have input to decision-making. The Guarantee Corporation is meant to help private businesses secure loans from domestic financial institutions for viable projects, but it has not so far been established. 

Training in Start Your Business (SYB) and Improve Your Business (IYB) took place in all islands and five courses have been conducted in Tarawa. An average of thirty participants attended each course and TTI has assisted in training twelve SYB and IYB Trainers. Only two people are known to have started businesses following their SYB training. The effectiveness of the IYB course is yet to be evaluated by a survey of participants. 

The Consumer Protection Act took effect in February 2003, price control officers are operating and workshops on price control have been conducted. 

A Financial Services Commission is to be established to oversee financial institutions (see also above). The World Bank’s Foreign Investment Advisory Service undertook a review of the Foreign Investment Act and Regulations in 1997 and a workshop about the Act was held in 2001, but no resulting policy action has taken place so far. NDS intentions for privatisation were not realised. As noted above, in the economic and social conditions of Kiribati, an alternative approach to improving the efficiency of public enterprises appears to be needed. 

Communications, Infrastructure and Services 

A programme was undertaken to upgrade Bonriki airport to meet international safety standards by 2002. Work on this is still in progress. Air Kiribati continues to face financial and operational difficulties in maintaining scheduled domestic air services. In July 2002, acting on government instructions, the airline leased an ATR 72 aircraft at an annual cost of $3m to enable it to establish a regional service in the central Pacific. The aircraft commenced services in December 2002. Though passenger traffic on some routes covers direct operating costs the airline is expected to need substantial government subsidy to sustain the ATR operation. 

There were no significant developments in 2000-3 in domestic shipping services. The need to improve safety, maintenance and operating standards on domestic vessels was highlighted in 2002 by concerns about the certification of trainees from the Marine Training Centre, who underwent practical training on domestic vessels as part of their course. That training is now undertaken on overseas-registered vessels, but safety standards on domestic shipping remain a matter of concern. 

Based on a feasibility study by the International Telecommunications Union (ITU), work is in hand to replace the existing VHF systems at South Tarawa, Kiritimati and Tabuaeran with Digital Radio Concentrator Systems (DRCS). The work is expected to be completed at the end of 2004. The estimated cost of $7m is being funded by loans from the Bank of Kiribati and—subject to confirmation—the Bank of China. Satellite systems are to be installed at Butaritari, Abemama, Tabiteuea North, Beru and Onotoa. The cost of this investment, estimated at about $1.9m is being met by TSKL from retained profits. Completion of these improvements is also expected at the end of 2004. 

The Broadcasting and Publication Authority began planning for replacement of its old complex of buildings and equipment on Bairiki with assistance from overseas aid. Broadcasting to Kiritimati was upgraded and plans made to improve the service to Teraina and Tabuaeran during 2004  

Public Utilities and Construction 

Under the ADB loan-financed SAPHE Project the existing South Tarawa water supply system has been rehabilitated and a new 18km pipeline laid between Teaoraereke and Bonriki. Elevated tanks have been completed in the water reserves and along the main pipe, and 2,400 tanks are being installed at homes and connected to the water supply. The project is also promoting better use of water resources by a programme of participative community education. 

The South Tarawa sewerage system has been improved by construction of additional manholes for access to the current system and laying of pipe at Bikenibeu.  Construction of two solid waste landfill pits is underway, which will improve solid waste management and help to conserve ground water resources. The amount of solid waste to be disposed of in the landfill is expected to be greatly reduced (greatly extending the life of the pits) by a solid waste recycling programme being implemented by collaboration among government and nongovernment agencies.  

Two new 1.4mw electricity generators and a new powerhouse were installed at Bikenibeu in 2002 at an estimated cost of $22m, of which Japanese aid provided $20m.High-voltage distribution cables and transformers between Bikenibeu and Bairiki were also replaced under the project. There has been some improvement in the reliability of the power supply, but installed capacity of the system is still insufficient to meet peak demand, and load-shedding power outages are still occurring. Further investment is planned in 2004 to include two new generators  

and new powerhouse at Betio and the replacement of the existing cable between Betio and Bairiki, to give a total installed system capacity of 6.45mw. The Government has purchased one of the new generators for Betio and is seeking Japanese aid for the other. The Government intends to retain ownership of the generation and distribution assets and lease them to PUB to operate. 

Lands and Environment 

The Division of Lands Management in MELAD has introduced an effective system for land subdivision in South Tarawa and identified leased lands in South Tarawa that could be returned to landowners. The Division also opened a new office in Kiritimati Island in January 2001. Long delays in processing of business leases at Kiritimati were being addressed at the end of 2003.  

A project to identify cost-effective ways of adapting to climate change was begun in 2002 with help from the World Bank and Japan. Extensive consultations with island communities, to be followed by technical studies, are being mounted in preparation for the design and implementation of adaptation measures during the coming NDS period. 

Kiribati is party to regional and international agreements concerning climate change and biodiversity, and is implementing a number of programmes, including the promotion of traditional medicines for the treatment of lifestyle diseases. 

Work continues to raise public awareness about the importance of caring for the environment and the effect of the Environment Act. The Environment and Conservation Division has developed processes and procedures for development control, Environment Impact Assessment (EIA) and pollution licensing.  Sites have been identified for water reserves and community consultation about these sites is in progress.  

Pressure on land in South Tarawa from the growing population has made the implementation of regulations about leaseholds and squatting very difficult, requiring patience and firmness by the relevant officials. The difficulty is compounded when the implementation of regulations is made into a political issue at local or national government level. 

Housing 

The Kiribati Housing Corporation has used funds from the SAPHE Project and Housing Corporation funds to lend money for improvement of domestic water storage and sanitation and the extension and construction of houses. In 2000-3 the Corporation financed 86 houses, of which 21 houses have been completed and 65 were under construction in September 2003. KHC strengthened its internal procedures and developed new products and services to help its customers.   

Information on other house construction activities is not available, though this varied, widespread and continuous activity constitutes an important aspect of urban social and economic development. 

Social Infrastructure and Services Education and Training 

Training of pre-school teachers began in 1999 but was later suspended. Early childhood education nevertheless spread. More than half the children who enrolled in grade 1 in 2000 

were reported to have attended at least 100 hours of an early childhood development program. 

Capacity and enrolments in Forms 4-6 have been increased by 25%. This has been achieved as part of a wider restructuring of the education system, involving a doubling of enrolments at junior secondary schools (JSS). The JSS expansion required the construction or enlargement of nineteen schools at a total cost of about $9.3m, of which AusAID has contributed $6.1m. There are now 24 Junior Secondary Schools, all fully staffed. 

Upgrading of teachers’ and lecturers’ qualifications will need to continue, along with improvement of classroom resources. All classes 1-2 are reported to be equipped with pupils’ desks, while classes 3-6 and teachers are receiving desks and tables. 

Continued attention is needed to the programme of school building maintenance. A number of primary school and JSS buildings are poorly maintained. Greater involvement and acceptance of responsibility at community level will be necessary to solve this problem. The Government intends that in 2004 Island Councils will be responsible for carrying out maintenance on school buildings and staff quarters identified and funded by MEYS.   

A project to extend vocational skills training to outer islands by construction of Island Learning Centres was identified for funding by the EU, and construction of the first such centre at Betio was begun in 2003. Within the public service, which accounts for one-third of wage employment, a strategic plan has been drawn up to develop capacity and skills of staff and to improve the process of scholarship selection.    

Health 

The standard of health care delivery has risen over the last three years, with health indicators slowly but steadily improving. Access to health services on the outer islands has been improved through the construction of ten new clinics throughout the Gilbert group, coupled with an improvement in the nurse to population ratio from 1:450 to 1:375 through an increase in the graduation of specialist and general nursing staff, including additional midwifery and public health nurses. The number of trained doctors at post has increased both at the basic and specialist level, including radiology and pathology, and there has been an increase in the number of highly trained paramedical staff, with an additional pharmacist, two dentists, a biomedical engineer, two lab technicians and two physiotherapists. 

Village welfare groups have been revived, Peace Corps Volunteers have been recruited as community health workers to make the primary health care system more responsive to community needs, and supervisory visits have been increased. The drug budget was increased and the outer island drug order system reviewed to improve its effectiveness. More reliable telecommunications will enable lower-cost delivery of a better rural health service.   

Pressure to provide costly curative services for lifestyle or self-inflicted illness works against the more cost-effective strategy of giving priority to primary health care and increasing personal and community responsibility for health. The rising cost of public health provision indicates there is a need to voice support for the PHC-first principle at the highest levels. In support of PHC a Traditional Medicine Research Centre has been approved by the Government, and a Tobacco Control Act has been drafted. Growing concern about the risk of HIV/AIDS is being met by public education and preparation of legislation to assist in the prevention, identification and treatment of the sickness. 

The costs of running and maintaining the central hospital are eating into the health budget, and in-patient accommodation is being strained by population growth. Cost recovery is in use for some hospital services, as much to limit demand as to collect revenue.  

The policy of using cost recovery measures to collect some revenue for the health system was approved by the Government in January 2001, and staff have been trained in health care financing. Cost recovery measures are naturally not popular with the public but if the health budget is to meet the increasing health needs of the people of Kiribati, generally caused by lifestyle diseases, it is appropriate for cost recovery to apply to some curative services.

Community and Social Welfare 

Over thirty projects to improve the delivery of government services or provide infrastructure were implemented in outer islands in 2000-3. One million dollars was allocated towards rural projects, which resulted in every outer island having access to at least one project.  

A youth policy has been established and groups from Tarawa and the outer islands have been trained about the policy. Kiribati participated for the first time with a national team in the 2003 South Pacific Games, at a cost of about $250,000, and became a member of the International Olympic Committee. Construction under Chinese aid of the $8m national sports stadium at Betio began in 2002 and, after some hesitation related to the outcome of the national elections, resumed in mid-2003. 

Police operations are moving from a ‘force’ to a ‘service’ approach, and the abilities of staff in the area of community policing are being upgraded. The police need more equipment to enforce speeding laws, and modern legislation to enable them to tackle the crime of domestic violence. Most crime apparently remains at a low level, but no statistics on incidence of crime and prosecutions have been available since 2000. Social workers and other observers express concern about the pressures of urban living and the emergence of ‘urban’ crime. This typically involves dangerous driving, domestic violence, house-breaking and gang activities, and is often related to excessive consumption of alcohol. Two police officers are currently undertaking studies at USP. Courses in community policing and dealing with domestic violence have been provided through PSO training activities with external assistance. 

Section 4: Development Strategies 2004-7 

The national development concerns of Government are here organised into key policy areas (KPAs). Issues in each KPA are addressed by one or more strategies, key activities are identified to get strategies moving, and lead and support ministries are identified for each strategy and activity. The scope of each of the six KPAs is summarised below. Strategies and activities follow in table format. 

1.Economic growth. Growth needs investment, and both domestic and foreign investors need confidence in the stability of government finances and macroeconomic policies. This confidence is to be strengthened by consistently demonstrating sound public financial management through sustainable budgets and prudent use of loans and reserves. Growth-focused strategies include stabilising total population by 2020-2025 to enable higher levels of income per person to be achieved, cost-effective measures to minimise the risk of damage and disruption from climate change, developing coherent policies for the use of information technology, promoting private investment in marine resources, tourism and any other viable enterprise, maximising sustainable income from fisheries access and other sovereignty-based rents, securing stable flows of development aid, upgrading infrastructure and utilities to support productive enterprise, and price stabilisation and extension services support for rural production. 

2.Equitable distribution. Distributional strategies include improving social and economic statistics to better measure conditions and monitor changes, upgrading outer island (OI) governance and support for commercial production of goods and services in rural areas, training of trade union negotiators, provision of dedicated OI infrastructure funding under OI control, improving standards of domestic shipping, overhaul of land adjudication system and government land dealings to avoid unfair practices, better collaboration with churches and NGOs to assist people in need, and introduction of cash allowances for elderly people. 

3.Public sector performance. More efficient use of resources by Ministries  and public enterprises (PEs) will be sought by implementing the performance monitoring system set out in NDS and publishing the results, developing incentives for competitive behaviour in the public sector, introducing Service Agreements for PEs receiving government current or capital funding, opening subsidies for uneconomic services to public tender, and assisting PEs to make internal efficiency gains. 

4.Equipping people to manage change.  

Education and Training strategies aim to prepare students for a realistic range of postschool livelihoods, reverse the decline in literacy, improve the quality of education in government and church schools, strengthen systems for schools maintenance and delivery of teaching materials, and extend the outreach and scope of vocational training.  

Health strategies include improvement of health service management and staffing, increased efforts to extend family planning and roll back HIV/AIDS and life-style diseases, extensions to existing hospitals and examination of the feasibility of an additional hospital in the Southern Gilberts, and attention to the public health threat posed by inadequate standards of sanitation in urban areas. 

Cultural strategies seek to help people manage change by spreading knowledge and practice of traditional skills and activities, and promoting respect for traditional values and relationships in a monetised environment.  

Governance strategies concern improvement of public accountability by implementing NDS-based publication of information and performance monitoring; a stronger and more independent statistical office; overhaul of local government in South Tarawa and establishment of participatory local government in Line Islands; and the equipment, re-training and more accountable direction of the police to deal with increasing problems of law and order arising from concentration of people in urban areas. 

5.Sustainable use of physical resources.  

Maintenance of public assets is to be improved by identification in operating plans, stronger performance monitoring and rules on contracting out. Application and enforcement of the Environment Act will be strengthened by coordination among national and local government agencies. Marine resource management will seek to maximise sustainable benefits from the offshore and domestic tuna fisheries, and will enforce sustainable yield restrictions on other fish stocks under pressure, using community-based methods wherever possible. The economic and commercial feasibility of re-mining Banaba and obtaining construction aggregates from atoll lagoons will be examined, and if found to be feasible, private investment will be sought in these activities. Regional developments in seabed exploration and mining will be monitored. Land use managementwill embody public health and environmental protective standards, including practical measures to assist households and communities to adapt to climate change.  

6.Protecting and using financial reserves.  

Strategies to make greater developmental use of domestic credit include increased support for Village Banks, use of commercial loans for telecommunications and electric power investment, and establishment of prudential supervision of all financial institutions. The RERF’s ability to underpin public finance indefinitely is to be strengthened by review of the guidelines for access to the Fund’s earnings while maintaining the Fund’s real value, followed by consideration of splitting the Fund into a protected national reserve fund and a smaller government reserve fund, and subjecting the reserve fund structure to stronger parliamentary supervision.