Kiribati’s story on the front lines

By this measurement, Kiribati is massive. It has the second largest EEZ in the Pacific – some 3.5 million square kilometres - the same surface area as India - only bound up in blue, green and white.

More surprises await on the island of Tarawa, Kiribati's political and economic capital. 

Tarawa is shaped like a capital letter V, lying on its side. The inside of the V is a large lagoon while the outside of the V is ocean.

About half of the country's 110,000 people live in south Tarawa along a 30-kilometre strip which, in parts, is only a causeway connecting islets which were the scene of a hellish battle in World War II between Japanese troops and US Marines.

South Tarawa has an area of just over 15 square kilometres, making it one of the most densely populated areas in the Pacific.

The population is growing by about 4.5 per cent per year, through high fertility rates and migration from the outer islands. South Tarawa's headcount is on track to double by 2030.

This growth comes against a backdrop of climate change. Kiribati's islands are mostly just three-to-four metres above sea level, putting the country on the front of the frontlines against climate change.

Kiribati's limited amount of land is mostly owned by families, with even the government often being a lessor.

Slow onset

Reclamation and sea works are vital, amid rising sea levels and forecasts of more extreme hot days and heavy rain events in future.

In a recent speech to the UN General Assembly, President Taneti Maamau said his country offered "heartfelt condolences" to the victims of recent natural disasters in another sea of islands, the Caribbean.

However, Maamau warned the people of Kiribati, Tuvalu, Marshall Islands and the Maldives and other small island states continued to suffer from the impact of the "slow onset climate disaster".

"This may not capture the attention of the global community due to its slow impact and limited media attention but it is causing pain and suffering in our communities," he said.

"Like you, Kiribati also looks forward to a day when we have to tell a different story to our children, and their children’s children. A story without heartbreaking human suffering and loss. A story of success and joy."

There are pressing public health problems due to limited freshwater supplies and poor sewerage/sanitation services, which cause pollution problems and water-borne illnesses like diarrhoea and dysentery which, in turn, causes high infant mortality.

It has poor quality soil which – combined with water shortages – make it hard to grow food crops. But I had an interesting chat with one local who successfully cultivates a kitchen garden through traditional means - mixing coconut husks in the soil and even burying some old food tins which slowly rust.

The World Bank and the Asian Development Bank are working on sanitation and water projects, which will hopefully ease these problems.

New Zealand and Australia are also active aid donors to Kiribati, while the World Bank/ADB are jointly backing a submarine cable project to link Nauru, Kiribati and the Federated States of Micronesia to the international internet.

These projects – plus major roadworks funded by the World Bank, the ADB, Australia and Japan - helped make for sustained economic growth in recent years. Around half the population is aged under 24 years, meaning there is a pressing need to grow industries which will provide new jobs at home.

Like elsewhere in the Pacific the remittances of locals working overseas is important. The Marine Training Centre on Tarawa, run in cooperation with German shipping lines, has trained thousands of seafarers over the last 50 years.

Kiribati also provides workers for overseas tourism resorts such as Hayman and Hamilton islands in the Greater Barrier Reef off Queensland.

Inbound tourism is still limited, with work needed on infrastructure and training plus a general clean-up which includes many dumped cars.

New flights

Until recently, the major international airline link to Tarawa is via Fiji, plus flights between Nauru and the Marshall Islands. New flights have begun from the capital of the Solomon Islands, Honiara, which provide a link to Brisbane and elsewhere.

But as things stand, the Kiribati economy is kept afloat by fishing – specifically the tuna industry.

The President told the UN about 80 per cent of the country's recurrent budget revenue comes from fishing, mostly selling access rights to operate in Kiribati's EEZ.

In his UN address, President Maamau welcomed proposals for an international, legally-binding instrument for managing marine diversity outside the EEZs.

"I cannot emphasize enough the importance of this issue with an ambitious vision which 20 years from now, Kiribati aspires to implement a self-reliance strategy to harvest, process and market its own tuna," he said.

Across the Pacific there are problems with illegal fishing and ocean acidification caused by the increased absorption of carbon dioxide from the atmosphere decreasing the pH levels of the sea.

But Kiribati has provided a good example of how small Pacific nations can claim a greater share of the sea's bounty for their domestic economy and provide local jobs.

A determined Fijian businessman of Chinese heritage, Xuejan Du, started in the restaurant game Fiji before going into the fishing industry in the 1980s. 

As he succinctly explains: "It’s a reliable business because the market is there – people want to eat good food."

However, it’s fair to say Du quickly got hooked on the tuna industry after starting out in Fiji and then looking further afield.

This led to much research (including two reports from Chinese fishing experts) before getting a shortlist of three countries – Kiribati, the Solomon Islands and Vanuatu.

After deciding on Kiribati, it took more than five years to get an agreement to create Kiribati Fish Ltd in late 2010. KFL is a joint venture owned by the Kiribati government (40 per cent with the Fisheries Minister as chairman); Mr Du's Golden Ocean Fish of Fiji (40 per cent); and Shanghai Deep Sea Fishery of China (20 per cent).

It took a year to a build a $A10 million fish processing plant which opened in 2012. But as Du notes, this involved building the plant's own desalination, sewerage and power plants.

"Nothing was here, everything had to be imported,” he said. “The costs are double Fiji."

Artisanal

KFL manages more than 15 chartered tuna long-line vessels which operate in Kiribati's EEZ. It also buys from local ("artisanal") fishermen who catch tuna.

It is certified by the Marine Stewardship Council and has met a swathe of food and health standards, which include a six-monthly audit run out of Australia.

Importantly, it has trained some 600 locals and employs about 200 of them in the processing plant including some 40 as managers. Improved air and sea freight links mean it is able to shift 12 tonnes of high-end tuna every fortnight from Tarawa, mostly for the US, Japan and Australia.

Now, KFL plans to build a new $A50 million tuna plant next door to the existing plant. It recently won health and food approval to export to the European Union – which requires fish which can be traced back from the buyers in Europe to their origin in Kiribati.

It is hoping for separate EU certification its fish exports are properly recorded and legally caught, removing a so-called "yellow card" warning through better regulation and management.

There are good signs on this front. Last year, Kiribati banned all commercial shark fishing in its huge Exclusive Economic Zone and created the Phoenix Islands Protected Area (PIPA) as a spawning ground for tuna the size of California (about 11 per cent of the EEZ).

This year, a Taiwanese ‘purse seiner’, which uses a large wall of netting, was fined $US4 million dollars for illegal fishing in the Phoenix Islands Protected Area. But there are still problems with illegal fishing by so-called ‘blue boats’ from Vietnam.

The success of fresh and frozen tuna exports are worth more than the dollars earned in terms of putting Kiribati on the mental map of more people. Indeed, KFL tuna has already been on the menu twice at UN functions in New York.

Kiribati, by the numbers

Most of Kiribati's private businesses are on Tarawa and the government supports community income on the outer islands through a copra subsidy.

There are other challenges, including in education where there is a shortage of trade skills and English proficiency.

Yet the government is serious about its work and has a vision, which includes a better trained public service, anti-corruption measures and establishing a Leadership Commission.

The government has been disciplined in building a sovereign wealth fund, the Revenue Equalisation Reserve Fund (RERF) which stood at $US841 million last year.

It looks to have a "cash reserves buffer" included in the budget, in case of unexpected falls in revenue and external shocks, while making limited drawn downs from the RERF.

But always, lurking on the horizon, are the threat of climate change and extreme weather events.

Action

Back in 2011, the UN Secretary-General Ban Ki-moon visited Kiribati and noted the need for urgent international action on climate change.

He took time to join then Kiribati President, Anote Tong, and young islanders to plant mangroves on a beach to help protect the area from the effects of rising sea level.

Responding to a reporter's question, the Secretary-General described Kiribati as being at the "front of the frontlines" on climate change. But in 2017 that section of beach is still being eroded.

Last month, Kiribati's current President Maamau, a former Finance Minister, told the UN access to climate financing, like the Green Climate Fund, took too long to process and disburse.

"The longer the delay in delivering this much needed financing for urgent adaptation, the greater the impact on our people and environment, and the higher the cost,” he said. “We simply cannot afford to wait any longer."

As part of the government's 20-year vision for Kiribati (known as KV20), it plans to break with tradition and offer concessional financing from the RERF sovereign wealth funds for its sustainable development agenda, especially in relation to climate change and disaster risk reduction.

So, there is a lot happening on the Large Ocean State of Kiribati, way out in the Big Blue of the Pacific. Kiribati is getting help from outside, but it is also trying to help itself.

Mark Skulley is one of Australia’s most-respected business journalists, a veteran of more than two decades at Fairfax Media including The Australian Financial Review. He travelled to Samoa with ANZ to run journalism classes for local journalists.