The Potential of Kiritimati Island as - Asian Development Bank

Technical Assistance Consultant’s Report 

Project Number: 38138 (TA 4456) 

November 2005 

Kiribati: Preparing the Outer Island Growth Centers 

Project 

{(Financed by the )} 

Prepared by British Power International, e-Gen, and Norplan 

For {Executing agency} 

{Implementing agency} 

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and 

ADB and the 

Government cannot be held liable for its contents. (For project preparatory technical 

assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

The Potential of Kiritimati Island as an Economic Growth Center: An Initial Assessment 

TA No. 4456 – KIR 

Preparing the Outer Islands 

Growth Centers Project, 

Kiribati 

The Potential of Kiritimati 

Island as an Economic 

Growth Center - An Initial 

Assessment 

November, 2005 

TA No. 4456 – KIR: Preparing the Outer Islands Growth Centers Project, Kiribati - SKM 

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Acronyms and abbreviations used in the text. 

Acronyms and Abbreviations 

ADB Asian Development Bank 

AGs Office of the Attorney General 

AusAID Australian Agency for International Development 

CASL Committee for the Allocation of State Lands 

CLPB Central Land Planning Board 

CPP Central Pacific Producers 

DLUP Detailed Land Use Plan 

EEZ Exclusive Economic Zone 

ELAD Environment, Lands and Agricultural Development 

GDP Gross Domestic Product 

GLUP General Land Use Plan 

GNP Gross National Product 

KCCS Kiribati Copra Cooperative Society 

KPF Kiribati Provident Fund 

KUC Kiritimati Urban Council 

KLLPB Kiritimati Local Land Planning Board 

KWASP Kiritimati Island Water and Sanitation project 

LINNIX Ministry of Line and Phoenix Islands 

LMD Land Management Division 

LMDK Land Management Division Kiritimati 

LPA Land Planning Act, 1977 

MCIC Ministry of Commerce, Industry and Cooperatives 

MELAD Ministry of Environment, Lands and Agricultural Development 

MFED Ministry of Finance and Economic Development 

MFMRD Ministry of Fisheries and Marine Resource Development 

MISA Ministry of Internal and Social Affairs 

MCTTD Ministry of Communications, Transport and Tourism 

Development 

RERF Revenue Equalisation Reserve Fund 

SLA State Lands Act, 2001 

SOE State Owned Enterprise 

SPC South Pacific Commission 

TA Technical Assistance 

TOR Terms of Reference 

Note on currencies 

The national currency of Kiribati is the Australian dollar, with the prefix $AUD or A$. 

Monetary values in this report are stated in the national currency unless otherwise 

indicated. 


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Contents 

ACRONYMS AND ABBREVIATIONS......................................................................................................... 2 

EXECUTIVE SUMMARY .............................................................................................................................. 4 

1. INTRODUCTION ........................................................................................................................................ 9 

2. BACKGROUND TO THE TECHNICAL ASSISTANCE (TA)............................................................... 9 

2.1 TA BACKGROUND..................................................................................................................................... 9 

2.2 CONCEPTUAL APPROACH TO THE TA...................................................................................................... 11 

2.3 DEFINING THE CONCEPT OF AN ‘ECONOMIC GROWTH CENTER’.............................................................. 12 

2.4 IMPLEMENTATION ARRANGEMENTS........................................................................................................ 15 

3. MACRO ECONOMIC CONTEXT – KIRIBATI................................................................................... 16 

3.1 MAIN FEATURES OF THE ECONOMY ........................................................................................................ 16 

3.2 KIRIBATI - RECENT ECONOMIC PERFORMANCE- 2004............................................................................. 18 

3.3 KIRIBATI - PROSPECTS FOR 2005-2007.................................................................................................... 18 

4. THE EXISTING PLANNING AND DEVELOPMENT FRAMEWORK FOR KIRITIMATI 

ISLAND........................................................................................................................................................... 19 

4.1 NATIONAL DEVELOPMENT STRATEGIES (NDS), 2004-2007 ................................................................... 19 

4.2 POPULATION............................................................................................................................................ 21 

4.3 ENVIRONMENT ........................................................................................................................................ 23 

4.4 LAND SUPPLY AND DEVELOPMENT ......................................................................................................... 24 

4.5 HOUSING ................................................................................................................................................. 27 

4.6 INFRASTRUCTURE AND SERVICE PROVISION ........................................................................................... 28 

4.7 CURRENT INSTITUTIONAL AND GOVERNANCE SETTING .......................................................................... 32 

4.8 CURRENT ISLAND AND VILLAGE PLANNING ARRANGEMENTS ................................................................ 36 

4.9 LEGAL AND REGULATORY FRAMEWORK................................................................................................. 39 

4.10 SUMMARY ............................................................................................................................................. 43 

5. THE LAND USE DEVELOPMENT STRATEGY AND LAND DEVELOPMENT PROGRAM, 2005- 

2008, FOR KIRITIMATI ISLAND............................................................................................................... 45 

5.1 THE LAND USE DEVELOPMENT STRATEGY FOR KIRITIMATI ISLAND ...................................................... 45 

5.2 THE PROPOSED FRONTS FOR LAND DEVELOPMENT ................................................................................ 48 

5.3 SERVICE AND INFRASTRUCTURE NEEDS.................................................................................................. 49 

5.4 PHASING OF THE DEVELOPMENT FRONTS, 2005 -2008............................................................................ 51 

5.5. IMPLICATIONS ........................................................................................................................................ 53 

6. ECONOMIC ACTIVITY AND THE BUSINESS ENVIRONMENT IN KIRITIMATI ISLAND ..... 56 

6.1 ECONOMIC STRUCTURE........................................................................................................................... 56 

6.2 THE NATURE AND COMPOSITION OF THE SECTORS ................................................................................. 59 

6.3 COSTS OF DOING BUSINESS..................................................................................................................... 73 

6.4 WHAT CONSTRAINS THE GROWTH OF THE PRIVATE SECTOR ON KIRITIMATI ISLAND? ........................... 74 

6.5 THE STATUS OF FOREIGN INVESTORS IN KIRITIMATI ISLAND.................................................................. 79 

6.6 CURRENT DONOR PROJECTS IN KIRITIMATI ISLAND................................................................................ 82 

7. THE POTENTIAL OF KIRITIMATI ISLAND AS AN ECONOMIC GROWTH CENTER AND 

IMPLICATIONS............................................................................................................................................ 83 

7.1 POTENTIAL DRIVERS OF ECONOMIC GROWTH......................................................................................... 83 

7.2 RATIONALE OF KIRITIMATI ISLAND AS AN ECONOMIC GROWTH CENTER ............................................... 85 

7.3 POTENTIAL INVESTMENT AREAS TO SUPPORT ECONOMIC GROWTH ....................................................... 88 

7.4 THE IMPLICATIONS OF POSITIONING KIRITIMATI ISLAND AS AN ECONOMIC GROWTH CENTER .............. 90 

7.5 WHERE TO FROM HERE? .......................................................................................................................... 95 

ANNEXES ....................................................................................................................................................... 97 

ANNEX A: ESTIMATE OF KIRITIMATI ISLAND GDP BY INDUSTRY................................................................. 97 


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Executive Summary 

This report has been undertaken as the initial task of TA No. 4458 – KIR: 

“Preparing the Outer Islands Growth Centers Project”. The purpose of the report is 

to detail the results of a 3 week initial assessment undertaken in October, 2005, on 

the potential of Kiritimati Island to become an economic growth center. The report 

amongst other matters (i) summaries the TA background and conceptual approach 

to the design of the TA including the meaning of the concept of ‘economic growth 

center’ (ii) assesses the macro economic context for Kiribati as this is the economic 

environment in which Kiritimati Island must operate: (iii) details the existing 

planning and development framework in which decision making for Kiritimati Island 

takes place (iv) describes the economic structure and composition of sectors, the 

costs of doing business and identifies key constraints to private sector growth and 

(v) summarises the potential of Kiritimati Island as an economic growth center and 

implications for change. 

The report finds that the condition of the planning and management framework for 

Kiritimati Island development is characterised by an array of institutional, regulatory 

and policy settings, highlighting the interrelationships required to be addressed to 

achieve more effective economic, physical and social planning and development. 

The Government of Kiribati National Development Strategies (NDS), 2004-2007, is 

the overarching planning framework for Kiritimati Island which guides Government 

decision-making and budget preparation over the 2004-2007 plan period. The 

NDS makes specific mention of the need to undertake the feasibility of growth 

centers in the Line and Phoenix Islands, namely, Kiritimati Island. 

The assessment of the economic structure of Kiritimati Island indicates that GDP is 

estimated to be around $8.1 million (2005 prices), which is 9.0% of the estimated 

national GDP for 2005 (this percentage compares to the island’s population share 

of 6.1%). The economy is dominated by the services sector, accounting for about 

80% of total GDP. Community services are the largest individual contributor to 

GDP, with a share of about 20% of GDP. The construction industry is the next 

largest contributor, with about 18% of GDP. Wholesale/retail trade accounts for 

about 11% of GDP. 

As for Kiribati as a whole, the Kiritimati Island economy has a narrow base. This is 

reflected in a high import dependency, a low level of exports and small-scale 

manufacturing activity for the local market (eg. bakery, building materials). It is 

likely that the ratio of the value of imports to GDP is in the order of 75%. Export 

industries account for about 7% of GDP, or $580,000, the majority of which is the 

export of pet fish. Trade openness, defined as the average of the value of exports 

and imports as a percentage of GDP, is over 40%. Tourism is estimated to account 

for around 3% of GDP, or $260,000. 

There is a high level of private sector activity in Kiritimati Island, with the private 

sector estimated to contribute about 50% of GDP. The corresponding figure at the 


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national level is estimated to be about 40%. There are 9 private sector 

establishments contributing significantly to the Kiribati Provident Fund. However, 

the majority of economic activity is generated by a large number of small-scale 

businesses, many of which are home-based. The key reason for the comparatively 

healthy business sector stems from the fact that Kiritimati Island comprises people 

from all different home islands living together on State lands. Unlike all other 

Kiribati Islands, there are no strong controlling structures with the exception of the 

church, to constrain development aspirations on the island. Family kinship 

reciprocal arrangements exist but are not as strong and as far reaching as on one’s 

home island where complex extended family arrangements exist. 

Economic activity on Kiritimati Island can be divided into 6 sectors, namely, marine 

resources; agriculture resources; tourism sector; informal activities; service sector; 

and Government sector. Many of the sectors such as marine resources and 

tourism are at an early stage of development while others such as agriculture suffer 

from low yields and subsidised prices (copra as well as seaweed). The informal 

sector is strong, with an estimated 4 out of every 5 households involved in some 

form of informal activity. The service sector also plays an important role but is at 

an embryonic stage of development supporting the productive and Government 

sectors. Many services are small scale, part time and informal. All the sectors 

have their own constraints and opportunities, stemming from the island’s key 

economic features, namely: 

• lack of economies of scale in the provision of infrastructure and services 

resulting in high unit costs; 

• high degree of vulnerability because of the openness of the economy and 

the narrowness of its base; 

• markets are distant, transport costs are high and transport services (air and 

shipping) are uncertain; 

• market access for both exports and imports is poor; 

• limited independence in Government policy and decision-making resulting in 

delays and uncertainties, with decisions and approvals being made in 

Tarawa; and 

• little internal linkages between the various economic activities on the island. 

The report identifies that the cost of doing business is high on Kiritimati Island 

because of its remoteness from both Tarawa and other countries that have 

dealings with the island, plus the lack of economies of scale in the provision of 

infrastructure and services in Kiribati generally. However, it is considered that the 

direct costs of business inputs are generally not intrinsically higher than they 

should be, given the small size of the market, the subsequent low volume of 

transactions and the distances from key suppliers and customers. 


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The assessment finds that the overarching theme in the development of the private 

sector on Kiritimati Island is the prevailing attitudes in regard to fostering private 

sector development. Constraining private sector growth in Kiribati is a clear culture 

of norms, values and attitudes which, in the main, tend to be conservative and 

sometimes negative. The socio cultural reasons holding back the private sector 

are varied and include the: (i) egalitarian nature of society, (ii) potential inequitable 

distribution of wealth, (iii) prevalence of practices such as sharing and reciprocation 

(bubuti) which permeate day to day living and (iv) potential loss of political power, 

control and influence. The symptoms of the hesitancy to embrace the development 

of the private sector are subsequently reflected in the current framework in which 

business takes place in Kiritimati Island. These incudes the key constraints of; 

• lack of access to State Lands. 

• type of land tenure. 

• lack of business ‘know how’ and skills. 

• uncertainty of transport services both air and shipping. 

• quality of the physical infrastructures services. 

• lack of autonomy from Tarawa. 

• poor information flow. 

• community service obligations versus commercial rate; 

• public service efficiency. 

• access to capital. 

• island development coordination and governance arrangements. 

In terms of the potential of Kiritimati Island as an economc growth center, the 

assessment indicates that the drivers of economic growth can be either exportoriented 

production activity or domestic value added production. For exportoriented 

production to be economically efficient in small remote economies and 

lead to a sustainable economic activity, there must usually be some special 

advantage enjoyed by that economy such as natural attributes for tourism. For 

economic growth to come from domestic value added production, the internal 

economic linkages need to be developed. Given the above, the 3 most likely 

drivers of economic growth to underpin Kiritimati Island as an economic growth 

center in the short to medium term are: 

• tourism; 

• higher valued marine products and 

• the housing sector. 


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The assessment identifies the concept of an economic growth center as comprising 

the key components of: 

• the essential building blocks for growth such as political stability, law and 

order, fiscal and monetary stability, etc; 

• a robust enabling environment comprising responsive institutions, a 

relevant policy setting and pragmatic regulatory environment; 

• a productive public sector; 

• a growing private sector; and 

• development of the island’s productive sectors and resources (that is, the 

drivers of economic growth) 

The basic components of a potential economic growth center exist in 1 form or 

other on Kiritimati Island, thus there is a basic and elementary framework in place if 

the GoK decided to pursue development of the island as an economic growth 

center. The components exist notwithstanding (i) the current high risk nature of 

the economic and business environment, (ii) the varying stages of development of 

the above components and (iii) the constraints holding back business 

development. Key questions are if, how and when Government should intervene 

to act as a catalyst to bring this to fruition. The precarious national development 

situation facing Kiribati - including a lack of new private investment in production, 

high population growth rates, unchecked urbanisation on South Tarawa and the 

need for a growing monetary economy to support such population increases - 

suggests GoK has little other option but to grasp the opportunities for Kiritimati 

Island in a planned and sustainable manner. To not develop Kiritimati Island 

growth center will constrain economic growth and the benefits it can bring. 

Good economic growth and development opportunities will be missed if the 

Government is not prepared to support and facilitate these through planned 

intervention. The high risk environment will only be minimised by the GoK acting 

as a catalyst to reduce the prevailing economic, social and environmental risk 

constraints. Failing to act on these potential economic opportunities will only 

perpetuate hardship, slow social reform (such as training and knowledge benefits) 

and reinforce out of date policy, institutional and governance arrangements. The 

assessment indicates that the rationale for the island to become an economic 

growth center is therefore to; 

• capitalise on these economic opportunities and attempt to realise the 

potential for economic growth in a planned and sustainable manner, and 

• create an environment that maximises these advantages by development of 

the enabling environment, Government support for the private sector, 

efficient public sector, etc. 


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Based on the analysis of sector constraints, the assessment indicates there are a 

number of potential investment areas that could support the sectors identified as 

the most likely drivers of economic growth for Kiritimati Island, that is, tourism, 

higher valued marine products and the housing sector. Investment in a number of 

focused areas combined with the necessary policy, institutional and regulatory 

changes will facilitate a stronger enabling environment for private sector 

development. Under a theme such as “Supporting Kiritimati Island as an Economic 

Growth Center”, a number of investment projects could be developed in the 

following areas, namely, water supply, environmental sanitation, power supply, 

telecommunications, transport and aviation, as well as sector-specific infrastructure 

such as for tourism, marine products, housing support and training. 

The challenge for Government is now to strategically intervene and make a serious 

commitment to developing private sector opportunities concurrent with realigning 

the policy, institutional and regulatory setting on Kiritimati Island. If GoK agrees to 

embrace the development of Kiritimati Island as an economic growth center - 

noting the key elements in the growth center model include promoting private 

sector growth as the key engine of growth, supported by an efficient and effective 

public sector - then there are 4 main reform implications. These are: (i) GoK 

commitment (ii) revised policy setting (iii) institutional realignment and governance 

arrangements and (iv) legislation. Unless there is a clear long term commitment 

from the GoK, Kiritimati Island will remain unplanned in an integrated island 

planning context, not realizing its productive potential. 

The ADB and the GoK need to consider this report and decide whether they wish 

to proceed or not with the planning and development of Kiritimati Island as an 

economic growth center (as opposed to other island development models as 

applied by GoK such as on Fanning and Washington Islands). The initial step is to 

seek a high level commitment from Government including the subsequent need to 

realign the policy, institutional and regulatory setting in Kiritimati Island (pre 

conditions for an ADB investment loan) while concurrently undertaking the design 

of an ADB investment project. The GoK need to be aware of the implications of 

moving to and implementing an economic growth center model. If the ADB and 

GoK discussions are positive thus supporting continuation of the TA, the 

implications for Phase 1B of the TA are to focus on achieving 5 major outcomes, as 

outlined in the report. 


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1. Introduction 

This report contains work completed in Kiritimati Island, Kiribati, in the 3 week 

period commencing 5 October, 2005, to the 26 October, 2005, in respect of TA No. 

4456 - KIR: Preparing the Outer Island Growth Canters Project, Kiribati. 1 

Specifically, the report deals with an assessment of Kiritimati Island and its 

potential as an economic growth center for Kiribati, and the subsequent 

development implications for the Government of Kiribati and ADB. 

The structure of the report is as follows: 

• Section 2 summaries the TA background, conceptual approach to the 

design of the TA, the meaning of the concept of ‘economic growth center’ 

and TA implementation arrangements; 

• Section 3 assesses the macro economic context for Kiribati as this is the 

economic environment in which Kiritimati Island operates; 

• Section 4 details the existing planning and development framework in which 

decision making in Kiritimati Island takes place; 2 

• Section 5 outlines the land use strategy and land development program for 

Kiritimati Island as agreed by Government as this underpins development; 

• Section 6 describes the economic structure and composition of sectors, the 

costs of doing business and identifies key constraints to private sector 

growth; 

• Section 7 summarises the potential of Kiritimati Island as an economic 

growth center and implications for change; and 

• Annexes. 

2. Background to the Technical Assistance (TA) 

2.1 TA Background 

Kiribati is one of the poorest Pacific island nations and faces many constraints and 

opportunities to sustained economic, social and environmental development. The 

country faces major development constraints including (i) limited natural resources 

including freshwater and usable land (ii) minimal potential for economies of scale 

given the small size of the domestic market (iii) small and fledgling private sector 

development (iv) widely scattered, physically remote and sparsely populated 

1 

The report was prepared by Paul Jones, Development Planner/Team Leader and Lindsay Shepherd, Economist, of SKM. 

Thanks to Miire Raieta from LINNIX, GoK counterpart for this TA assessment, for her valuable assistance in Kiritimati 

Island. 

2 

Note Sections 4 and 5 have been adapted from information obtained under ADB TA No. 4257 – KIR. “Supporting Land 

Use Management on Kiritimati Island” Paul Jones was TL for this important TA. 


9


islands (v) limited cash opportunities outside central and local government 

employment and the small private sector which exists only in South Tarawa and 

Kiritimati Island. (vi) irregular shipping and plane access to outer islands and 

international markets (vii) limited education levels and high youth unemployment 

(viii) socio cultural constraints to the development of land including State lands on 

Kiritimati Island and (ix) declining public infrastructure and asset maintenance. 

To address the imbalance of social and economic development between the 

Gilbert Group of islands to the west including overpopulated South Tarawa as well 

as stemming rural urban drift to South Tarawa, the Government announced in 2004 

a strategic emphasis on promoting outer island growth centres. Although there has 

been no strategic assessment of the selection of growth centers at the national 

level, 3 Kiritimati Island, the largest atoll in the world and located some 4,000 

kilometres to the east of the capital South Tarawa in the Phoenix Group of Islands, 

has been designated by the Government of Kiribati (GoK) as one of a number of 

potential growth islands in Kiribati. 4 

This strategy is outlined in the GoK National Development Strategy, 2004-2007, 

which identifies many potential opportunities for Kiritimati Island including ecotourism, 

agriculture primarily copra, fishing and space telecommunications. It also 

targets Kiritimati Island as accommodating an increasing island population 

migrating from the overpopulated islands in the Gilbert Group, including South 

Tarawa. With a population of approximately 5,500 persons in 2005 on a land area 

of approximately 400 square kilometres, Kiritimati Island offers a comparatively 

good standard of living compared with the population and land ratios facing South 

Tarawa – approximately 40,000 persons on an atoll of some 18 square kilometres 

in area. With the exception of some freehold plots in Tabwakea village on 

Kiritimati Island, all land is State owned, such lands primarily leased from 

Government to local occupants including foreign investors such as the Japanese 

NASDA space tracking station. 

The rationale for undertaking an assessment of Kiritimati Island as a potential 

growth center, in the Kiribati context, is clear. The land area in Kiritimati Island is 

half the land area of Kiribati as a whole and its availability, albeit by many who 

have no secure land tenure including squatters, has led to accelerating and 

uncontrolled island migration. Its proximity to Hawaii and as of October, 2005, 

direct air connections to Fiji, New Zealand and Australia to the west, means access 

to possible markets for tourism and other products. As the land is State owned and 

not subject to conflicts between customary land owners over ownership and 

boundaries issues, there is the potential for the orderly and systematic release of 

land to meet demand for a range of land uses. Subject to proper resource 

management, there are abundant freshwater resources to support an island 

3 

This would include an assessment of the extent to which growth on one island can advance the welfare or relieve the 

pressures of development on another island, economic growth potential, physical resource base, environmental impact, 

access to social services, availability of infrastructure and services, political consensus and the costs and benefits of 

developing one (or more) islands over others. 

4 

Other potential growth islands nominated by Government including Tabituea North (southern Gilbert group) and 

Butaritari (northern Gilbert group). Based in MISA, UNDP has been undertaking island profiling and survey work as a 

basis to identify other potential growth centers. 


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population of 30,000 persons plus and there are marine and fish resources which 

may have further potential if the right enabling environment for development is 

created. Tourism potential depends on retaining and enhancing the island’s 

unique biophysical environment which, amongst other matters, includes its world 

class reputation for fishing, especially bone fishing, and bird migration. 

In the context of Kiritimati Island having now been identified as a major focus for 

decentralisation and accelerated private sector development, the Government has 

sought assistance from ADB to assess the potential of Kiritimati Island as an 

economic growth center. If the results of this assessment are positive, the TA 

would assist key stakeholders to outline a way forward by which the island may be 

developed in the role of a potential growth center, including developing and 

implementing an ADB investment plan. The increasing population growth and 

Kiritimati Island’s unique atoll resources present Government with the challenge of 

planning for and integrating economic, social and environmental development 

whilst providing an enhanced environment in which the private and public sectors 

can develop. 

2.2 Conceptual Approach to the TA 

The TA is being conducted in 2 phases, namely, Phase I and Phase II. Phase I is 

separated into two sub-phases - Phase IA and Phase IB. The completion of Phase 

1B and Phase 2 is subject to the results emerging from Phase1A (the current 

phase as summarised in this report). 

Given the need to assess the opportunities for economic growth in Kiritimati Island 

including fisheries, aquarium fish export, seaweed and tourism – and noting the 

increasing role of donors in Kiritimati Island such as the current Government of 

Japan grant to finance assistance in support to the fisheries sector for around 

US$7.0 million – the Development Planner/Team Leader and the Economist have 

undertaken a due diligence analysis in this current Phase 1A. This analysis verifies 

or otherwise: 

• whether the potential for economic growth exists and can be realistically 

achieved and 

• from the ADB perspective, whether an ADB investment loan can be justified 

or not. 

The Phase 1A analysis includes an analysis of constraints and opportunities for 

Kiritimati Island to act as an economic growth center. This includes identifying the 

institutional arrangements and necessary policy initiatives required to support this 

scenario. Local stakeholders have been involved in this process including 


11


identifying constraints and opportunities for local business and private sector 

development. 5 This above assessment is reflected in the current report. 

The results of the assessment undertaken in Kiritimati Island are to be discussed 

and presented to senior Government officials in Tarawa in November, 2005. If the 

results of discussions with ADB and Government indicate that Kiritimati Island 

cannot support an ADB-funded investment loan, the Team Leader and the 

Economist will submit a TA Final Report and the TA will be terminated after formal 

submission to the Government and ADB. If, however, the discussions with ADB 

and Government on the assessment report do support an ADB-funded investment 

loan, subject to implementing an agreed roadmap, the Team Leader and the 

Economist will be required to prepare a Phase IA Final Report incorporating a work 

plan for Phase IB. 6 The other members of the TA team, namely, the Infrastructure 

Specialist, the Environment Specialist and the Social Specialist will be fielded 

without delay to Kiritimati Island together with the Team Leader and the Economist 

as part of Phase 1B. It is expected that Phase 1 including Phase 1B if completed, 

should take approximately 3 - 4 months. 

In Phase IB, the TA will follow ADB’s Guidelines to Key Areas of Analysis of 

Projects to prepare the feasibility study and conceptual design of the proposed 

ADB investment plan as well as analysing further constraints and opportunities for 

Kiritimati Island to act as an economic growth center. Detail of the necessary 

institutional, policy and regulatory actions required to achieve this will be identified 

as well providing comments and suggestions on the detailed terms of reference 

(TOR) to be carried out in Phase II. Phase II will involve the preparation of a 

detailed investment plan including costs, preliminary designs and financing plan, 

for the agreed infrastructure and services, as part of both developing and 

implementing a development plan and strategy for Kiritimati Island. 

2.3 Defining the Concept of an ‘Economic Growth Center’ 

An appreciation of the concept of economic growth center is central to the 

assessment summarised in this report. 

In the Kiribati context, an economic growth center is defined as the designation of 

an island where the main purpose is to facilitate projects and activities designed to 

enhance production. 7 An economic growth center is one where Government 

makes a commitment to strategically intervene to develop the productive sectors by 

nurturing the private sector - typically the key to sustained growth - with 

Government and the public sector providing the supportive enabling environment 

by which this can occur. This includes Government fostering an environment 

5 

A joint LINNIX and ADB workshop with 28 stakeholders, both private and public sector, was held in Kiritimati Island 

on Friday 21 October, 20005, on the theme of “Kiritimati Island as a potential economic growth center”. See further 

footnote. 

6 

To be completed only if the Government and the ADB decide to proceed. 

7 

There is a distinction between economic growth and development. The term ‘development’ is used in a wider context 

as it embraces improvements to health, education, water supply, power and the like as well as economic development 

activities. 


12


conducive to facilitating business development and investment including a program 

for the provision of public infrastructure and services. The latter is needed to 

underpin economic, social and environmental growth including the private sector. 

The objectives of an economic growth centre would be to: 

• promote development of the island’s productive resources by the private 

sector; 

• provide productive employment opportunities for the labour force; 

• provide stronger income growth for all I-Kiribati; 

• reduce levels of poverty by improving levels of health, access to education, 

water supply and generally improving the standard of living for the island 

population; and 

• put in place the necessary institutional, policy and regulatory reforms by 

which the above objectives can be achieved over time. 

A conceptual framework to assist in understanding the notion of an economic 

growth center is shown in Figure 2.1. The advantage of developing a framework is 

that it can provide a sense of strategic direction and priority so as to systematically 

deal with detail whilst providing a sense of coherent direction in developing and 

managing an island’s economic, social and environmental growth. The framework 

indicates those components that need to be facilitated to achieve the main goal of 

an economic growth center, namely, increased productivity concurrent with 

reduced levels of poverty. The framework suggests those essential building blocks 

of development that need to be in place to have a successful growth center. This 

includes political stability, law and order, good governance, a sound macro 

economy, inclusive social policies, fiscal and monetary stability and a sustained 

political commitment to achieving increased public and private sector performance 

and productivity. A supporting enabling environment for growth based on effective 

and responsive institutions, policy reform and rules and regulations so as to 

achieve both an efficient public sector and a growing private sector underpinned by 

investment, needs to be developed. 

The framework shows that the development of an enabling environment provides a 

platform by which the productive sectors and island’s resources, namely, natural 

resources, land, labour and capital, can be developed by the private and public 

sectors. The framework indicates that the goal of whether an economic growth 

center is being achieved or not can be checked against a range of indicators. 

These include increased levels of employment and job opportunities, rising 

incomes, access to land and secure property rights, increased water supply and 

power, increased educational opportunities, improved health services, regular 

availability of imported goods, increase in number of private businesses, more 


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EFFICIENT AND 

EFFECTIVE PRIVATE 

AND PUBLIC 

SECTORS 

FOSTERING OF 

THE ENABLING 

ENVIRONMENT 


Figure 2.1 – Framework for Understanding the Concept of an Economic Growth Center, Kiribati 

EFFECTIVE AND 

RESPONSIVE 

INSTITUTIONS 

GOAL - ECONOMIC GROWTH CENTER 

PRODUCTIVE 

PUBLIC 

SECTOR 

DEVELOPMENT OF THE 

ISLAND’S PRODUCTIVE 

SECTORS AND RESOURCES 

(natural resources, land, labour, 

capital and enterprise) 

POLICY REFORM 

AND STRATEGIC 

VISION 

ESSENTIAL BUILDING BLOCKS IN PLACE FOR DEVELOMENT 

Political stability, law and order, good governance, sound macro economy, inclusive social 

policies, fiscal and monetary stability, political commitment to achieving increased public and 

private sector performance and productivity, socio cultural support for private enterprise, 

environmental awareness and sound environmental management polices 


14 

GROWING 

PRIVATE 

SECTOR 

PRAGMATIC 

RULES AND 

REGULATIONS 

ASSESS BENEFITS OF 

ECONOMIC GROWTH 

CENTER – for example 

• reduced unemployment 

• increased revenue to GoK 

• equitable growth in incomes 

• access to land & tenure security 

• secure land & property rights 

• increased water supply - power 

• improved health facilities 

• regular availability of imported 

goods eg. rice, flour, cement 

• increase in private enterprises 

• access to finance and capital 

• regular shipping & air services 

• reliable telecommunications 

• increased access to education 

• proactive institutions marketing 

island economic development 

• implementation of investment 

plan for infrastructure - services


frequent shipping and air services, reliable telecommunications and the orderly 

provision of essential public infrastructure and services. 

The application of the concept of an economic growth center is new in Kiribati. 

Other models of development adopted by the GoK in previous attempts of outer 

island development such as that applied to Fanning and Washington Islands to the 

north of Kiritimati Island, have embraced all forms of development to improve 

people’s lifestyle. This includes providing health care, schools and more recently, 

systems of local government. The emphasis by the GoK has been on supporting a 

reasonable to high level of subsistence lifestyle and social development, 

notwithstanding recent unchecked increases in island populations. However, there 

has been no deliberate attempt to develop these islands as economic growth 

centers, developing the private sector supported by appropriate institutional, policy 

and regulatory reforms. 

2.4 Implementation Arrangements 

The Ministry of Finance and Economic Planning (MFEP) is the TA executing 

agency and the Ministry of Line and Phoenix Development (LINNIX) and the 

Ministry of Internal and Social Affairs (MISA) are the implementing agencies. 8 

LINNIX has provided counterpart support. Due to the lack of office space in the 

LINNIX building, consultants and the LINNIX counterpart have been based out of 

the offices of the Land Management Division (LMDK), Ministry of Environment, 

Lands and Agricultural Development (MELAD). 9 LINNIX has been the main 

coordinating agency in Kiritimati Island, organizing meetings, workshops and 

providing weekly direction and guidance via the Secretary and Minister for LINNIX. 

LMDK has generously provided access to email and phone. 

A seminar and workshop was held on Friday 21 October, 2005, with key local 

business people and private sector representatives as well as local and central 

government officials. 10 The aim of the seminar and workshop was to present the 

background to the TA, findings of the work undertaken to date and importantly, to 

gain feedback on issues, problems, constraints and opportunities to private and 

public sector development on Kiritimati Island. The invaluable results of this 

workshop and views of participants are included in the discussion in this report. 

8 

Note – MFEP and MISA are not represented in Kiritimati Island. They are located in Bairiki in Tarawa and will be 

briefed accordingly in Tarawa. 

9 

The former LINNIX building burnt down in quarter 1, 2004 and officers are now located in a variety of converted 

residential buildings in London. 

10 

The seminar workshop was held at the Te-Rawa-Ni-Bakoa lodge and was opened by the Minister for LINNIX, Hon. 

Tawita Temoku. 


15


3. Macro Economic Context – Kiribati 

3.1 Main Features of the Economy 

Any analysis of Kiritimati Island as a potential growth center must first understand 

the contextual setting in which national and island development including economic 

growth, takes place. By 2003, Kiribati had an estimated population of 

approximately 90,000 persons, the country comprising some 33 atolls stretching 

5,000 kilometres across the central western Pacific on the equator. The total land 

area of 730 square kilometres falls into three island groups - the Gilbert Group to 

the west, the Phoenix Group in the centre and the Line Islands including Kiritimati 

island to the east (south of Hawaii). The country area covers some 3.5 million 

square kilometres in area, primarily water dotted by atolls. 

In the period 2000 to 2004, the performance of the Kiribati economy was modest. 11 

Economic growth averaged around 1.4% during the period 2000 to 2002 and 

increased to 2.5% in 2003 due to activity associated with the national elections and 

some large construction projects. However, growth slowed to around 1.8% in 2004. 

The modest performance was attributed to the impact of external factors also 

affecting other Pacific Island nations - such as falling financial markets and the 

economic downturn associated with the war in Iraq and the uncertainty of 

international terrorism - and factors specific to Kiribati, such as a climate-related 

drop in fishing activity, variability in copra prices, the lack of private investment in 

production of goods and services and the inefficient operation of some public 

enterprises (SOEs) which operate in almost every sector. 

Progress was made on upgrading social services and infrastructure in South 

Tarawa, the national capital and outer islands, notwithstanding domestic economic 

activity continued to depend on Government expenditures, with a substantial 

proportion financed by foreign aid. 

Development prospects in Kiribati are constrained by the growing population and 

the fixed amount of domestic resources and limited sector potential upon which to 

plan for sustained growth. During 2000-2003 (note 2000 was the last Census), 

national population increased from 83,500 persons to about 90,000 persons, with 

two thirds of that increase occurring in South Tarawa where approximately half the 

national population lives and the remainder in Kiritimati Island, the largest atoll in 

Kiribati (and the world) and fastest growing island in Kiribati. 

The 2000 Census indicates some 9,200 persons working in the cash economy. 

Some 2 out of every 3 employed persons work in the public sector and 2 out of 

every 3 of these are in South Tarawa. Some 2,000 people leave school each year 

although only 500 jobs become available for take-up. The population is 

11 

Source: GoK National Development Strategies, 2004-2007. Ministry of Finance and Economic Development, Bairiki, 

Tarawa. 


16


increasingly younger, with 41% of the national population less than 20 years old. 

This trend will ensure continued pressure for school education and places in 

schools as well as for jobs and employment. Unchecked increasing population and 

land pressure on South Tarawa will mean both South Tarawa and now Kiritimati 

Island, will be the major centers of urban growth. The latter raises major economic, 

social and environmental implications for achieving sustainable growth. 

The monetary economy of Kiribati is dominated by the services sector, 

representing a GDP share of over 80%, and the public sector which provides 4 out 

of very 5 dollars of pay. The main export products are marine products such as 

seaweed and pet fish export, but contribution of exports to GDP is only equivalent 

to 10-20% share. Value added domestic economic activity comprises processing 

of copra and seaweed, small scale clothing and food production, construction and 

mechanical and small ship and canoe repair. Large Government activities (port 

development, schools, water supply) and externally funded private sector projects 

for churches and schools (such as the Mormon Church) have boosted construction 

activity. Tourist-related activities are prevalent in the Line Islands such as in 

Fanning and Kiritimati Islands, with all other economic activity focused primarily in 

South Tarawa. 

Changes in national income result from earnings sourced from overseas rather 

than domestic production of goods and services. Investment earnings from the 

GoK reserve fund (Revenue Equalisation Reserve Fund - RERF), EEZ fishing 

access fees and other resource rents, and remittances from seamen all underpin 

current levels of public and private disposable income. Gross national product 

(GNP) which includes foreign income is a more practical indicator of the current 

economic condition than gross domestic product (GDP) which includes only 

income from domestic production. GNP (in current market prices) fell during the 

2002-2004 period due to increased expenditure from the RERF and a decline in 

EEZ access fees, notably fishing licence fees; GDP (in current market prices) also 

declined during this period. Over this period, both GNP per head and GDP per 

head fell. 

Concurrent with foreign earnings, development aid from foreign governments and 

development banks plays a major role in the social and economic development of 

Kiribati. In the period 2000 - 2002, grants and loans from abroad totalled $105 

million, equivalent to approximately 30% of the annual GoK budget expenditure, 

equal to one third of GDP. GNP in 2003 was estimated to have been approximately 

$175 million and GDP approximately $98 million, the difference of $77 million being 

income from overseas. Despite the volatility of GNP and GDP during the 2002- 

2004, the Kiribati economy retains resilience due to the Government savings in the 

RERF. At end-2003, this had a value of approximately $513 million. 


17


3.2 Kiribati - Recent Economic Performance- 2004 

Modest economic growth of around 1.8% in 2004 was backed by high copra prices 

and reasonable fish exports. Although GNP per head and GDP per head (in 

current market prices) increased in 2004, both are still below their 2001 levels. 

Kiribati is in a difficult economic situation, as now it has a large fiscal deficit of 

about 40% of GDP, compared to an average of about 7% over the period 2000- 

2002. Although official reserves (mainly RERF) are substantial in terms of import 

cover, drawdowns to fund continued large budget deficits would mean that the 

Fund’s real per capita value could not be maintained and that the Fund would be 

ultimately depleted. 

The GoK faces the challenge of rekindling economic growth and restoring fiscal 

policy to where the real per capita value of the Fund is maintained. 

3.3 Kiribati - Prospects for 2005-2007 

Prospects for sustainable economic growth are hampered by overdependence on 

the Government and on inefficient public enterprises and by lack of private sector 

development. Continued population growth at current growth rates (close to 2% 

per year) will continue to put pressure on limited resources and increase demand 

for jobs and public services including education and health. 

There are few signs that these factors can be improved immediately, given 

Kiribati’s remoteness from world markets, small size and dispersed geography. A 

low GDP growth of 1.5% per year is expected in 2005 and 2006. This projected 

growth rate is below the current rate of population growth and means that per 

capita GDP will continue to decline and increasing youth unemployment is likely 

with the growing labour force. 

Policies for private sector development, as formulated in the NDS 2004-2007, need 

to be implemented for people to move away from overdependence on 

Government-led projects and economic activities. New employment, especially for 

the younger generation, and new investment opportunities are badly needed. 

Improving the business environment for the private sector, both foreign and 

domestic, particularly in sectors such as tourism and marine resources, should be 

done by reducing the constraints to business development. A decision by GoK to 

position Kiritimati Island as an economic growth center or not, as outlined in the 

NDS, 2004-2007, will be a major decision during this period. 


18


4. The Existing Planning and Development Framework for Kiritimati 

Island 

4.1 National Development Strategies (NDS), 2004-2007 

The Government of Kiribati National Development Strategies (NDS), 2004-2007, is 

the overarching planning framework which guides Government decision-making 

and budget preparation over the 2004-2007 plan period. The NDS is entitled 

‘Enhancing Growth and Ensuring Equitable Distribution’ and provides the strategic 

planning framework and overall directions by which detailed operational plans are 

to be prepared by Ministries and public enterprise. The vision that drives the NDS 

is to ensure the equitable distribution of development benefits to I-Kiribati based on 

principles of good governance. Achieving this vision will come from a collaboration 

of efforts facilitated by: 

• partnership of public and private investment in infrastructure and production; 

• equitable distribution of services and economic opportunity; 

• improved efficiency in the public service; 

• equipping the I-Kiribati to manage social and economic change as 

individuals, communities and as a nation; 

• utilizing natural resources and physical assets sustainably; and 

• preserving financial reserves while using them to finance development. 

The NDS has established a set of key priority areas supported by strategies, 

policies and activities. The key priority areas for development in Kiribati are: 

• economic growth; 

• equitable distribution; 

• public sector performance; 

• equipping people to manage change; 

• sustainable use of physical resources; and 

• protecting and using financial resources. 

The NDS identifies key policy areas on major cross sectoral and sectoral issues, 

with strategies, activities and Ministry responsibility matched against each key 

policy area. These strategies and activities are to be used by line Ministries to 

develop their Ministry Operating Plans (MOP), which is the comprehensive 

statement of a Ministry’s responsibilities and access to resources. The MOP 

describes the activity programmes and targeted outputs of the Ministry in the same 

form as the Budget. Those key policy areas within the NDS with major relevance 


19


to the economic, social and environmental planning and development of Kiritimati 

Island are summarised in Table 4.1. The NDS makes specific mention of the need 

to undertake the feasibility of growth centers in the Line and Phoenix Islands such 

as in Kiritimati Island. Any review of Kiritimati Island as a potential growth center 

must contribute in some form or other to achievement of the NDS generally and 

importantly, resolution of the specific key policy areas outlined below. 

Table 4.1: NDS - Key Policy Areas relevant to Planning and Development of Kiritimati Island 

Key Policy Area Main Issues Key NDS Strategies 

1. Economic * growth of population * design population policy to achieve 

growth 

restricts 

head 

income per stability by 2020-2025 

* commercial 

investment needed in 

marine and tourism 

resources 

* seek partners in Captain Cook hotel 

* publicly funded * feasibility studies of potential growth centers 

investment in transport 

& utility infrastructure 

in Line and Phoenix 

* initiatives to promote * complete new regulatory framework and 

small business and 

encourage foreign 

investment 

expand small industry workshop scheme 

2. Equitable * infrastructure services * strengthen outer island governance 

distribution and incomes on outer * devise strategy for maintenance of water, 

islands inferior to those roads etc 

in urban area 

* upgrade telecom 

* apply efficiency standards to inter island 

shipping 

* identify other options for income earning 

opportunities 

* dealing in land is 

leading to emergence 

of landlessness 

* undertake review of private land dealings 

3. Public Sector * incentives to be more * create competitive environs with 

Performance efficient are lacking in monitoring standards etc 

public sector 

* modernize public service regulations 

4. Equipping 

people to 

manage change 

* post school 

livelihoods may involve 

formal, informal and 

self employment 

* threat to public health 

from unsafe urban 

sanitation systems & 

unsanitary practices in 

densely populated 

areas 

* ensure school curriculum prepare 

students for both formal and informal 

employment; manage tertiary institutions to 

keep pace with type of jobs available; 

extend TTI to outer islands; strengthen 

scholarships 

* strengthen public health education 

services to educate households; improve 

enforcement of Environment Act 


20


Key Policy Area Main Issues Key NDS Strategies 

5. Sustainable 

use of resources 

6. Protection and 

use of financial 

resources 

4.2 Population 

* strengthening public 

accountability of 

government without 

weakening the 

authority of 

Government 

* local government is 

not a able to perform 

the tasks expected of it 

by national policies and 

legislation 

* potential social and 

economic impact of 

climate change is 

costly and dangerous 

* responsibilities for 

policies and actions 

affecting the 

environment are 

fragmented 

* urban local 

governments lack 

capacity and motivation 

to perform required 

tasks 

* develop and enforce 

sustainable land use 

schemes in the social 

contexts of Kiritimati 

and Tarawa 

* make greater use of 

domestic credit in 

financing development 

while protecting 

financial stability 

* continue public access to information 

* develop leadership code 

* strengthen capability of public accounts 

to examine audit reports and call officers to 

account effectively 

* in Line and Phoenix Islands, establish 

development administration with local 

representation and accountability for 

economic, social and physical planning 

* identify participatory strategies to 

manage increasing risk through adaptation 

measures 

* confirm MELAD as responsible Ministry 

for coordination and legislation 

* overhaul structures and financing of 

urban local governments for more effective 

governance and development activities 

* undertake consultation and gain public 

support for regulating land use in areas 

under population pressure 

* introduce pilot schemes and public support 

* increase funding of Village Banks 

* promote use of commercial loans for 

financially viable infrastructure projects 

Permanent population commenced on Kiritimati Island in 1882, six years before the 

atoll was formally annexed to Great Britain from the jurisdiction of the United 

States. During the 1900’s, development was limited to developing the existing 

coconut plantations and accommodating copra cutters. During the Second World 

War, Kiritimati Island was used as a base for the Allied Pacific Air Command. In 

1957, the British military used Kiritimati Island to conduct nuclear bombing tests, 

subsequently followed by US military bomb testing. By 1962, all testing had been 

completed and by 1964, the extensive military presence had ended. In 1979, the 

British Government as part of the independence agreement gave Kiritimati Island 

to the newly formed Republic of Kiribati. Government policy restricted entry to 

Kiritimati Island through a permit system until late 1994 when Government decided 


21


to focus on the Line Islands comprising Kiritimati, Tabuaeran (Fanning) and 

Teraina (Washington) Islands as growth islands for the increasingly overcrowded 

islands to the west such as South Tarawa. 

The 2000 Census population for Kiribati was 84,484 persons of which Kiritimati 

Island contained 3,431 persons, representing 3% of the national population total. 

The 2000 Census population for Kiritimati Island was an increase of 6.4% on the 

1995 Census population of 3,225 persons (see Table 4.2). 

Table 4.2: Population of Kiritimati Island, 1968-2000 

Year 1968 1973 1978 1985 1990 1995 2000 

Population 367 674 1265 1737 2537 3225 3431 

Intercensal 

% increase 

per year 

- 12.16% 12.59% 4.95% 6.89% 4.80% 1.24% 

Source: 2000 Census Report on Population 

Based on Ministry of Health annual household survey data, Fanning is the fastest 

growing island since 2000 with Kiritimati Island showing some levelling of 

population between 2002 and 2004. Table 4.3 suggests some movement from 

Kiritimati to Fanning and vice versa, possibly related to the potential income being 

derived from the cruise ship arrivals in Fanning Island. 

Table 4.3: Population of the Line Islands, 2000-2004 

Island 2000 2001 2002 2003 2004 

Kiritimati 4227 4281 4806 4303 4400 

Fanning 1703 - 2328 2634 2539 

Washington 1129 - 1683 972 1054 

Source: Department of Health, London, June, 2005 

The majority of the population lives within the London - Tabwakea corridor and the 

village of Tennessee in between. These villages accounted for 72% of the 

Kiritimati Island population in 2004. Tabwakea is the largest village in Kiritimati 

Island followed by London (see Table 4.4). 

Table 4.4: Population by Village, Kiritimati Island, 2002-2004 

Village 2000 Census 2002 2003 2004 

London - Moumou 1465 1724 1517 1378 

Tabwakea 976 1719 1744 1880 

Banana – Main Camp 707 1117 782 861 

Poland 283 244 260 281 

Total Kiritimati 3431 4806 4303 4400 

Source: Department of Health, London, June, 2005, and Census of Population 2000 


22


Until the next national census is completed in late 2005 and data is compiled and 

analysed in the first half 2006, the reliability of the population estimates since 2000 

is questioned given: 

• the Ministry of Health household survey data indicates a modest 2004 

population of 4,400 persons; 

• the NDS, 2004-2007, cites a mid 2002 population of Kiritimati Island as 

being approximately 5,000 persons; and 

• the AusAID Kiritimati Water and Sanitation Project (KWASP), 1977-2003, 

indicated a mid 2002 population of Kiritimati Island as 5,501 persons. 

The latter two population estimates are hard to justify given the 2000 Census 

population for Kiritimati Island was 3,431 persons. Until the draft results of the 

current 2005 Census being undertaken are available mid 2006, discussion with the 

Ministry of Health and MELAD indicate a current end 2005 estimated population for 

Kiritimati Island of approximately 5,500 persons. This is an increase of 61% on the 

2000 Census population. A visual inspection of villages does not indicate a 

population greater than 5,500 - 6,000 persons. Estimates of future population for 

Kiritimati Island by the South Pacific Commission (SPC) using 2000 Census data 

indicate a population of 20,000 persons in Kiritimati Island by 2025. 12 This is an 

increase of approximately 14 - 15,000 persons over the next 20 years. The 

population of Kiribati is estimated to be approximately 140-150,000 persons by this 

time. 

4.3 Environment 

Kiritimati Island has a delicate environment - a function of its isolation, size and 

atoll characteristics that have resulted in a diverse ecosystem endowed with 

extensive biophysical resources. At the same time, Kiritimati Island relies heavily 

on exploitation of these resources for its economic and socio-cultural well-being. 

This includes copra production, water extraction from the underlying lens and 

exploitation of marine resources. As the population grows, this will continue to lead 

to increasing tension between the need for exploitation of these resources to 

satisfy the drive for economic development, versus the need to protect the 

environment upon which economic growth depends. 

Kiritimati Island is located within the equatorial dry zone that characterises the 

central and eastern parts of the Pacific. Climate is subject to long dry periods 

separated by extended rainfall periods associated with El Nino. The average 

rainfall is 946mm, with a high annual peak of 3686mm to a low of 177mm. 13 

Climate is uniform with a diurnal variation between 24 and 30 degrees Celsius. 

Kiritimati Island is unique in its biophysical setting. The bird life is of international 

12 

NDS, 2004-2007 

13 

Source: Kiritimati Water Supply and Sanitation Project – Republic of Kiribati. Assessment of Sustainable Yield of 

Freshwater Lenses. Douglas Partners. January, 2000. Prepared for the KWASP project. 


23


significance, with the highest species diversity and largest number of breeding sea 

birds on any island in the world. There are over 18 seabird species belonging to 3 

different orders of birds. The island also serves as a migratory stop for birds that 

migrate from the Line Islands to Alaska. In total, the island has nine designated 

areas where laws protect species and access is limited. This includes Cook Islet, 

Motu-Upua, Motu-Tabu, Dojin, Toyota and Mouakena. Fish are highly important, 

both as a food source and commercially for sport fishing and export. The Paris 

Flats is a major spawning area for bonefish and there are proposals to have it 

designated as a ‘marine park’ to reduce the excessive fishing. Four marine parks 

have already been designated within the extensive Kiritimati Island lagoon system. 

There is much potential for eco tourism activities if communications including air 

transport is significantly improved. 

With population growth, the environment of Kiritimati Island is increasingly under 

threat from village and related development activities. The rising population 

especially in the London - Tabwakea corridor as well as Banana, has resulted in 

increasing competition for the use of natural resources including land for housing, 

businesses, churches and maneaba’s as well for sand and gravel, water, fish and 

coconuts. The edges of the villages continue to expand including intrusion into 

low-lying areas susceptible to flooding. In Banana village, a decision has already 

been made by Government to relocate Banana due to the impact of adverse village 

activities on the underlying water lens needed for public water supplies. Domestic 

and feral cats and rats threaten the bird population both within the villages and the 

bush. 

Management and safe sustainable supply of the water resource on Kiritimati Island 

are fundamental to the future development of the villages and the island as a whole 

(see discussion on water supply in Section 4.6.2). There is no surface water so 

groundwater is limited to freshwater which floats on the salt water that permeates 

the islands calcium based surface. The protection of the environment in order to 

safeguard the water lens, maximise sustainable water resources and promote the 

health of the ecosystem generally, means it will be necessary to have the major 

groundwater reserves outside of existing and planned villages free of settlements 

and polluting activities. The promotion of economic development concurrent with 

rapid increases in population reinforces the paramount need for good 

environmental planning and land management to underpin the future development 

of Kiritimati Island. 

4.4 Land Supply and Development 

Kiritimati Island has a land area of 387.9 square kilometres, approximately half the 

land area of Kiribati. 14 Approximately one third of the island is salt flats and 

subject to tidal inundation and thus is uninhabitable for human occupation. There 

are five main villages that have been developed - London, Tabwakea, Main Camp, 

Banana on the northern peninsula and Poland on the southern peninsula. 

14 

Source: Report on 2000 Census of Population, Government of Kiribati 


24


Tennessee village is located between London and Tabwakea and is part of the 

wider London-Tabwakea growth corridor. There are no settlements on the 

expansive south-eastern portion of the island. 

The main development activities of the island including population growth, housing, 

social and economic activities are focused in London–Tabwakea corridor. London 

is the main Government administrative center and with Banana, forms the main 

locations for government housing. Main Camp consists of the Captain Cook Hotel 

and associated government housing while Poland consists of a school, a clinic, 35 

government houses, churches and maneaba’s. Due to the location of the existing 

Banana village and the impact of human and animal activities on the adjoining 

water lens, Government agreed in 2001 that the village be voluntarily relocated to a 

new site north west of Main Camp. Some church buildings have commenced 

construction on the new Banana site. With the exception of 135 half acre lots 

released at Tabwakea village, Stages 1, 2 and 3, which were given to tenants as 

freehold by Government in 1992 and 2003, all lands on Kiritimati Island are state 

owned land as there are no traditional landowners. 

The resettlement policy of the former Governments has been the main driver for 

the development on Fanning and Washington Islands. On Kiritimati Island, there 

has been no formal resettlement program in place. Formal resettlement of 

population to Fanning and Washington Islands has occurred from the Gilbert 

Group at intervals of approximately 3-4 years, the last organised resettlement of 

people being in 2001. Residents accepted under Government resettlement 

programs received free passage and in Fanning and Washington Islands, were 

allocated land plots that had to be purchased from Government. The size of the 

residential plots allocated in Fanning and Washington was 1 acre, sufficient to 

support subsistence living. Government has also provided basic island 

infrastructure including health clinics, schools, island councils and port facilities. 15 

Notwithstanding the formal resettlement program which operates from time to time, 

residents continue to arrive at Fanning, Washington as well as Kiritimati Islands on 

their own initiative, knowing their ability to secure land tenure is uncertain. 

On Kiritimati Island, development has been encouraged on the basis that it was for 

the establishment of business purposes only. Land was not to be allocated solely 

for residential use, with the exception being land given to the former copra cutters 

and their families in Tabwakea. This included a final ‘one off’ release of 20 leases 

for residential use at Tabwakea in early 2003. 16 The size of a plot allocated for a 

business lease has been a quarter of an acre maximum while unlike Fanning and 

Washington Islands, plots allocated for residential development at Tabwakea have 

been half an acre. Generally, the resettlement program to date has been 

characterized by (i) a lack of an orderly land supply program on an annual basis, 

(ii) an absence of a strategic plan addressing the integrated needs of the three 

15 

The exception for local government has been Kiritimati as it has only been established since June, 2004. 

16 

These plots were given to those copra cutters who complained they had not been included in the earlier Tabwakea 

freehold releases. They existed on their lands under interim occupation agreements. 


25


islands in the Line Group which indicates the number of plots to be provided, their 

timing and the level of infrastructure needed, and (iii) no effective system to ensure 

security of land tenure, whether arriving under Government resettlement schemes 

or under their own family means. 

Prior to the agreement by Government to a new system in June, 2005, an 

application for a business lease needed to be made to the Government to secure a 

change in land tenure from State lands to lease hold, or to freehold as has been 

the case in limited circumstances on Kiritimati Island. The body responsible for the 

land planning and development process is the KLLPB who assesses both the landplanning 

permit and the lease application in the same process. Using the same 

application form, the KLLPB considered planning and business lease applications, 

with all applicants required to submit a business plan for the proposed commercial 

operation. In the absence of land not being made available for residential leasing, 

the majority of the applicants since the late 1990’s have been submitting business 

applications, notwithstanding their intended use is for housing. 

Of the existing business leases approved, LMDK estimate that less than 50% are 

used for their approved business purposes, the remainder being for used for 

housing, other non-approved purposes and subleasing. As a consequence of the 

inability of residents to secure land tenure, squatters, overcrowded households and 

plots exist on Kiritimati Island. The latter includes Government housing and 

freehold and leasehold plots. In late 2002 and 2003, the KLLPB as the ‘island 

planner’ issued eviction notices to remove illegal occupants including those outside 

the villages living in the bush. However, the then Cabinet ordered LMDK to advise 

the KLLPB to suspend the issue of eviction notices to squatters. 

The number of planning applications submitted to the KLLPB is summarised in 

Table 4.5. 

Table 4.5: KLLPB Planning and Lease Applications by Village, Kiritimati Island, 1988-2003 

Year London Tabwakea Banana/Poland Total 

1988 3 2 2 7 

1989 - - 2 2 

1990 2 - - 2 

1991 - - - - 

1992 1 - - 1 

1993 9 1 5 15 

1994 5 2 3 10 

1995 20 3 13 36 

1996 48 6 18 72 

1997 15 2 4 21 

1998 66 9 66 141 

1999 17 5 6 28 

2000 38 2 2 42 

2001 5 1 3 9 

2002 12 6 2 20 

2003 2 1 1 4 

Total: 243 39 127 409 


26


Source: LAPLIS, LMDK, 2005 

The majority of planning applications have been for London followed by Banana 

and Tabwakea. The number of applications submitted to the KLLPB peaked in the 

late 1990’s and has declined since that time. Potential applicants have been 

advised since late 2003 that planning and lease applications will not be considered 

until Cabinet in Tarawa deals with the agreement to implement a new land 

management system. This new system was agreed in June, 2005, as part of the 

30 plot release program, with first plots expected to be released in quarter 1, 2006. 

4.5 Housing 

Housing is primarily contained in the four main village areas, namely, the London- 

Tabwakea corridor, Banana, Main Camp and Poland. Since the late 1990’s, there 

has been an increasing number of both squatters and approved houses being 

permitted outside the designated village areas. Housing varies in quality from 

permanent to local village housing and all forms of combinations in between. 

Construction materials include coconut trees, thatching and locally manufactured 

grey blocks as well as the use of imported materials primarily masonite and 

corrugated iron sheeting. 

The number of houses, type and village location on Kiritimati Island is shown in 

Table 4.6. 

Table 4.6: Housing Type, Number and Location, Kiritimati Island, 2002 

Housing Type London Tennessee Tabwakea Main 

Camp 

Banana 

Total 


27 

Poland 

Business 

lease 

45 23 7 15 9 - 99 

Freehold - - 154 - - - 154 

Government 166 7 1 12 81 34 301 

Abamwakoro 1 - - - - - 1 

KPA 4 - - - - - 4 

JSS - 10 - - - - 10 

KWASP 1 - - - - - 1 

KOIL 4 - - - - - 4 

Hope-X 2 - - - - - 2 

KMC 1 - - - - - 1 

Air Kiribati - - - - 2 - 2 

Captain Cook 

Hotel 

- - - 1 - - 1 

Agriculture - - - 2 - - 2 

Squatters 4 - 1 7 17 1 30 

BKL 1 - - - - - 1 

Total 248 40 163 37 109 35 613 

Source; KWASP Reports, 2002 – LMDK, 2004 

Seven main housing types can be identified on Kiritimati Island, namely: 

• Government housing for government employees;


• Government housing for government owned companies such as KOIL and 

KPA; 

• Government houses to accommodate affiliated government bodies such as 

the Kiribati Maintenance Corporation; 

• housing for special projects such as for KWASP or the British funded Clean 

Up Kiritimati Island Project; 

• housing on freehold land in Tabwakea; 

• housing constructed as part of the approved business lease; and 

• squatter housing. 

There was a total of 609 houses in 2003, assuming one house per business lease, 

with approximately 75% of housing located between London and Tabwakea. The 

majority of squatters are located in Banana, with LMDK noting squatter numbers 

have increased during the last 2 years. Existing Government housing in London is 

of varying quality, with most of the former copra cutters housing subject to termites 

and major disrepair. There is a large demand for Government housing resulting in 

a major backlog of housing that awaits Government or external funding. 

The 2000 Census indicates the household size in Kiritimati Island was 7.5 persons 

per household compared to 6.9 for the Line and Phoenix Group overall and 8.7 for 

the Gilbert Group. In 2002, KWASP indicated the household size on Kiritimati 

Island was 9 persons per household. The increased household size on Kiritimati 

Island compared to the remainder of the Line and Phoenix Group, may reflect the 

strictness of the current leasehold system resulting in the inability of the population 

to secure title to land tenure. 

4.6 Infrastructure and Service Provision 

4.6.1 Roads. A major legacy of the British and American military occupation of 

Kiritimati Island was the construction and sealing of the main road, the A1, which 

runs from London to Southeast Point, as well as minor roads in Main Camp. This 

provides ready access to the main villages including Main Camp, Banana as well 

Cassidy Airport. At Main Camp, there is also a network of sealed local roads that 

could be used in the extension of the village. Roads within the villages, namely, 

London, Tabwakea and Banana are unsealed as is the Carver Way, which 

connects the northern coast road to Poland in the southwest. The unsealed A2 

road parallels the edge of the lagoon, from Tabwakea to Banana. The main 

A1road has been subject to maintenance as part of the HOPE-X project. The 

proposal by HOPE-X to seal the Carver Way as part of the project infrastructure 

requirements is unlikely to proceed. 


28


4.6.2 Water. The 2000 Census indicates households on Kiritimati Island use a 

combination of water sources including rainwater (48%), piped water (36%) and 

wells both open and protected (68%). The main source of piped water comes from 

the groundwater ‘lenses’ of potable water that float on the heavier saltwater. There 

are four major freshwater lenses in Kiritimati Island, namely: 

• Decca 

• Four Wells 

• Banana 

• New Zealand Airfield 

There are a number of minor lenses including North West Point, Nei Naomi, Boran 

village and the Boran to Paris flats. The four major lenses are between 900 metres 

and 1800 metres wide and are elongated parallel to the coastline. Village piped 

water is current sourced from three main lenses – Decca (locally termed ‘Acres’ 

lens) and Four Wells serving London and Tabwakea, and Banana serving the 

current Banana village and Main Camp. The extensive Banana lens is intended to 

serve an expanded Main Camp and the New Banana village. 

The KWASP project, 1977-2003, constructed major water supply infrastructure 

including major augmentation of galleries to serve Tabwakea, London, Banana, 

Main Camp and Poland villages, plus associated header tanks, pumps and a new 

main supply line to service Tabwakea and London. The main lens of Decca and 

Four Wells are being used at 31% and 30% of their sustainable capacity while 

Banana and Poland are being used at 28% and 6% respectively. Table 4.7 gives 

the Kiritimati Island population and household plot projections based on the 

capacity of the (i) existing water galleries to provide a sustainable water supply to 

the key villages and (ii) maximum sustainable capacity of the key water lens. 

Estimates are based on a consumption rate of 50 litres per person per day, a rate 

KWASP and Government assumed as sufficient for drinking, cooking and washing 

purposes. The Table indicates that if the water supply infrastructure is augmented 

and assuming proper water resources management, the island could support a 

maximum population of approximately 35,000 plus persons based on estimates of 

the sustainable capacity of the lenses. Increased water usage from non-residential 

uses such as industry and business will reduce this population capacity. 

4.6.3 Port Jetty and Airfield. The KPA port at Moumou north of Tennessee was 

opened in 2002 to allow larger ships to berth on Kiritimati Island. However, the 

size of the wharf and lack of landing facilities constrains small to medium freight 

vessels. It also prohibits cruise ships stopping at Kiritimati Island. The area 

around the jetty and wharf areas has been designated for future port and 

commercial use. Cassidy Airport adjoining Banana is located on the Banana water 

lens. 


29

Kiritimati 

Island Village 

London 

Tabwakea 

Banana 

Main 

Camp 


Table 4.7: Population and Household Plot Projections based on Sustainable Yield of Water Lenses, Kiritimati Island 

Existing 

population 

estimate 2004 

(1) 

3,258 

861 

Current 

pumping rate 

(m3/day) of 

main 

galleries/ lens 

(7) 

100 - Decca 

120 – Four 

Wells 

155 – 

Banana 

Maximum 

population 

sustained by 

existing 

gallery/lens 

(2) 

4,400 

3,100 


30 

Used 

sustainable 

capacity of 

lenses 

(% m3/day) 

(7) 

31% (Decca) 

and 30% 

(Four Wells) 

28% 

Banana 

Additional 

capacity 

(persons) 

based on 

existing 

galleries and 

pump rates 

(3) 

1,142 

2,239 

(New 

Banana Main 

Camp) 

519 

Maximum 

additional 

household 

plots using 

existing 

galleries (4) 

Maximum 

sustainable 


lenses 

(m3/day) 

(7) 

Total 

population that 

could be 

supported by 

lens 

(5) 

Total Plots 

serviceable by 

sustainable 


lens 

(6) 

152 

327 (Decca) 

and 400 

(Four Wells) 

14,540 1,939 

299 555 11,100 1,480 

Poland 281 40 - Poland 800 

6% 

Poland 

69 710 14,200 1,893 

Total 4400 415m3/day 8,300 24% 3,900 1,142 1,992m3/day 39,840 5,312 

Source: Table adapted from ADB TA. No 4257 – Improving Land Use Management in Kiritimati Island. TA Final report, Volume 1, May, 2005 

(1) Based on Ministry of Health Population survey, first quarter, 2004 

(2) Population estimate based on pumping rate multiplied by 1,000 litres divided by 50 litres per person (per day water consumption) 

(3) Column 4 minus column 2 

(4) Additional capacity (persons) divided by the 2000 Census household size of 7.5 persons per household on Kiritimati Island. If water is provided for nonresidential 

development such as business or tourism development, the number of overall household plots will decrease. 

(5) Population estimate based on pumping rate multiplied by 1,000 litres divided by 50 litres per persons. 

(6) Total population divided by the household size of 7.5 persons per household in Kiritimati Island (2000 Census of Population) 

(7) Sourced from Douglas Partners ‘Report on Kiritimati Water Supply and Sanitation Project, Republic of Kiribati– Assessment of the Sustainable Yield of the 

Freshwater Lenses’. (January 2000)


4.6.4 Waste Management. There are four formalised waste disposal sites on 

Kiritimati Island managed by the Public Works/Civil Engineering section of LINNIX. 

These are: 

• the waste management site located south west of Main Camp serving 

Banana and Main Camp; 

• the waste disposal site east of Tabwakea village serving London, 

Tennessee and Tabwakea; 

• the medical and hospital waste disposal site approximately 2 kilometres 

from Cassidy Airport; and 

• the waste disposal site at Poland. 

The waste disposal sites have a capacity in the order of 600m3 and an expected 

lifespan of 3-4 years. A Code of Practice was developed under KWASP and some 

onsite standards including rubbish containment have been implemented on some 

waste disposal sites. Waste collection remains a problem, as street reserves are 

littered with non-biodegradable waste such as cans, plastics and bottles. 

4.6.5 Sanitation. There is no centralised reticulation and waste treatment system 

in any of the villages on Kiritimati Island. Sanitation is predominantly by septic 

tanks, 17 compost toilets introduced as part of KWASP, and bush and beach 

defecation. The 2000 Census indicated the main form of household sanitation was 

a toilet (51%), latrine (24%), beach (31%), and compost toilet (11%). 18 There are 

many continuing issues with septic tanks including lack of maintenance and 

leakages into the groundwater. Under the KWASP, 153 compost toilets were 

constructed in all the main villages, the majority in Tabwakea. Their location is 

shown in Table 4.8. 

Table 4.8: Location of Compost Toilets by Village, Kiritimati Island 

Village Location Number of Compost Toilets 

London 28 

Tennessee 18 

Tabwakea 65 

Main Camp 3 

Banana 21 

Poland 18 

Total: 153 

Source: Civil Engineering, LINNIX, 2005 

Compost toilets need regular maintenance such as deposition of dry leaves to 

reduce odour and sustain the composting process. Local construction materials, 

such as thatching, used as sidewalls are now in need of replacement in many 

toilets. Their long-term viability is primarily a socio cultural issue. Like many 

growing villages and towns in an atoll setting, sanitation is problematic. 

17 

Septic tanks are still the preferred means of waste removal for Government housing. 

18 

Note: Some households use more than form of sanitation system. 


31


4.6.6 Power Generation. Due to the distances between villages, electricity is 

provided to each village by separate diesel generators. There is no central power 

service. Due to the smallness of the villages, powerhouses tend to be centrally 

located and generally are major noise producers. Two systems operate in 

Kiritimati Island - 110 v (in Captain Cook Hotel and Main Camp) and 240v in the 

remaining villages. Powerhouse consumption is reaching capacity in nearly all 5 

generators. The powerhouse supplying the Captain Cook Hotel and associated 

government houses in Main Camp is also at capacity. Intermittent breakdowns are 

still common primarily due to fuel shortages, mechanical breakdowns or damage to 

underground cables. The London - Tennessee corridor to North Tabwakea 

requires a centralised power supply system, rather than the current system of 

stand alone village generators. 

4.6.7 Schools and Medical facilities. There are a total of 6 schools on Kiritimati 

Island, these being: 

• 3 primary schools in Tennessee, Banana and Poland (classes 1 to 6); 

• 1 Junior Secondary Schools (JSS) covering form 1 to 3; and 

• 2 church secondary schools, namely, Saint Francis and the Kiribati 

Protestant schools. 

All schools are located within or close to the existing villages. The high number of 

youth in the population has meant that schools, especially those in Tennessee and 

Banana are near total capacity. There is no tertiary or post secondary facility on 

the island although there is a demand for one from both ex students and 

Government and private sector employees who all seek extra training in basic 

computer, technical and other work place skills. 

In terms of medical support, there is one hospital located in London and three 

health clinics administered by nurses, namely, Tabwakea, Banana and Poland. 

There are currently 10 nurses and 1 doctor on the island. 

4.7 Current Institutional and Governance Setting 

Prior to the warrant establishing the KUC in April, 2004, the institutional structure 

for island development comprised LINNIX as the main administrative authority for 

Kiritimati, Fanning, Washington and Canton Islands, plus an array of different 

government and non-government authorities such as MELAD, Health, Commerce 

and Tourism, KOIL and Agriculture. 

The role of LINNIX is based on the objective of LINNIX being an overarching 

coordinator for island development, working towards integration and minimizing 

fragmentation amongst individual ministries in their development efforts in the Line 


32


and Phoenix Islands. These responsibilities include facilitating economic 

development with the MCIC, MTCT and land management with LMDK. LINNIX 

coordinates a Line and Phoenix Developing Coordinating Committee (LPDCC), 

consisting of representatives of all major ministries and statutory bodies on 

Kiritimati Island, with the responsibility of coordinating all proposed development 

projects. The LPDCC meets on an ‘as needs basis’ and has no statutory basis. 

At the Kiritimati Island level, LINNIX has traditionally played the role of a central 

and local service provider by coordinating other central government agencies such 

as Public Works, 19 Health and LMD to provide services such as: 

• garbage collection; 

• waste disposal – septic pump out; 

• road maintenance both sealed and unsealed roads such as the A1 and A2; 

• health; 

• water supply; 

• Government buildings such as Government housing; 

• electricity; 

• building and engineering; and 

• land use planning. 

Table 4.9 indicates the main island functions by Government organisation. 

Table 4.9: Island Function by Main Government Agency, Kiritimati Island 

Function Government Agency 

1. Overall island coordination LINNIX 

2. Economic development MCIC, Finance/Economic Planning 

3. Land use planning LMDK/KLLPB/Environment, MELAD 

4. Land administration/registration LMDK, MELAD 

5. Land development works PWD, Civil Engineering 

6. Building control PWD, Construction Division 

7. Water supply PWD, Water Engineering 

8. Electricity Electrical Division 

9. Roads and drainage PWD, Civil Engineering 

10. Health Ministry of Health 

11. Agriculture MELAD 

12.Wharves and jetties Kiribati Port Authority 

13 Immigration Foreign Affairs 

The LMD based in Tarawa, formerly the Lands and Survey Division until its 

functional realignment in 1998, is an important institutional player as it is the 

conduit through which all land use and land management matters for housing, 

business and special development projects on Kiritimati Island must be considered. 

19 

Note – Public Works in Kiritimati Island is under the management control of LINNIX. All other non KUC services are 

provided via line Ministry direction including budget allocation from Tarawa. 


33


The new LMD office was established in Kiritimati Island in October, 2001, and 

undertakes a number of key roles in regard to land use planning and land 

administration in the Line and Phoenix Group but with a focus on Kiritimati Island. 

This includes: 

• land use planning; 

• surveying and preparing maps and plans; 

• land and geographic information; 

• processing, issuing and monitoring of land leases; 

• administration of land records; and 

• Secretarial role to the KLLPB. 

With the establishment of KUC taking responsibility for the main island villages as 

well as the coastal strip between Tabwakea and Banana including Main Camp, 

there is in now in effect a two-tier institutional arrangement, namely, central and 

local government. (see Figure 4.1). 

Figure 4.1: Institutional Framework, Kiritimati Island, July, 2004 

Central Government 

– LINNIX and other 

key agencies such as 

LMDK 

Devolution and 

transfer of selected 

functions from 

Kiritimati Urban 

Council – 8 community 

members representing 

main Kiritimati villages 

The roles of the KUC as identified in the Government warrant establishing the KUC 

under the Local Government Act of 1984, are identified below. 

• agriculture 

• building and town or village planning 

• education 

• forestry and trees 

• land 


34


• relief of famine and drought 

• market control 

• public health 

• public order, peace and safety 

• communication and public utilities 

• trade and industry 

• miscellaneous such as prompting arts and crafts, providing information, 

contact with other relevant organisations, etc 

There is some overlap of island planning and coordination responsibilities with 

LINNIX and the KLLPB, with the KUC due to establish an Island Development 

Committee in November, 2005. While the KUC has only a small physical 

jurisdiction primarily based around the main villages in Kiritimati Island, the island 

coordination and planning committees, both statutory and non statutory, need 

rationalisation. It is envisaged there will continue to be a transitional phase where 

some existing functions such as waste management are transferred from LINNIX to 

the KUC while other duties and functions such as the local village planning are 

being reflected in new membership of the KLLPB (with KUC, as representing local 

village matters, being a key stakeholder). 

With nearly all lands on Kiritimati being State lands and given the paramount socio 

cultural attachment to land including strong emphasis of subsistence activities, land 

development has become heavily politicised. One symptom of this is that there 

have been many governance issues arising in the community over the last decade. 

Governance, the way in which government, private sector and the community 

make decisions affecting the island environment, is at an embryonic stage on 

Kiritimati Island. One reason is that modern and traditional systems of governance 

exist side by side at all levels such as the western concepts of central and local 

government plus the I-Kiribati traditional systems based around the church, village 

and home island affiliation. On Kiritimati Island, there is an increasing number of I- 

Kiribati who now seek equity, efficiency, partnerships, transparency and 

accountability in the island decision-making process and importantly, on land 

management and planning matters. One result of these matters was the decision 

by Government in June, 2005, to introduce a new land supply system in Kiritimati 

Island including a 300 plot land release target for 2005-2006 period. 

Noting the positive step towards the establishment of the KUC on Kiritimati Island, 

some of the governance issues raised by community members include: 

• the lack of clarity in the eligibility criteria used to obtain a lease; 

• the length of the planning and lease process, with many local Kiritimati 

Island decisions made in Tarawa; 

• the absence of Cabinet reasons as to why certain planning applications are 

approved and why others are refused; 

• the combination of the planning and lease process leads to confusion; 


35


• the KLLPB considering an application for a lease despite it not being a 

function of the KLLPB under the LPA, 1977; 

• a perception that certain rules apply to some and not to others in the 

community when leases are processed – for example, some households 

have had 2-3 leases approved by Cabinet while others have none; and 

• the legislation such as the LPA, 1977, is silent on what criteria should be 

used to assess planning applications submitted by applicants. This has led 

to inconsistency in the planning and lease application process. 

4.8 Current Island and Village Planning Arrangements 

The framework for island planning on Kiritimati Island is derived from a hierarchy of 

interrelated plans, namely: 

• the Government of Kiribati National Development Strategies (NDS), 2004- 

2007, which sets out the goals and objective for economic, social and 

environmental growth in Kiribati; 

• the draft Regional Development Strategy prepared by LINNIX November, 

2001; and 

• the General Land Use Plan (GLUP) for Kiritimati Island that sets out major 

types of land uses, the zone objectives and key development standards to 

be adopted. 

As noted in Section 4.1, the GoK NDS, 2004-2007, is the overarching national 

strategic plan that guides decision-making and budget preparation over the 2004- 

2007 plan period. In its role of coordinator for central government in the Line and 

Phoenix Islands, LINNIX in 2001 prepared a draft Regional Development Strategy 

(RDS) outlining key strategic directions for the island to the year 2007. The 

strategy sets out policies and actions for key areas such as the environment, 

housing, education and health. Implementation of the RDS is dependent on other 

Ministries and organisations working towards achievement of the varying policies 

and actions within the context of achieving the higher order NDS, 2004-2007. 

At the island, village and local level, the framework for undertaking physical 

planning is derived from the Land Planning Act (LPA), 1977, and to a lesser 

degree, the State Lands Act (SLA), 2001. The LPA provides for the designation of 

islands and parts thereof for planning purposes including the establishment of a 

LLPB to undertake land use planning. Kiritimati Island was designated for planning 

purposes as early as October, 1979, with the KLLPB as the main planning body 

responsible for physical and land use planning on the island. Under the auspices of 

the LMD Tarawa and since 2001, LMD Kiritimati, GLUPs and development 

assessment in combination with issuing of leases, have been the preoccupation of 

the KLLPB. There has been no functional separation of planning assessment and 

land tenure issues. At the Kiritimati Island level, they have both been considered 

together in the same process, first by the KLLPB although it is not their statutory 

role, and secondly, by Cabinet, LMDK and LMD Tarawa. This has led to conflict 


36


and misunderstanding in the community, with planning and environmental 

assessment playing a minor role in the lease process, if at all. 

LMDK provides the secretarial services to the KLLPB. The KLLPB comprises a 

range of cross sector groups representing both government and the community. 

As noted elsewhere, the Secretary for LINNIX with LMDK being the KLLPB 

secretariat has traditionally chaired the KLLPB. Prior to the establishment of 

LMDK, the LMD staff worked under the administrative auspices of LINNIX while 

their functionally was directed from Tarawa. Traditionally, the KLLPB has been 

isolated in terms of professional assistance and expertise. It has been supported 

on an intermittent basis by LMD staff from Tarawa to facilitate the development 

assessment and lease application process, including preparing draft GLUPs. 

However, the planning pressures on Tarawa have meant that assistance has been 

restricted to 2-3 short visits per year. There has been little understanding by the 

KLLPB of the LPA - including roles, functions and powers of the KLLPB itself – with 

a resulting symptom being a focus by the KLLPB on individual business leases and 

their plots. The establishment of the LMDK office was, amongst other matters, 

aimed towards increasing the capacity and planning ability of both LMDK and the 

KLLPB, including the need for the KLLPB to take a more strategic and integrated 

focus in its local island planning role. 

Membership of the KLLPB is reviewed from time to time to reflect changing 

circumstances including new government institutional and organizational 

arrangements. On the 30 October 2003, following the election of the new 

Government, the Minister for Environment, Lands and Agricultural Development 

revised membership of the KLLPB and this was confirmed by notice under the 

LPA. 20 This membership currently includes: 

• Permanent Secretary, LINNIX, or in his/her absence, the Deputy Secretary, 

LINNIX; 

• Chief Land Management Officer, LMDK; 

• Wildlife Officer, MELAD; 

• Senior Resource Economist, LINNIX; 

• Senior Agricultural Officer, MELAD; 

• Civil Engineer, LINNIX; 

• Trade and Commerce Officer, MCIT; 

• President of the nei Baneawa Women’s Association; 

• Environmental Inspector, MELAD; 

• Tourism Officer, MCIT; and 

20 

Members were formerly appointed by the Minister for Home Affairs and Rural Development (MHARD) until the Land 

Management Division was moved from MHARD to MELAD in August, 2003) 


37


• Senior Land Surveyor, LMDK. 

The Secretary of LINNIX is the Chairperson of the KLLPB, the Chief Land 

Management Officer LMDK is Vice Chairman while the Land Planning Officer in 

LMDK is the KLLPB Secretary. 21 

In 2002, the Cabinet approved the GLUP for Kiritimati Island and it was signed by 

the then Minister for Home Affairs and Rural Development. 22 Official responsibility 

for signing off on the GLUP now rests with the Minister for Environment, Lands and 

Agricultural Development. The GLUP for Kiritimati Island, as facilitated under a 

former AusAID project (2002), provided for seven land use zones with main 

objectives, examples of key development uses permitted and development 

standards indicated on the plan. There is some confusion in the zones, with many 

zones appearing to overlap in purpose including environmental areas included in 

areas reserved for Government use, and separate zones created for wildlife 

conservation and wildlife sanctuary areas, despite their objectives being similar. 

The key zones are: 

• foreshore protection; 

• Government and environmental areas; 

• Government reserved areas; 

• residential areas subject to a DLIUP being prepared; 

• water reserves; 

• wildlife conservation reserves; and 

• wildlife sanctuary. 

The general objectives of the GLUP are to: 

• “provide a balance between opportunities for increased population, housing, 

tourism and business development and the need to conserve Kiritimati 

Island’s environmental resources, 

• provide a range of village areas to accommodate housing development, 

community facilities and commercial opportunities, 

• identify and protect areas of conservation significance for wildlife and marine 

resources, 

• protect the nominated groundwater reserves against pollution and 

environmental degradation, 

21 

The appointments are made under Section 5(3) of the LPA, 1977. 

22 

Signed copies of the GLUP as yet not received in LMDK. 


38


• proved guidelines and directions for development including consideration of 

any site plans for residential development as well as the consideration of 

any laws of Kiribati – for example, the new environmental legislation, and 

• provide detailed land use plans for land planning and the control of 

development in all the main village areas”. 

The GLUP for Kiritimati Island, backed by the mandate of the LPA, provides for 

DLUPs for villages such as London, Tabwakea, Banana and New Banana to be 

prepared. However, in the absence of a permanent LMD office on Kiritimati Island 

to sustain the process, draft DLUPs have been prepared but none ever completed. 

In summary, the current planning system has little or no village management 

capability especially in terms of planning for village infrastructure, orderly land 

supply and integrated island development. A preoccupation with land tenure 

issues rather than separating planning, development and land tenure issues has 

muddied the process, resulting in an ineffective system based on outdated 

legislation to systematically deliver land, housing and public infrastructure. 

4.9 Legal and Regulatory Framework 

Island planning including land management on Kiritimati Island falls under the 

auspices of two main pieces of legislation, namely, the Land Planning Act (Cap. 

48, 1977) and the State Lands Act, 2001. The Native Lands Act (Cap. 61), which 

applies to the bulk of native lands in Kiribati, is irrelevant on Kiritimati Island as 

such lands are state lands that are Government owned. 

The purpose of the LPA is to address issues of land use planning, development 

control and assessment on all forms of land tenure (native, freehold and state 

lands), in Kiribati. The purpose of the SLA is to establish a strategic framework by 

which state lands can be effectively administered and made available for orderly 

development including alienation from Government to another party as part of 

Governments resettlement plans. The SLA was only developed in the late 1990’s 

to deal with the increasing number of persons migrating from the Gilbert Group to 

the predominantly state lands in Kiritimati, Fanning and Washington Islands. Given 

this migration, there has been no framework in which state lands can be alienated, 

whether for freehold or lease, to third parties. This contrasts to the provisions of 

the Native Lands Act, which sets out a clear process for the protection of native 

lands including the issue of leases. 

In addition to the above, a State Pre-Emptive Rights of Purchase Act 2001 came 

into effect in 2002 in regard to lands that were given to settlers under deed or 

license in Fanning and Washington Islands during the period 1988 to 1992. The 

Act provides that the lands in question (described in a schedule to the Act) shall 

not be alienated without first providing the Government the opportunity to acquire 

such lands under processes and procedures set out in the Act. This includes the 

opportunity for purchase of land and settling of compensation claims. 


39


The LPA is the key legal instrument that provides for physical and land use 

planning on Kiritimati Island. The LPA establishes the dual system of the CLPB 

and LLPB as the key bodies to consider land use planning matters set out in the 

Act. The central land planning board with the approval of the Minister may 

designate an area it considers should be subject to planning, as allowed for in the 

provisions of the LPA. Areas that have been designated for planning purposes in 

Kiribati and are subject to the provisions of the LPA are South Tarawa, Abemama, 

Makin, Kiritimati, Fanning and Washington Islands. An area must be designated 

before the provisions of the LPA can apply to that area. Where a designated area 

is wholly within the area of a local council, then the local government council shall 

be the local land planning board for that area. While the KUC is not responsible for 

all the designated area of Kiritimati Island, KUC is responsible for the planning of 

the key villages and coastal land in between. As such, the KLLPB membership 

needs to be changed to reflect these new planning responsibilities. 

The CLPB, based in Tarawa, is responsible for overseeing the preparation of the 

GLUPs for designated areas such as Kiritimati Island. The LPA sets out a basic 

definition of a land use plan, namely, “a general land use plan shall indicate the 

use or class of use to which every part of the land depicted thereon maybe 

permitted to be put on for development or redevelopment”. The LPA sets out a 

process for public exhibition including the establishment of special committees to 

ensure all views are adequately considered. Both the CLPB and the LLPB shall 

take reasonable steps to ensure that the public is aware that the draft plans are 

available for public comment. Upon the recommendations of the CLPB including 

any public submissions considered by the LLPB, the Minister may approve the 

GLUP as being the GLUP “for the designated area it depicts”. 

It is only when the GLUP has been prepared that a DLUP and any supporting 

regulations can be prepared. In this context, DLUPs should be seen as a subset of 

the GLUP, fitting into the strategic land use context established by the GLUP. The 

LPA defines a DLUP as “consisting of a plan or series of plans at an suitable scale 

indicating precisely the use or class of use to which every part of the land depicted 

on the general land use plan maybe permitted to be put for development and 

redevelopment”. Importantly, the DLUP must be prepared by the LLPB following a 

series of steps for public exhibition, similar to those as allowed for the CLPB when 

preparing the overarching GLUP. 

Where a GLUP applies, the LPA establishes the LLPB as the planning consent 

authority, that is, the LLPB shall consider all applications for development or 

redevelopment of land. The Act states that “where a person who develops or 

redevelops land within a designated area for which there is a general land use plan 

without then having valid permission in writing so to do granted by a local board or 

who fails to comply with the terms or conditions of any such permission, shall be 

liable to a fine of $5000”. The LPA states that the development for which 

permission is granted by the LLPB must be in accordance with the GLUP and 

DLUP, if any, for the area in question. The LPA sets out a limited process by which 


40


the LLPB shall consider the development applications submitted to it. If consent is 

granted, then the consent is valid for one year, otherwise a new consent is required 

by the LLPB. The latter provision is never enforced on Kiritimati Island. 

If the applicant is unhappy with the decision of the LLPB, they may appeal the 

decision to the CLPB in Tarawa. If the applicant is still unhappy with the decision 

of the CLPB, they may appeal to the High Court. Where there is unlawful work 

including land use, the LLPB can issue notices to remove, discontinue, dismantle 

or demolish. The Act makes provision for the CLPB and LLPB’s to maintain 

registers of decisions including appeals and makes provision for the central board 

to make regulations. Regulations may “provide for the control of development and 

redevelopment” and “generally for the better carrying into effect the provisions, 

objects and intention of this Ordinance”. Table 4.10 summarizes key 

implementation actions to be undertaken under the LPA on Kiritimati Island and 

their current status. 

Table 4.10: Key Implementation Actions for Kiritimati Island 

as Required under the Land Planning Act (LPA), 1977 

Key Actions in LPA Current Status 

1. Central Land Planning 

Board designates Kiritimati 

Island 

2. Preparation of General 

Land Use Plan 

3. Preparation of Detailed 

Land Use Plans 

4. Establishment of Local 

Land Planning Board 

5. Establishment of Planning 

Application Registers 

6. Enforcement of expiry of 

approval/illegal development 

Designated by Minister 1979. Central Land Planning Board 

based in Tarawa. 

Approved by Cabinet and signed by Minister, 2002. 

Drafts prepared for four villages but plans never formally 

processed under LPA 

Required to be reformed under the auspices of the Kiritimati 

Island Local Council as the new LLPB. 

Planning registers in LMDK 

Site assessments by KLLPB of illegal developments including 

squatters from time to time. 

7. Making of Regulations None prepared to address basic planning issues of setbacks, 

site area, site coverage, water supply, etc 

8. Community education and Intermittent – from time to time on Radio Kiritimati 

awareness on LPA 

The SLA, 2001, is the key instrument that allows Government as owner of state 

lands to undertake the process of making land available for development such as 

via leasehold or freehold land tenure. The Act was put in place as the overarching 

framework by which state lands can be alienated for settlement in areas where 

there is state lands, such as in the Line and Phoenix Group. While there was a 

process for obtaining a lease on native lands in Kiribati via the Native Lands 

Ordinance (Sec.6, Cap.61), a legally endorsed process by which leases and other 

forms of tenure can be facilitated on state lands, has not existed. 

The SLA requires that the Minister for ELAD may by order declare an island or part 

of it to be available for the disposal of State lands. Before recommending on the 


41


number of plots to be available for development including plot size 23 and any 

surveys required to be undertaken, a strategic plan is to be prepared for the land in 

question. Importantly, the plan may include a plan prepared under the LPA 1977, 

such as GLUP and/or DLUP, and shall include the number of plots that may be 

transferred to a third party in the next ‘strategic planning period’. The SLA provides 

no definition of the range of matters that maybe included in the strategic plan, but 

indicates sufficient land should be reserved for the “future needs of Kiribati”. The 

President on the advice of Cabinet must approve the plan. Any existing use or 

occupation of the land that does not have a contract, such as squatting is deemed 

to be a ‘trespass on such land’. 

Table 4.11 summarizes key implementation actions to be undertaken under the 

SLA on Kiritimati Island and their current status. 

Table 4.11: Key Implementation Actions for Kiritimati Island as Required under 

the State Lands Act (SLA), 2001 

Key Actions in SLA Current Status - Comment 

1. Designation of State 

lands to be available in 

agreed island 

2. Prepare strategic plan 

for the State lands to be 

released 

3. Determine plot size and 

undertake survey 

4. Prepare and execute 

contracts for transfer 

5. Land registers on each 

island 

6. Copy of land registers in 

South Tarawa 

Not commenced – should be linked to the resettlement policy 

of Government and actions of LLPB 

Not commenced. Should be done ASAP for Kiritimati and 

other islands. The TA reports and/or the GLUP and DLUPs as 

prepared could be used as the basis for the Strategic Plan. 

Not commenced. Strategic plan and land not yet agreed 

Strategic plan and land need to be agreed prior to land 

administration at plot level. 

Not commenced 

Not commenced 

Other legislation impacting on the development of Kiritimati Island includes the 

Foreshore and Land Reclamation Ordinance (Cap.35) and the Environmental Act 

(1999), the latter coming into force in March, 2000. LMDK is required under the 

Foreshore and Land Reclamation Ordinance to issue licenses for the extraction of 

sand, gravel, reef mud, coral rock and the like. The key objective of the 

Environment Act is to provide integrated development assessment and establish 

environmental impact assessment and pollution control. 

The Environment and Conservation Unit within MELAD has responsibility for 

screening developments, as listed in a schedule to the Environment Act, to assess 

whether an Initial Environmental Evaluation (IEE) or Environmental Impact 

Statement (EIS) is required. On Kiritimati Island, these screenings are most 

common for applications for sand and gravel extractions such as stone and rock 

extraction required for making concrete slabs, seawall enforcement and 

maintenance of road pavements. 

23 

This is to be based on the unit of land required to sustain the support for a family including subsistence. 


42


In summary, legislation such as the LPA was made in a different era, pre 

independence and under the colonial regime. It features overly complex and 

sometimes contradictory legislation. It is primarily orientated to issues of arranging 

land use and amongst other maters, makes no provision for: 

• mechanisms for integrating island development with national planning; 

• effective planning process including incorporating traditional means of 

decision-making in the planning process; 

• clearly stating the aims and objectives for ‘planning’ in Kiribati and Kiritimati 

Island specifically and how any development much contribute to achieving 

these overall aims and objectives; 

• considering the impact of development on the environment in its totality, that 

is, its economic, social and environmental dimensions; and 

• providing for phased and coordinated infrastructure provision. 

There are many parts of the legislation whose provisions are ignored or not acted 

upon by both community and Government. This is a symptom of number of factors 

including: 

• ignorance and lack of understanding of the legislation; 

• an absence of and reluctance to undertake enforcement measures; 

• lack of community awareness and education; 

• lack of human and technical resources; and 

• traditional socio cultural ways being more important than ‘western’ values, 

norms and standards embodied in ‘foreign’ legislation. 

On Kiritimati Island, there is a basic framework in place for island planning under 

the LPA. However, it is based strongly on regulation and an implied zoning 

approach of separating land uses, as embodied in land use plans as the main 

planning instruments. Importantly, no attempt has been made to integrate the new 

Environmental Act with the Land Planning Act and vice versa, despite both being 

concerned with regulating the impact of development on the environment. The 

SLA, on the other hand, is a relatively new Act yet to be implemented. Its 

provisions including developing a ‘strategic plan’ have yet to be applied in Kiritimati 

or other islands where State lands dominate. 

4.10 Summary 

The condition of the planning framework for the planning and development of 

Kiritimati Island is characterised by an array of institutional, regulatory and policy 

settings, highlighting the interrelationships required to be addressed to achieve an 

effective island planning and development system. They also highlight both the 

constraints and challenges and opportunities confronting stakeholders as they 

attempt to tackle the current issues and concerns associated with developing the 

economic and productive resources of Kiritimati Island. This includes institutional 

arrangements for overall island planning including economic development which 


43


are muddy and overlapping with a range of statutory and non statutory committees 

in operation. The increasing island population growth combined with the island’s 

unique natural resources and planning framework, now present Government and 

other stakeholders with the challenge of planning for and integrating economic, 

social and environmental development, whilst providing an enhanced environment 

in which the private and public sectors can develop. 


44


5. The Land Use Development Strategy and Land Development 

Program, 2005-2008, for Kiritimati Island 

5.1 The Land Use Development Strategy for Kiritimati Island 

Land is a fundamental building block of economic growth and development. In 

Pacific island countries especially atolls where land is scare, access to land is 

paramount. In Kiribati, access to land is all important - it is the center of life having 

economic as well as major social and cultural implications. In Kiritimati Island, land 

takes on more significance given the overcrowding and overpopulation in Tarawa, 

and the islands potential as a ‘planned’ economic growth center including 

resettlement. In reality, there are no other physical and economic development 

options for Kiribati – Kiritimati Island has to be the major focus of future 

development in Kiribati. 

As part of a revised approach to land management and development on Kiritimati 

Island, Government has given a commitment to develop land in Kiritimati Island for 

housing, business, tourism and other uses as part of a wider push for economic 

development of the island. In June, 2005, GoK agreed to produce 300 plots 

commencing in the 2005 period as part of a broader strategy to produce 600 plots 

in Kiritimati Island over the next 4 years (2005-2008). The decision to release land 

as part of a systematic and orderly approach to land planning and development 

was in response to the increasing demand on land on Kiritimati Island including 

unchecked migration from Tarawa and the Gilbert group of islands generally (see 

discussion in Section 4 of this report). 

The development of land within agreed village areas in Kiritimati Island must be 

seen within the context of a broader strategy for the development of land use in 

Kiritimati Island. In March, 2005, the KLLPB and other stakeholders adopted a 

land use and development strategy for Kiritimati Island after a number of 

workshops debating island development matters. 24 This strategy, embodied in the 

draft GLUP in Kiritimati Island, forms the basis by which State lands can be 

selected for development within the short and longer term. The strategy identifies 

what village lands should be expanded, contained or development restricted, and 

the rationale for the strategy. By implication, the strategy is important as it defines 

the direction of future physical as well as economic and social development. 

The land use and development strategy for Kiritimati Island as agreed by the 

KLLPB and MELAD is one that; 

• consolidates development in the London-Tabwakea corridor with a major 

extension to the north in Tabwakea; 

24 

Note – under the Land Planning Act, 1977, this plan is called the General Land Use Plan (GLUP). Processes for 

making the plan are clearly set out in the Land Planning Act, 1977. 


45


• encourages infill development on vacant plots including unused business 

leases in the London-Tabwakea corridor; 

• contains new development in the southern peninsula area of Poland in the 

short term, primarily on the grounds that dispersed settlement will increase 

demands on infrastructure and impact on natural resources; 

• prohibits future expansion in the northern peninsula village of Banana given 

its impact on the adjoining water lens, 

• reaffirms expansion into the area west of Main Camp as the New Banana 

village, such village being an alternative settlement focus to London - 

Tabwakea, 

• provides flexibility for economic, tourism and business development 

opportunities on Kiritimati Island both within and outside villages, subject to 

appropriate environmental ‘check and balances’ being undertaken in the 

planning and development process; 

• recognises the environmentally sensitive areas on the island including flora 

and fauna as contained in the ‘Closed Wildlife Areas’ and in the coastal 

zone adjoining New Banana, and 

• promotes the need for staged and coordinated service and infrastructure 

provision under the auspices of key stakeholders working together. 

The principles underpinning the strategy for development of State lands on 

Kiritimati Island are important and include: 

• utilisation of existing infrastructure especially water, electricity and roads. 

This allows Infrastructure services to be provided more cost effectively and 

in most cases, the community can access them more easily; 

• accessibility to employment, community facilities and services, by focusing 

on development in the northern peninsula of Kiritimati Island. This reduces 

trip times, money and use of natural resources, as well as reducing pressure 

to upgrade existing infrastructure in isolated villages, such as in the village 

of Poland; 

• creation of communities around existing villages such as Tabwakea with 

support facilities such as churches, maneaba’s and shops rather than 

creating new stand alone villages, and 

• protection and conservation of areas of environmental significance such as 

the water lens, closed wildlife areas and the foreshore dune areas. 

The GLUP as completed for Kiritimati Island therefore reflects, amongst other 

matters: 25 

• major village zoning of the area from Main Camp to New Banana; 

25 

The GLUP, key zones, their objectives and major uses are contained in TA No. 4257 – KIR Final report, Volume 2 

(Annex 22.) 


46


• major village zoning of London-Tabwakea corridor and an extension to the 

north stopping at the Decca water lens; 

• zoning of the Banana and Poland villages as ‘restricted development’ areas 

as development in these areas is not to be encouraged. In Poland, 

development, if any, should occur only within the village boundary while no 

development should be allowed within Banana village; 

• business, industry and special use zones in the key growth villages; 

• provision of key development standards such as setbacks from the water 

reserves; 

• provision for tourism opportunities throughout the island subject to 

environmental impact procedures and the like, to protect the island’s unique 

environmental assets; 

• protection of development from the water reserves and environmentally 

sensitive areas; 

• provision of a foreshore setback zone to protect the integrity of the coastal 

processes including any impacts from climate change; 

• delineation of institutional responsibility; and 

• identification of broad infrastructure needs. 

The amount of potential developable land in London to Tabwakea, Tabwakea 

North, New Banana as well as the main infill areas of London-Tennessee and 

Tabwakea, are summarised in Table 5.1. 

Village - Future 

Village Area for 

Alienation 

Infill; London - 

Tennessee - 

Tabwakea 

Tabwakea North 

(bounded by A1 

and A2 roads 

and the lake) 

Main Camp – 

infill land (area 

east JOC road) 

New Banana 

(area west JOC 

road along A1 to 

cemetery) 

Table 5.1: Potential Land for Development 

Estimate of 

Developable 

Land 

(hectares and 

acres) 

13.36 ha 

33.6 acres 

261 ha 

644 acres 

32 ha 

78 acres 

291 ha 

718 acres 


Assumptions 

Plots size to reflect 

prevailing densities 

and layout 

Area of 

developable land 

less 20% land for 

roads, utilities, etc 

Utilises areas 

bounded by sealed 

roads and water 

available 

Area of 

developable land 

less 20% land for 

roads, utilities, etc 


47 

Plot Yield at 

1,000 m2 

plots and 

2,000m2 

plots 

95 plots of 

varying size – 

500m2 plus 

2,085 

1,043 

316 

158 

2,324 

1,162 

Population 

Estimate (No. 

of Plots x 7.5 

Persons per 

Household) 

712 

15,637 

7,823 

2,370 

1,185 

17,430 

8,715


Table 5.1 indicates that there are a range of development fronts where land can be 

potentially alienated for development, comprising; 

• infill land where existing sealed roads and water capacity exists, and 

• the development of raw land in the new major development fronts of 

Tabwakea North and New Banana, both areas requiring major provison of 

infrastructure. 

Banana village has not been included in Table 5.1 as the strategy for Banana is 

one of no further development due to the need to protect the Banana water lens. 

The strategy for Poland in the short to medium term is one of consolidation and 

limited development until there is a commitment to major infrastructure provision in 

the southern peninsula. This includes upgrading the Carver Way to the A1 on the 

northern peninsula. Development of new plots in Poland should be contained 

within the existing village boundary. 

5.2 The Proposed Fronts for Land Development 

Based on the above land use development strategy, Physical Layout Plans 

showing subdivision layouts have been prepared by LMDK to facilitate 

development of land in 7 village locations. This includes a small amount of infill 

development in Poland including placement of boundaries around the existing 

occupied timber cottages. The development fronts and the amount of plots 

identified in each area are shown in Table 5.2. 

Table 5.2: Available Plots by Land Development Front 

No. Land Development Estimated Number of No. of Plots identified in 

Front 

Plots Available Physical Layout Plans 

completed end 2005 26 

1. London infill 32 32 

2. North London - 

Tennessee infill 

37 

37 

3. Tabwakea North infill 

26 

26 

4. Tabwakea North 

2,085 

158 (in Stage 1) 

5. Main Camp West 

76 

76 

6. New Banana 

East 

2,324 

61 (in Stage 1) 

7. Poland village 33 33 

Total Plots to date 

4,603 

422 

26 

The plots in Poland are in the order of 600 to 1,000 square metres to reflect the prevailing housing pattern. 

Approximately 19 of the plots contain existing house and the remainder are new plots behind the current two main rows of 

housing. 


48


The number of plots identified in the Physical Layout Plans as completed to date is 

422, noting this number may increase or decrease when plots are physically 

surveyed on the ground. For Tabwakea North and New Banana, Physical Layout 

Plans have been completed for their initial Stage 1 areas, being some 158 and 61 

plots respectively. As a general principle, the balance of the plots to the 600 target 

will be primarily provided in these 2 major development fronts given the potentially 

large development areas in question. Further lands to be released and developed 

will be in the 2 major development fronts of Tabwakea North and New Banana as 

Stage 2 and subsequent areas. 

5.3 Service and Infrastructure Needs 

The level of services to the proposed development fronts is summarised in Table 

5.3. 27 As noted, the KLLPB will need to take responsibility for (i) advising on the 

provision of services and infrastructure to the nominated areas to be developed (ii) 

recommending on the mix of plots to be developed within the varying development 

fronts (iii) recommending on the phasing needed to meet the agreed annual land 

supply target, and (iv) liaising with the Committee for the Allocation of State Lands 

(CASL) who are responsible for the assessment and selection of applicants for 

State land. LINNIX also has a strong role to play in coordinating service provision 

as the water, power and civil work divisions (who are funded by PWD budgets) 

report via a senior management team to LINNIX. 

The initial assessment of services and infrastructure of lands proposed for 

alienation was undertaken as part of the planning process in preparing the Land 

Use and Development Strategy for Kiritimati Island and the Physical Layout Plans 

for the 7 nominated development fronts. The new major development fronts of 

Tabwakea North and New Banana will require substantial new infrastructure and 

services while the existing villages - London, Tennessee and Tabwakea - currently 

experience problems with both water supply and electricity supply. Banana, 

although proposed for voluntary relocation, also has major water supply issues. 28 

For water supply, the trunk water main from the Decca Four Wells gallery serving 

Tabwakea North parallels the adjoining A1 road. There is a capacity of 

approximately 150 plots in the existing Four Wells - Decca water supply system to 

accommodate new plots to be located in the London - Tabwakea corridor including 

the extension into Tabwakea North. This is based on population estimates (divided 

by a Kiritimati Island household size of 7.5 persons per household) derived from 

the maximum design pumping rates (220 m3/day). This plot capacity should be 

checked against actual pumping rates over a sustained time period. 29 . With 

Decca and Four Wells being pumped at 31% and 30% capacity respectively, 

supply from the lens needs to be increased to meet demand. This will require 

27 

At this stage, sanitation is proposed via septic tank, pit latrine or compost toilet. The issue of an appropriate sanitation 

system for the growing villages will be assessed in the proposed ADB ‘Growth Centers TA’ in late 2005-2006. 

28 

Water is currently only available maximum 1 hour per day. Pumps are broken and solar panels have been stolen. 

29 

The pumping rate for 27 May-24 June, 2005, from Decca Four Wells was 206 m3 per day. 


49


water resources assessment of the lens, assessment of current water supply 

design and infrastructure (note - one solar pump is broken, and the manual 

generator is being operated daily - the latter was only intended for infrequent use 

when lack of wind, prolonged cloud cover, etc) and design implications for the 

physical augmentation and extension of the system, including water resources 

monitoring. 30 

Table 5.3: Land Development Front - Level of Services and Need, 

Kiritimati Island 

No Land Level of Comment on Level of Infrastructure Needs 

. Development Services - 

Provision 

Front Infrastructure 

1. London (infill) Water and Need for local road 

Need for increased 

power available realignment as part of new pumping capacity for 

subdivision layout. Pressure water supply. New 

on existing power station. power generators. 

2. Tennessee Water and Power available to serve Improved water 

(infill) power available small increase in plots. supply from Decca 

3. Tabwakea Water available Water available in short term Need for new London 

North (infill) and some from A1 road. Some power - Tabwakea power 

power available capacity from existing generator to serve 

Tabwakea generator. major new village. 

subject to procuring 

Improved water 

materials. 

supply from Decca 

4. Tabwakea Water available Water available in short term Need for new 

North and limited` from A1 road. Some power Tabwakea power 

power. 

capacity from existing generator to serve 

Tabwakea generator. As major new village. 

lands are vacant, major Improved water 

extensions of services supply from Decca 

subject to procuring 

Major civil works for 

materials. 

roads. New 

community services. 

5. Main Camp Sealed local Power limited from Main Need for new power 

West 

roads 

Camp power generator. generator and 

Water potentially available in extension of the 

short term from mains in A1 mains water along A 

road. 

1 from Banana. 

6. New Banana Some sealed No services exist. Water Need for new power 


roads 

potentially available in short generator and mains 

term. No power capacity water extension along 

from existing Captain Cook A 1 from Main Camp. 

generator. As lands are New community 

vacant, major extension of services. JOC rubbish 

services needed. 

tip to be relocated. 

7. Poland village Water and Minimal power capacity. Existing capacity OK, 

power available Water pumped from lenses. subject to no major 

increase in plots and 

demand for services. 

30 

The last assessment was undertaken in 1999-2000. See Douglas Partners, ‘Report on Kiritimati Water Supply and 

Sanitation Project – Assessment of the Sustainable Yield of the Freshwater Lenses’, (January, 2000). 


50


New Banana will require the extension of the mains water supply from Banana, 

such main currently stopping approximately 200 metres west of the JMB store at 

Main Camp. New Banana (and Main Camp West) will require a new power 

generator, with minimal capacity in the existing small-scale generator at Main 

Camp owned and operated by the Captain Cook Hotel. The Main Camp generator 

serves the Captain Cook Hotel and associated Government houses. The generator 

at Tabwakea (located at the intersection of the A1 and A2 roads) has some 

capacity but the inability to secure cable means that not all of the current 

Tabwakea area is served with power. There is some capacity to serve the new 

Tabwakea extension but like New Banana (and Main Camp West) will require new 

infrastructure to serve the large population numbers envisaged. Because of the 

expansion of villages past their boundaries, London to Tabwakea North requires a 

centralised power supply system. The current individual ‘stand alone’ village power 

stations are inefficient and costly to run. 

In summary, infrastructure identification and understanding of existing and future 

infrastructure is fundamental to achieving integrated planning, development and 

efficiency in service delivery. Major infrastructure works are now needed as a 

matter of urgency to underpin development on Kiritimati Island. Upgrading of the 

water and power systems are required to support a growing population, 

notwithstanding the need to resolve current issues associated with supply in the 

current villages. In addition, the issue of an appropriate sanitation system for 

expanding village ‘urban’ areas is yet to be addressed - for example, introduction of 

a reticulated sewage system versus continued use of septic and compost toilets, or 

combination thereof. Telecommunications, under the auspices of TSKL, are also 

problematic - for example, residents of Main Camp including tourists at the Captain 

Cook Hotel, have had no phone communications for the last 6 months. 

5.4 Phasing of the Development Fronts, 2005 -2008 

The KLLPB agreed to a number of assessment criteria to be used in priortising the 

phasing of the development fronts and subsequent release of land. These criteria 

are: 

• utilise existing services and infrastructure (water, electricity, roads, etc) 

where possible; 

• provide land in close proximity to social and community services (schools, 

shops, churches, etc) where possible; 

• provide choice in the size of plots available to applicants, ranging from infill 

sites to 2,000m2 plots; 

• provide choice in village locations, and 

• provide land for different land uses, namely, residential, 

commercial/business, industrial and community activities. 


51


The assessment of development fronts based on these criteria is summarised in 

Table 5.4. 

No. Land 


Front - 

Table 5.4: Land Development Front by Assessment Criteria 

Locality 

Estimated 

Number of 

Plots 

Available 

water power roads shops 

school 

maneaba 


52 

range 

of 

plot 

sizes 

land 

for all 

uses 

1. London infill 32 × × 

2. Tennessee infill 37 × × × 

3. Tabwakea 

× × × 

North - infill 26 

4. Tabwakea 

North 

2,085 

5. Main Camp 

West 

76 

6. New Banana 


2,324 

7. Poland village 

infill 

33 

Total 4,603 

× × 

× × × × 

× × × 

× × 

Based on this criteria, the implication of the assessment in Table 5.4 is that the 

initial mix of plots to be released in year 2005 (300 plots) should come from those 

identified development fronts where water, power, a local road network and basic 

community facilities exist, namely, the infill sites in the existing villages of London, 

Tennessee and Tabwakea North, plus Poland. The remainder of the plots in year 

1 should come from the major new front of Tabwakea North. This phasing will 

allow planning for the extension of services, especially water and power, to 

commence in Main Camp West - New Banana corridor as well as Tabwakea North. 

Table 5.5: Plots for Development by Land Development Front, 2005 

No. Land 


Front - Locality 

Type of 


Front 

Average Size 

of Plots m2 

Estimated 


Plots 

Available 


Plots to be 

Developed 

2005 

1. London infill 500 - 700 32 32 

2. Tennessee 

infill 

2000 

37 

37 

3. Tabwakea North 

infill 

2000 

26 

26 

4. Tabwakea North major village 

extension 2000 

2,085 

172 

5. Main Camp West village 

extension 2000 

76 

- 

6. New Banana new village 


front 

2000 

2,324 

- 

7. Poland village infill 600 -1000 33 33 

Total 4,603 Target 300


Table 5.5 shows the number of plots for development in 2005 by development front 

including average size of plots. 

As the KLLPB and key Ministries and Divisions such as LIINNIX and LMDK will 

have major responsibility for overseeing implementation of the village development 

program, it is important the KLLPB make an annual assessment of the number of 

plots made available. This should be not only residential use, but ensuring that 

within each development front where possible and if appropriate, provision is made 

for plots for commercial, industrial and community use sites. 

Table 5.6 indicates that plots for release in 2005-2008 period. The Table indicates 

the bulk of the residential plots will come primarily from New Banana and 

Tabwakea North. Development within these areas should follow the Structure 

Plans and decisions will need to be made annually regarding phasing. Both fronts 

require a major provision of services notably water and power. Identifying land and 

service requirements now provides the necessary lead time for the planning and 

budgeting of services. Both New Banana and Tabwakea North will accommodate 

the bulk of plots to be developed in Kiritimati Island in the next 15 to 20 years. 

Table 5.6: Plots for Development by Land Development Front, 2005 - 2008 

No. Land 


Front - Locality 

Estimated 


Plots 

Available 


Plots to be 

Developed 

2005 

31 

It is possible smaller parcels of land zoned residential could be subdivided into parcels of 2 to 3 plots. A nominal 

figure is provided for years 2006, 2007 and 2008 to indicate that as demand increases, supply could possibly be increased 

in London subject to permission of the KLLPB. Commercial, industrial and community/special use land should be 

provided in the appropriate zones as identified in the DLUPs. 


53 


Plots to be 

Developed 

2006 


Plots to be 

Developed 

2007 


Plots to be 

Developed 

2008 

1. London - infill 32 32 5 31 

5 5 

2. Tennessee - 

infill 

37 

37 

- 

- 

- 

3. Tabwakea 

- - - 

North - infill 26 

26 

4. Tabwakea 

North 

2,085 172 

32 

32 

32 

5. Main Camp 

West 

76 

- 

32 

32 

32 

6. New Banana 


2,324 - 

31 

31 

31 

7. Poland village - 

infill 

33 33 - 

- 

- 

Total Plots 4,603 Target 300 Target 100 Target 100 Target 

100 

5.5. Implications 

Government has taken the initiative to release land to meet the demand for 

economic growth and development in Kiritimati Island which is to be applauded. 

However, Government has never been involved in implementing an orderly and 

planned land release and development program, as now agreed for Kiritimati


Island. The concept that such a program can be done annually is new and foreign, 

such program requiring: 

• service and stakeholder coordination; 

• accountable and equitable processes for land allocation, 

• the necessary institutional, policy and regulatory support. 

There are 5 main implications of the GoK implementing a land development 

program in Kiritimati Island. These are; 

• the need for coordination and leadership on development. It cannot be 

overstated the importance of the need for LINNIX to take a key role in 

coordinating key players required to support the orderly and timely 

development of the designated village fronts. As LINNIX is the Ministry 

responsible for overseeing development including economic development 

on Kiritimati Island, the role of LINNIX is paramount. 

• for key Ministries and divisions including LINNIX, LMDK, the civil, water and 

power divisions of PWD/LINNIX, to amend their work programs to ensure 

the necessary activities required to achieve the targets in each of the agreed 

fronts, are being carried out. 

• that adequate financial resources are made available in the respective 

Ministry budgets especially LINNIX/PWD (for example, for water supply, 

electricity generation and civil works for roads, clearing and tip relocation 

and LMDK (local survey contractors, cement for boundary markers, 

transport, etc). If resources - human, technical and financial - are not made 

available, then the land development targets and supporting infrastructure 

and services will not be achieved in the required timeframe. In other words, 

there will be slippage in the achievement of outcomes. As a result, there will 

be further community dissatisfaction with the delays in making land 

available, which is limited in supply despite the high demand. 

• preparation, as matter of urgency, of the conceptual design, feasibility and 

funding of the new infrastructure required to support village development 

especially those arising from the consequences of implementing 

Government’s land development program. Otherwise, population growth will 

continue to outstrip the demand for services. The latter includes 

infrastructure for water, power generation and possibly sanitation. 

• importantly, development of economic opportunities to support the day to 

day and longer term needs of the growing population. Land will be primarily 

taken up by those currently residing in Kiritimati Island with family and 

relatives and by those migrating from Tarawa and other outer islands in the 

Gilbert group. However, key questions to be resolved and as raised by this 

report are: 


54


* what employment opportunities are available to support the 

increasing island population that will take up this land? and 

* what economic sectors have the potential for growth and can be 

supported so as to encourage a robust, growing private sector? 

These matters are addressed in Section 6. 


55


6. Economic Activity and the Business Environment in Kiritimati Island 

6.1 Economic Structure 

The structure of the Kiritimati Island economy has been assessed by estimating the 

value added of each industry. 32 This involved multiplying the value added per 

employee in each industry at the national level by estimates of the number of 

persons employed in the various industries on Kiritimati Island. 33 Both formal and 

informal output and employment were included, using the Statistics Office estimate 

of the value of subsistence output and data from the 2000 Population Census on 

formal employment by sector and other economic activities of the adult population. 

The detailed estimation process is set out in Annex A and the results are 

summarised in Table 6.1. 

Table 6.1 shows that the GDP of Kiritimati Island is estimated to be around $8.1 

million (2005 prices), which is 9.0% of the estimated national GDP for 2005 (this 

percentage compares to the island’s population share of 6.1%). The economy is 

dominated by the services sector, accounting for about 80% of total GDP. 

Community services are the largest individual contributor to GDP, with a share of 

about 20% of GDP. The construction industry is the next largest contributor, with 

about 18% of GDP. Wholesale/retail trade accounts for about 11% of GDP. 

As for Kiribati as a whole, the Kiritimati Island economy has a narrow base. This is 

reflected in a high import dependency, a low level of exports and small-scale 

manufacturing activity for the local market (eg. bakery, building materials). It is 

likely that the ratio of the value of imports to GDP is in the order of 75%. 34 Export 

industries account for about 7% of GDP, or $580,000, the majority of which is the 

export of pet fish. Trade openness, defined as the average of the value of exports 

and imports as a percentage of GDP, is over 40%. Tourism is estimated to 

account for around 3% of GDP or $260,000. 35 

It is likely that remittances from expatriates overseas, mostly seamen, are likely to 

be a secondary source of cash income for about 35% of Kiritimati Island 

households. 36 At the national level, wages and salaries earned abroad in 2000 

amounted to an estimated $10 million, equivalent to about 14% of GDP, or about 

32 

Value added is the measure of output used in national accounting to represent an economy’s gross domestic product 

(GDP), i.e. GDP is the total of all value added in domestic economic activity. It is measured as the value of output 

(turnover) less the value of purchases of intermediate goods and services used in producing that output. For general 

Government activities which are not traded, it is measured as the expenditure on wages and salaries. For subsistence 

activities, it is measured as the number of hours spent on subsistence activities multiplied by the KUC’s labour wage rate. 

33 

Estimates of employment were based on data provided by the island office of the Ministry of Commerce, Industry and 

Cooperatives. 

34 

Refer Kiribati: Monetization in an Atoll Society, ADB Pacific Studies Series, December 2002, p.44. 

35 

Based on 800 tourists per year (average of visitors for ‘pleasure’ over 2000-2003), average length of stay of 8 days, 

average daily expenditure of $100 and a leakage factor of 0.6. This excludes expenditure on handicrafts, tours, etc. by 

cruise ship passengers who come ashore for the day. 

36 

Refer Kiribati: Monetization in an Atoll Society, ADB Pacific Studies Series, December 2002, Table A.25. 


56


$115 per head. This equates to approximately $630,000 in the case of Kiritimati 

Island, equivalent to about 8% of GDP. 

Table 6.1: Estimated Value Added (GDP) by Industry for Kiritimati Island, 2005 a/ 

Industry Value Added (GDP) 

37 

Approximated using an ‘income approach’ to measuring GDP and data for the year 2000 presented in the preceding 

reference. The data were compiled from Government Finance Statistics and the national accounts. Government 

expenditure on wages and salaries accounts for 35% of GDP (Table A.19); for public enterprises, the corresponding figure 

is about 10% (Table A.27); transfers to households and payment of the copra subsidy account for about 7% (Table A.19). 

Other items (import duty, imputed bank service charges, freight levy less freight subsidy) account for 14% of GDP. 

38 

Including 4 wholesale/retail stores and 2 church-funded secondary schools. 


57 

($’000) 

Share 

Agriculture 12 0.1% 

Fisheries 676 8.4% 

Manufacturing 204 2.5% 

Electricity & Water 230 2.9% 

Construction 1,484 18.4% 

Wholesale/Retail Trade 894 11.1% 

Hotels, Restaurants & Bars 488 6.0% 

Transport 525 6.5% 

Communications 567 7.0% 

Finance 259 3.2% 

Community Services 1,586 19.6% 

Owner-occupied Houses 145 1.8% 

Unallocated Subsistence 187 2.3% 

Sub-total 7,255 89.8% 

Other items b/ 

(%) 

824 10.2% 

Total GDP 8,080 100.0% 

Source: Annex A 

a/ Includes value of subsistence output imputed by National Statistics Office (refer Kiribati 

Statistical Yearbook 2002, p.16). 

b/ Figures may not sum exactly to totals due to rounding. 

c/ Comprises import duty plus freight levy less freight subsidy less imputed bank service charges. 

There is a high level of private sector activity in Kiritimati Island, with the private 

sector estimated to contribute about 50% of GDP. The corresponding figure at the 

national level is estimated to be about 40%. 37 There are 9 private sector 

establishments contributing significantly to the Kiribati Provident Fund. 38 However, 

the majority of economic activity is generated by a large number of small-scale 

businesses, many of which are home-based. Table 6.2 shows the main economic 

activities in each of the 6 sectors appropriate for analysing Kiritimati Island and the


Table 6.2: Economic Sectors and Key Activities, Kiritimati Island 

Name of Sector Key Activities in Sector Business Licenses 

Issued in 2005 a/ 

1. Marine resources * tropical fish export 

* frozen fish export (CPP) 

2. Agricultural 

resources 

3. Tourism 

4. Informal 

5. Services 

6. Government 

* seaweed, shark fin, sea cucumber 

* solar salt 

* copra 

* vegetables/fruit 

* livestock – piggeries 

* sports fishing 

* diving and snorkelling 

* bird watching 

* socio cultural eg. dancing, handicrafts 

* bread, sweet, candy making 

* money lending 

* thatch making 

* cigarettes 

* copra products such as string, toddy, 

cordial 

* sewing 

* handicrafts 

* retail and wholesale 

* shipping, air services and 

communications 

* hotels, accommodation, restaurants 

* local transportation 

* construction 

* financial services 

* public administration such as island 

coordination and management , trade, 

investment information and advice 

* land supply 

* service delivery such as water, power, 

health, education 

* law and order 

* local government functions such as 

waste collection, licenses, etc 

Source: LINNIX and MCIC. Employment estimate MCIC, October, 2005 


58 

103 for fresh fish sales, 

10 for pet fish operation 

and 2 for shark fin 

operation 

4 for livestock 

9 for tour 

operators/guides 

134 for ice block making, 

120 for bakery operation, 

34 for cigarette rolling, 17 

for money lending, 9 for 

sewing/dress making 

136 for retail stores, 20 

for importer, 9 for 

wholesaler, 121 for 

hawker, 69 for car hire, 6 

for boat hire 

* 65 staff 

* 6 staff 

* 128 staff 

* 22 staff 

* 20 staff 

Note: a/ For Government sector, number of staff in position (allowing for 15% unfilled posts).


number of business licenses issued by the KUC this year. A total of 1,040 

business licenses have been issued in 2005 (there are about 730 households in 

the island), although many of these may not have been activated. 

It is difficult to express employment numbers in terms of ‘full-time equivalent’ jobs 

in Kiritimati Island, because (i) there is no clear distinction between formal 

employment and informal employment on the island, (ii) many households have 

members employed in the formal sector and, as well, hold more than one business 

licence and (iii) some businesses may require only a few hours work each day. 

Formal employment has been defined as employment in the public sector or in one 

of the larger private sector enterprises that makes contributions to the Kiribati 

Provident Fund. The GDP estimates in Table 6.1 are based on 625 persons 

employed in the formal sector (of which 85% are in the public sector) and 1,845 

persons employed in the informal sector, the latter including 1,122 persons in the 

‘unallocated subsistence’ sector. 39 This gives a workforce participation rate of 

about 80%, i.e. 80% of the population of working age is engaged in economic 

activity. 

These estimates mean that, on average, each household has 3.4 jobs, of which 0.9 

is in formal employment and 2.5 are in informal employment. There are about 4 

persons of working age in each household. Expressed another way, 4 out of 5 

persons of working age on the island have a job, of which 1 job will be in the formal 

sector and 3 jobs in the informal sector. 

6.2 The Nature and Composition of the Sectors 

Economic activity in Kiritimati Island has been grouped into 6 sectors, namely: 

• marine resources; 

• agriculture resources; 

• tourism sector; 

• informal activities; 

• service sector; and 

• Government sector. 

The nature of the sectors and their constraints and opportunities are discussed in 

the following sections. 

39 

Refer Annex A for the detailed calculations. Estimates of ‘full-time equivalent’ jobs in the informal sector include 217 

in retailing, 183 in fishing, 123 in construction services, 64 in hotels, restaurants & bars, 60 in transport services and 34 in 

small-scale manufacturing. 


59


6.2.1 Marine Resources 

The fisheries resource base is substantial. The inshore reef and lagoon areas 

support the bulk of the population with fish, mollusces, crustacea and other species 

while the off shore waters are rich in migratory tuna species, skipjack and yellow 

fin. Commercial development of the marine resources in Kiritimati Island focuses 

on exploitation of tropical pet fish and frozen fish, harvesting of seaweed and 

collection of shark fins and sea cucumber. 40 Salt production from the lagoon flats 

south east of Banana also provides small export revenue. 

Aquarium pet fish started as a major export in 1991 and is a major contributor to 

the local economy in terms of employment (divers) and wealth creation. There are 

currently 8 private sector pet fish operators on Kiritimati Island who export their fish 

to Hawaii for distribution to the US mainland and Hong Kong. Approximately 10 

ton of tropical pet fish are exported each month to Hawaii. Monitoring of pet fish 

operators including issuing of licenses, is undertaken by the Ministry of Fisheries 

and Marine Resource Development (MFMRD). 

Seaweed is under the management of the SOE, the Atoll Seaweed Company. 

Based in a warehouse in London, the Atoll Seaweed Company comprises 

seaweed presses, drying tables and storage facilities. Seaweed cultivation and 

harvesting has been erratic, primarily due to the effects of the El Nino in 1999. The 

El Nino brought increased rain and a decline in salinity, leading to rising water 

temperatures in the lagoon. The result has been poor or nil cultivation of seaweed 

as reflected in the decline in seaweed export since the late 1990’s. The peak year 

for seaweed production in Kiritimati Island was 1996 with approximately 35 tons 

per month of export, declining to levels of 2.5 tons in 2002 and 0.75 ton in 2003. 

Similar per month levels have been achieved in 2004 and 2005. Over 90% of 

seaweed production for Kiribati comes from Fanning Island to the north. All 

seaweed is shipped to Tarawa and onto the main market in the Philippines. 

Government subsidises the seaweed payment, currently 15 cents in the 60 cents 

per kilogram paid to customers. Delays in the processing of budget warrants from 

Tarawa means the Atoll Seaweed Company relies heavily on issuing IOU’s to 

customers rather than immediate cash payment. 

The Central Pacific Producers (CPP) is an SOE focusing on chilled and frozen fish, 

mollusces, and crustacean export. With a staff of 16 based in London (of which 8 

are fishermen), CPP is in its infancy, exporting approximately 400 lb of fish and 300 

lb of lobster tail each month to Hawaii (2005). Fish species exported include king 

fish, yellow fin, tuna and red snapper. CPP has only 1 double canoe for 

commercial fishing operations, with demand for fish and lobster supplemented by 

purchases from local fishermen. Demand by CPP affects the degree to which fish 

and other species may be sourced from local fisherman at any one time. Low fish 

exports by CPP have been blamed on the irregular monthly air freight service to 

Hawaii, small cold storage capacity and reliance on 1 agent in Hawaii, the main 

40 

Also known as beche de mer. 


60


CCP distribution point from Kiritimati Island. From time to time, CPP sends their 

exports to headquarters in Tarawa. The CPP is currently undergoing major 

refurbishment and upgrading via a multi million dollar grant from JICA consisting of 

new offices, cold storage, primary processing room, generator, boat and jetty 

facilities. 41 Like the Atoll Seaweed Company, the CPP experiences delays in 

obtaining payments for exports, often resulting in IOU’s to customers rather than 

cash payment. 

Sharks fins and sea cucumbers are collected on an ad hoc basis and provide 

another form of part time income for the population. Shark fins currently bring $90 

per kilogram. There are agents for both sharks fins and sea cucumber on Kiritimati 

Island. Agents export the products to Tarawa by ship and onto south-east Asia, or 

by plane to Hawaii and onto Hong Kong and Japan. 

In summary, the marine sector is at an early stage of development. With the 

exception of tropical fish export, the production, employment and cash generation 

in the marine sector remains small scale, informal and erratic. The potential of 

seaweed production, for example, which was seen as a major export commodity in 

the 1990’s has not come to fruition. Local fishermen sell to both the hotels and the 

CPP on demand as well as informally within the villages. A local fishermen’s 

association has recently been formed to promote the needs of village fishermen, 

such needs being training in fish handling and safety, access to finance for fishing 

gear and boats, and a centralised local fish market including ice making facilities. 

The impact of improved weekly transportation infrastructure via Air Pacific on 

increased marine exports for the CPP and tropical pet fish needs to be tested. The 

constraints to further economic growth in the marine sector as identified by 

stakeholders include: 

• high per unit costs for freight; 

• seasonal fluctuations due to fish migration – downtime; 

• dependency and frequency of 1 airline; 

• susceptibility to El Nino conditions; 

• major markets are via Hawaii; 

• lack of storage and handling facilities at the airport; 

• telecommunications; 

• access to land; 

• security of land; 

• inadequacy of policing of natural resource ‘Closed Areas’ in the lagoon; 

• access to start up finance for those fishermen with no or little savings; 

41 

The project is called” The Kiritimati Island Coastal Fisheries Development”. Contractor - Penta Ocean from Japan. 


61


• delayed payment to customers by CPP and Atoll Seaweed Company; 

• training and awareness – such as certification, procedures for pet fish 

divers, seaweed cultivation management; 

• sustainability of the inshore reef and lagoon marine resources to support 

long term tropical fish export, subsistence and informal fishing. 

Opportunities for further economic growth in the marine sector include: 

• servicing the local tourism market with fish, lobster, crab, etc; 

• increased export capacity resulting from more frequent air services (Air 

Pacific) such as via CPP, thus generating increased local employment and 

income; 

• development of a cooperative for local fishermen’s to facilitate sale to the 

local market, storage, ice production and as well as sale of fish to the CCP; 

• in the medium and longer term, opportunities such as development of prawn 

culture, pearl forming, aqua farming and secondary processing of marine 

resources on Kiritimati Island; 

• supporting local marine resource development initiatives with training on 

safety, GPS, boat maintenance, environmental marine management, etc. 

6.2.2 Agricultural Resources 

Like the marine resources sector, agriculture plays a dominant role in both 

subsistence and commercial production in Kiritimati Island. Within agriculture, the 

production of copra for cash and the use of coconut products for subsistence and 

informal sector activities are dominant. 

There are extensive plantings of copra on Kiritimati Island (approximately 5,000 

hectares) inherited from the former commercial copra plantations operating on the 

island until the early 1980’s. Despite the suitability of copra to an atoll 

environment, copra has suffered from 2 main factors, namely, (i) low world prices 

and poor outlook for future returns and (ii) severe local productivity problems 

relating to local climatic conditions. A key reason for declining productivity such as 

number of nuts per coconut tree, is the age of the palms. Many trees were planted 

in the 1930’s and are at the end or nearing the end of their productive life. As 

such, many of the trees are classed as senile with low productivity. In addition, 

there is wide variation in annual yields on Kiritimati Island caused by unreliable 

rainfall as well as site specific issues concerning high salinity, low fertility and as 

experienced in 2005, major bushfires. 


62


The Agriculture Division within MELAD plants approximately 7,000 seedlings per 

year (2004-2005 estimate) so as to replenish the aging stock. As lands are State 

lands, people are allowed to cut copra with no limit on quantity. 42 The Agriculture 

Division issues licenses to copra cutters for long term stays in the bush (1 week to 

2-3 months) and advises on suitable plantations to access. The Kiribati Copra 

Cooperative Society (KCCS), an SOE, is responsible for collection and sale of 

copra to overseas markets. Copra storage sheds exist in all the main villages 

including London, Tabwakea, Banana and Poland. The latter village in the 

southern peninsula survives primarily from the cutting of copra. The copra is 

shipped to Tarawa and sometimes Fiji, approximately every 3 - 4 months. Like 

seaweed, Government subsidizes the copra price by 15 cents per kilogram and is 

currently paying copra cutters 60 cents per kilogram. Tonnage to Tarawa, currently 

estimated to be less than a ton per week, is declining due to the increasing number 

of senile trees. Like the Atoll Seaweed Company and the CPP, the KCCS 

experiences constant delays in obtaining warrant approvals from Tarawa for 

payments of cash to local customers. 

Alternative small scale agricultural pursuits include piggeries and vegetable 

growing. There are several piggeries at Mokoan Camp (near Banana) which 

supply domestic consumption for the hotel as well as local functions such as 

weddings and birthdays. There are an increasing number of households such as 

those in Tabwakea village who are growing vegetables (tomato, cabbage, 

cucumber, etc) for both local household consumption and sale to the hotels. 

Several attempts have been made to commercially produce local poultry eggs but 

issues of reliable feed supply, power and stock replacement have meant eggs are 

now imported from Hawaii. The honey bee exists in great numbers but has not 

been locally commercially exploited. 

The constraints to further economic growth in the agriculture sector as identified by 


• low yields in agricultural production; 

• location and access to markets; 

• subsidized copra prices; 

• poor natural resource base - coralline and infertile soils, high salinity, 

unreliable rainfall, drought prone; 

• lack of ability to control food crop pests including the land crab; 

• delayed payment to customers by KCCS; 



• access to start up finance; 

42 

Note – in the Gilbert Group, only landowners can cut copra. 


63


• training. 

Opportunities for further economic growth in the agricultural sector include: 

• small scale vegetable growing servicing domestic consumption including 

hotels and restaurants catering to the local tourism market; 

• research, development and pilot programs in niche markets such as non 

juice, etc; 

• supporting local agricultural development initiatives with training on crop 

management. 

6.2.3 Tourism Sector 

Tourists to Kiritimati Island are attracted by 4 main types of activity, namely: 

• sports fishing 

• diving 

• bird watching 

• socio cultural activities, eg. dancing, experiencing the I-Kiribati way 

Tourism demand is highest from sports fishermen who come mainly from the US 

mainland in the winter months. Americans tourists followed by Japanese are the 

main visitors to the island for ‘pleasure’ purposes. Fly fishing for bone fish in the 

sandy, clear lagoon flats in the south west of the island and more recently, demand 

for deep sea off shore fishing for trevally, wahoo and barracuda, are the main 

fishing attractions. There is a well established system of experienced fishing 

guides on the island to support fishing enthusiasts. Coral reef diving by 

recreational divers is rated amongst the best in the world as are the island’s bird 

habitats which cater for over 19 species. The ecological and environmental 

significance of Kiritimati Island as a sea bird habitat offers much eco tourism 

potential. 

Cruise ships from Hawaii and Tahiti stopping in Kiritimati Island have resulted in a 

large influx of day visitors. However, their arrival has been erratic over the past 

decade, primarily constrained by seasonal weather factors (such as high local 

swells), cruise schedules aligned to the US winter (which coincides with the most 

unfavorable sea conditions for landing passengers on the island), and lack of 

access to the main London wharf due to blockage of the channel. Cruise ships 

stay approximately 8 hours and passengers buy handicrafts, take local bus tours 

and see traditional Kiribati dancing. From November, 2005, to May, 2006, cruise 

ships are scheduled to stop in Kiritimati Island every month subject to the London 

channel being dredged. In addition to the large cruise ships, a small number of 


64


yachts stop in Kiritimati Island enroute to more popular destinations such as 

Hawaii, the US mainland and the South Pacific. 

With the exception of sports fishing and to a lesser degree recreational diving, all 

other tourism activities on Kiritimati Island are in their infancy. The utilization of 

both the existing tourism facilities on Kiritimati Island and the development of 

Kiritimati Island as tourist destination for all activities have been constrained by: 

• lack of promotion of Kiritimati Island as a tourist destination, and 

• lack of confidence arising primarily from problems with air transport – the 

reliability of depending on 1 chartered airline and capacity (17 seats on the 

previous charter compared to 112 seats on the new Air Pacific flight). 

Both the above are interrelated as the lack of promotion of Kiritimati Island as a 

destination has been driven in itself by concerns over the reliability of the air 

service. Table 6.3 indicates the number of visitors to Kiritimati Island, 2000-2004. 

Like the 1990’s, visitors to Kiritimati Island has fluctuated in this period, with a 

reduction in cruise ships in 2003 and 2004 having a major impact on visitors and 

local economic activity. Visitors by air declined in the same period with the move 

from the larger Aloha 737 charter to the 17 seater passenger charter in 2002. 

Visitors by air from Honolulu must stay at least 1 week. 43 

Table 6.3: Visitors to Kiritimati Island, 2000-2003 

Year Visitors by Sea Visitors by Air Total 

2000 8,554 1,564 10,118 

2001 6,350 1,494 7,844 

2002 6,189 1,532 7,721 

2003 1,822 929 2,751 

2004 1,118 963 2,081 

Source: MCTTD, October, 2005 

The constraints to further economic growth in the tourism sector as identified by 


• no tourism council; 

• absence of overseas promotion and marketing; 

• limited range of tourist amenities and facilities such as no visitor information 

center and toilet/change facilities for use by tourists; 

43 

It is possible to stay 1 day in Kiritimati Island when arriving and returning via Nadi, Fiji. 


65


• quality of accommodation; 

• access to the main London wharf for cruise ship passengers; 

• quality of the air terminal facilities; 

• minimal communications – unreliable access to phone and internet; 



• reliability of and access to power and water supply. 

Opportunities for further economic growth in the tourism sector include: 

• marketing and promotion of the island’s unique features including being the 

‘largest atoll in the world’; 

• channel dredging and wharf upgrading to support cruise ships; 

• provision of tourism amenities and facilities such as the upgrading of 

facilities at the Bathing Lagoon; 

• supporting the recently established Kiritimati Island Hotel and Tourism 

Operators Organisation as the peak private sector tourism body; 

• improved access to communications such as phone, email and fax. 

6.2.4 Informal Sector 

The informal sector plays an important role in the Kiritimati Island economy, 

especially supporting domestic consumption (see Table 6.4). 

Table 6.4: Population Aged 15 Years and Over by Economic Activity, Kiritimati Island, 2000 

Economic Activity Number of Persons Percentage % 

Cash 492 24.7 

Village work 1151 57.8 

Home duties 150 7.5 

Unemployed 57 2.9 

Old 36 1.8 

Disabled 1 .05 

Prisoner 5 .25 

Student 85 4.3 

Ns. 14 .7 

Total: 1991 100 

Source: 2000 Census of Population 


66


Noting that in 2000 some 58% of the population aged 15 years and over were 

involved in some form of village work in Kiritimati Island, it is estimated that 80% or 

4 out of 5 households are involved in some form of informal activity on the island. 44 

Its contribution to sustaining the survival and livelihood of families cannot be 

understated. The implication of the above is that those involved in formal cash 

employment - that is, 25% of the workforce over 15 years - also have a need to 

generate income to sustain their livelihoods by involvement in informal activities. 

Table 6.5 indicates the range of goods and services produced by the informal 

sector in Kiritimati Island, with an estimate of their unit sales value to the 

household. 

Table 6.5: Range of Informal Activities and Unit Value Estimate, Kiritimati Island 

Main Informal Activity Kiribati name Value Estimate (AUD) 

Baking - bread/cakes kariki 1 loaf (2 halves) - $2 

Sweets and candy kanre 20 cents per candy 

Block making karao buriki $1.50 per block 

Roof thatching raranga ato $2.50 per thatch 

Money lending tango mwane 10% interest 

Cigarette making ni moko 20 cents per local cigarette 

Toddy timbakatai $1 per cup (pure toddy0 

Cordial kaimaimai $3 per bottle 

Coconut oil karaoan te bwa $5 per bottle 

Coconut string te kora $3 per 20 metre 

Ice block making karao aiti 20 cents per ice block 

Hairdressing arao ira Free/contribution 

Sewing te itutu $2 per hour 

Fishing products eg tuna jerky te ika eg. taari 50 cents per cupful 

Handicrafts karao bwain Kiribati $5-$10 for a canoe 

Vegetables/fruit growing te ununiki $2 per cabbage 

Food ‘street’ vendors kamwarake $2 per plate 

Copra harvesting oro ben 60 cents per kilogram 

Sleeping mats kie ni matu $50 per single mat 

Source: LMDK and LINNIX, Kiritimati Island, October, 2005 

Informal activities are diverse ranging from bread making, preparing roof thatching, 

sewing, local cigarette making and collecting toddy, to handicrafts and money 

lending. Toddy, for example, is used by nearly all households and collected daily. 

Collected from the sap of the coconut palm in the heart of the tree, coconut toddy 

44 

Source; LMDK, MELAD, October, 2005. This is consistent with the analysis in Section 6.1 which shows that, on 

average, each household has 3.4 jobs of which 2.5 are informal and 0.9 is formal. For 5 households, there will be 12.5 

informal jobs and 4.5 formal jobs. Therefore, on average (at 3.3 jobs per household), 3 households will be involved 

entirely in informal activity, 1 household entirely in formal activity and 1 household in both informal and formal 

activities. Thus, 4 out of 5 households, or 80%, will be involved in informal activities. 


67


can be consumed fresh, boiled to a thick molasses to be used a cordial sweetener 

(kaimaimai) or fermented to produce a strong alcoholic drink (timbakatai). 

Nurturing of the informal sector is important for a number of reasons: 

• it provides family members with cash who have the potential to be employed 

in the formal sector but are unable to get work, 

• it provides those without any formal training and skills and who are unable to 

enter the formal sector, a means of cash income, 

• it provides a window of opportunity to expand some informal activities into a 

‘full time’ business activity, thus generating greater income and employment 

• it provides a safety net for those in poverty and hardship by being able to 

access cash to met essential needs such as food, kerosene and school 

fees. Increased monetization of activities including informal activities that 

may have been once traded or bartered, or utility services such as power 

and water where user fees are enforced, now need to be paid by cash. 

• It is a significant contributor to overall GDP in Kiribati, being similar or 

greater in value than that added to GDP by the formal private sector. 45 

The constraints to further economic growth of the informal sector as identified by 


• access to start up finance; 

• lack of business skills and knowledge in identifying and managing a 

business; 



• reliable power and water; 

• impact of other hardship and poverty factors on developing an existing 

informal activity into a more formal business. 

The opportunities for further economic growth in the informal sector include: 

• promoting activities that with the proper enabling support, could develop into 

a more formal business activity; 

• provision of reliable infrastructure services such as water and power; 

45 

Source: Kiribati – Monetization in an Atoll Society. ADB Pacific Study Series. 2002. Informal activity may account for 

20% of GDP while formal private sector activity probably accounts for around 15%of GDP (p. 102). 


68


• training in the development of business skills. 

6.2.5 Service Sector 

The service sector comprises those activities that are needed to support the local 

population, the productive sectors and Government. There is a wide range of 

services on Kiritimati Island supporting both private and public sectors and the 

general community including: 

• retail and wholesale - mini and small general stores predominate within 

the main villages of London, Tennessee, Tabwakea, Main Camp and 

Banana. Dojin and JMB are the largest private sector retail - wholesalers 

on island. Bobotin Kiribati Limited, an SOE, is the largest Government 

wholesaler of foods; while Kiribati Supply Limited and Betio Shipyard 

Limited (both SOEs’) are the largest suppliers of hardware and building 

goods. 

• construction - there are over 10 builders licensed with the KUC, such 

builders involved in house and non residential construction; 

• hotels and restaurants - there are a range of hotels and guest houses 

providing accommodation, with most accommodation being 1-2 star in the 

mid to lower end of the quality range. Table 6.6 summaries the visitor 

accommodation in Kiritimati Island. The largest hotel is the Government 

owned Captain Cook Hotel, currently employing approximately 60 staff. 

There is 1 formal restaurant in London. 

Table 6.6: Visitor Accommodation, Location and Number of Rooms, 

Name of 

Accommodation 

Captain Cook 

Hotel 

Te rauwa ni 

bakoa 

Kiritimati Island 

Village Location Number of Rooms 

Main Camp 50 

Tabwakea 7 

Mini Hotel London 4 

Tekabwara Hotel London 5 

Dive Kiribati Port London 3 

Edys Lodge Main Camp 8 

Moumou Lodge Tennessee 2 

Source: MCTTD, October, 2005 


69


• water and power - these services are supplied by Government noting the 

infrastructure for both are in need of major augmentation as well as repair 

and maintenance, 

• financial services - finance is available through the Development Bank of 

Kiribati (DBK), the Bank of Kiribati (BoK) and the Village Bank system, the 

last under the auspices of the MISA. KPF funds can be accessed at 50 

years of age (retiring age). All of the above institutions are represented and 

accessible on Kiritimati Island. 

• air services - Air Pacific commenced a weekly Nadi - Kiritimati Island - 

Honolulu return air service on the 5 October, 2005, using a 737 -700 series 

112 seat passenger plane. This arrangement replaces the Gulfstream 1 

service, a 17 seat twin prop aircraft chartered by Air Kiribati that operated a 

weekly service from Honolulu - Kiritimati Island return. Freight is currently 

imported and exported using a monthly charter freighter from Honolulu. New 

freight arrangements are currently being negotiated with Air Pacific. The 

passenger terminal and freight holding facilities at Cassidy Airport need 

replacement. 

• shipping - Kiritimati Island is served by 3 medium sized shipping vessels 

operated by 3 different companies (2 SOE’s and 1 private company) all 

based in Tarawa, namely, the Kiribati Shipping Line, the CPP and Wysung 

Kum Kee. Shipping is subject to demand, resulting in ships to Kiritimati 

Island (and then onto Fanning and Washington and back to Kiritimati and 

Tarawa) running every 3 to 4 months. There is no scheduled shipping 

service. One result of the above is the continual shortages of (i) essential 

food goods such as rice, flour and sugar and (ii) building materials such as 

cement and timber. The KPA port at Moumou is in need of major storage 

and passenger transit facilities as well as docking facilities for tender and 

smaller vessels. 

• manufacturing - there are several small scale block making operations in 

London and Tabwakea supporting the construction industry. 

• local transport - there are currently 5 mini buses providing public transport 

between London and Banana villages. A passenger ferry (large canoe) 

operates on demand from London to Poland for special events. 

Like all sectors in Kiritimati Island, the service sector is at an embryonic stage of 

development, supporting both the productive sectors and Government. Many 

services are small scale, part time and informal. Some services such as computer 

hardware and software support are yet to emerge on a permanent basis. SOEs 

provide many services such as the supply of fuel, communications and shipping. 

The constraints to further economic growth of the service sector as identified by 


• irregularity of shipping services and impact on access to markets (imports 

and exports); 


70


• uncertainty of dependency on 1 airline service and its impact on local and 

foreign markets; 

• jetty constraints at the port which restrict landing of smaller vessels; 

• blockage of the main channel in London which restricts unloading of 

passengers from cruise ships via tender vessels; 



• long process times for land approval; 

• reliable power, water and communications; 

• slowness in payments from Government and SOEs for services rendered. 

The opportunities for further economic growth in the service sector are: 

• willingness of community members to participate in income opportunities; 

• provision of reliable infrastructure services such as water, power and 

communications; 

• upgrading of the KPA port and London jetty including channel works; 

• training in the development of business and management skills. 

6.2.6 Government Sector 

The Government sector provides a range of public administration and utility 

services through Ministries and SOEs. As noted in Section 4, both central 

government and more recently the establishment of local government as of 2004, 

now operate in Kiritimati Island. The main central Government Ministries and 

SOEs as represented on the island are summarized in Table 6.7. Central 

government provides services such as island coordination and support for 

commerce and tourism; land supply, given that lands are State lands; delivery of 

essential services such as water supply, power; law and order including a 

Magistrates Court. Local government, that is, the KUC, is in its infancy and 

currently provides waste management services, licensing of businesses and issue 

of building permits. 

As noted in Section 4, LINNIX is the lead Government agency on Kiritimati Island 

and is responsible for overall island development and planning. LINNIX 

coordinates with other Ministries concerned with health, fisheries, natural resources 

and lands but has no influence over policy issues and budget allocations as 

decided for such Ministries in Tarawa. LINNIX has no statutory influence over 

prioritizing trade, investment and economic development for the island including 

streamlining business approval processes, as this is the domain of other Ministries. 

Tarawa based Ministries issue directions to their Kiritimati Island offices without 


71


reference to LINNIX. All planning decisions for land development including 

individual land allocations are scrutinized and considered in Tarawa. All individual 

Ministry warrants from Tarawa come through LINNIX. Decision making power is 

still very much centralized in Tarawa, hence leading to long delays in approvals. 

Table 6.7: Key Central Government Ministries and State Owned Enterprises (SOEs) 

in Kiritimati Island 

Ministry Name State Owned Enterprise (SOE ) 

Ministry of Line and Phoenix 

Development (LINNIX) 

Ministry of Environment Lands and 

Agricultural Development (MELAD) 

Ministry Commerce Industry and 

Cooperatives (MCIC) 

Ministry of Communications Transport 

and Tourism Development (MCTTD) 

Ministry of Fisheries and Marine 

Resource Development (MFMRD) 

Ministry of Health and Medical Services 

(MHMS) 

Ministry of Internal and Social Affairs 

(MISA) 

Ministry of Public Works and Utilities 

(MPWU) 

Ministry of Education, Youth and Sport 

Development (MEYSD) 

Ministry of Foreign Affairs and 

Immigration (MFAI) 


72 

Captain Cook Hotel Limited 

Development Bank of Kiribati (DBK) 

Kiribati Provident Fund (KPF) 

Atoll Seaweed Company (ASC) 

Kiribati Copra Cooperative Society Ltd 

(KCCSL) 

Kiribati Oil Company Limited (KOIL) 

Kiribati Ports Authority (KPA) 

Central Pacific Producers (CPP) 

Telecom Services Kiribati Limited (TSKL) 

Bobotin Kiribati Limited (BKL) 

Office of Te Beretitenti (OB) Kiribati Supplies Company Limited 

(KSCL) 

Judiciary Kiribati Insurance Corporation (KIC) 

Ministry of Natural Resources 

Development (MNRD) 

Source: MELAD, October, 2005 

Kiribati Maintenance Company Limited 

(KMCL) 

The constraints of the Government sector as identified by stakeholders include: 

• as lands are State lands, all decisions on the development of State lands 

needs the approval of Government in Tarawa; 

• water and power services are in need of major augmentation;


• slowness in payment to customers especially Government payment to 

private sector service providers; 

• existing institutional arrangements for island development and coordination; 

• centralization of Kiritimati Island decision making in Tarawa; 

• poor communications including phone, fax and unreliable internet. 

The opportunities for the Government sector are; 

• more effective and efficient institutional arrangements for island economic 

development, planning and social development; 

• integrated and more focused island planning and development; 

• building on the existing pool of human resource talent in Kiritimati Island; 

• more autonomy for decision making for Kiritimati Island, with the appropriate 

‘checks and balances’. 

6.3 Costs of Doing Business 

The cost of doing business is high on Kiritimati Island because of its remoteness 

from both Tarawa and other countries that have dealings with the island, plus the 

lack of economies of scale in the provision of infrastructure and services in Kiribati 

generally. 

However, it is considered that the direct costs of business inputs are generally not 

intrinsically higher than they should be, given the small size of the market, the 

subsequent low volume of transactions and the distances from key suppliers and 

customers. 46 Exceptions may be for the services of the Bank of Kiribati and TSKL 

where the earning of high operating profits suggests that their charges may be 

higher than they would be in a competitive environment. Electricity costs, which 

are in part affected by the lack of economies of scale, may be higher than they 

should be because of the type of generation system in place. 

Business licence fees levied by the KUC and the cost of labour available to the 

private sector on the island appear reasonable. Business licence fees vary from 

$25 to $300 per year, depending on type and size of business and ability to pay. 

The unskilled labour rate is currently about $2 per hour; this rate can increase to 

about $4 per hour for experienced labour. 

46 

There is currently uncertainty over the price of air cargo into and out of Kiritimati Island. The freight rate on the new 

weekly Air Pacific passenger flight is about $7/kg. This compares with about $1.50/kg on the monthly Governmentchartered 

freight aircraft from Honolulu. The continuation of the monthly freighter service is unknown at this stage, 

however, the Air Pacific plane does have cargo limitations in terms of both total capacity and individual consignment size. 


73


Import tariffs and corporate taxes levied by the GoK do not appear to present a 

major constraint to the private sector. Exceptions may be the high withholding tax 

on foreign corporations and individuals, 47 the levying of tariffs on business inputs 

that are not necessarily levied on public enterprises and Government departments 

engaged in commercial activities and the considerable variability in tariff rates. 

More importantly though, businesses on Kiritimati Island are faced with a number 

of indirect costs that exist due to: 

• the uncertainty of shipping and air services due to operational unreliability 

and shipping and air cargo services not operating to a fixed schedule; 

• the poor quality of infrastructure services on the island (particularly 

telecommunications and electricity), in part due to lack of back up spares, 

slow repair times and inadequate maintenance programs; 

• lack of market intelligence information, eg. world market prices for export 

commodities; 

• delays in obtaining loan approvals, Government approvals, etc. due to the 

need to process request documents through Tarawa and the existence of 

poor fax and email communication facilities between Tarawa and Kiritimati 


Businesses are forced to incur additional investment costs to cope with these 

deficiencies, including investment in satellite phones, additional electricity 

generating capability (on site back-up generators) and additional storage facilities. 

6.4 What Constrains the Growth of the Private Sector on Kiritimati Island? 

The overarching theme in the development of the private sector on Kiritimati Island 

as the engine for economic growth is the prevailing attitudes in regard to fostering 

private sector development. Constraining private sector growth in Kiribati is a clear 

culture of norms, values and attitudes which, in the main, tend to be conservative. 

The depth of such norms, values and attitudes in the I-Kiribati socio cultural order 

represents a potential constraint to the future development of Kiritimati Island as an 

economic growth center. Those I-Kiribati that do develop successful businesses 

often have to alienate themselves from traditional ways such as bubuti and cope 

with the social consequences. Once they have wealth, they can often be 

reaccepted by distributing some of the benefits to individuals, family, church or 

other organisations. The socio cultural reasons holding back the private sector are 

varied and include the: 

• egalitarian nature of society 

47 

Non-resident corporations and individuals are subject to a 30% withholding tax on Kiribati-source income, dividends 

and profits; repatriated capital is not subject to tax. 


74


• potential inequitable distribution of wealth 

• prevalence of practices such as sharing and reciprocation (bubuti) which 

permeate day to day living and 

• potential loss of political power, control and influence. 

It is not surprising therefore that the current policy and enabling institutional and 

regulatory environment is not as well placed as it could be to support private sector 

development. Symptoms of the hesitancy to embrace the development of the 

private sector are subsequently reflected in the existing framework in which 

business takes place. These include the following key constraints. 

• Lack of Access to State Lands. Land is a recurrent theme in the 

development of Kiritimati Island as it is an essential building block on which 

to construct and operate a business. Without access to land, the private 

sector cannot develop. As noted, Government agreed in June, 2005, to a 

new system of land application, approval and release including the release 

of 300 plots in the 2005 - 2006 period. The system is awaiting 

implementation including final agreement by Cabinet on such matters as the 

criteria by which applicants will be assessed for an application for land. Until 

this new system is tested and land released in an orderly, timely and 

systematic manner, access to land remains the major constraint to 

economic growth in Kiritimati Island. 

• Type of Land Tenure. The form of land tenure to be applied in Kiritimati 

Island will strongly influence the rate of economic growth and investment by 

I-Kiribati and foreign investors. The current land tenure arrangements in 

Kiritimati Island are based on a mix of leasehold and freehold (unrestricted). 

Leasehold (25 years) offers minimal security and does not encourage full 

development of the land knowing a lease may not be renewed. Significantly, 

obtaining payments for both leased and freehold land are problematic for 

Government with lease payment arrears in Kiritimati Island in the order of 

$330,000 while in South Tarawa, they are in the order of $650,000. Despite 

the above, Government agreed in June, 2005, that leasing be the main form 

of land tenure for all lands to be now released on Kiritimati Island. This 

policy decision does little to promote increasing economic opportunities for 

indigenous I-Kiribati, including being able to use State land as an asset and 

collateral for a loan. It also does nothing to address the issue of rent arrears 

- some pay, some don’t. Government can still retain some form of control 

on land by moving to other systems such as restricted freehold where the I- 

Kiribati own the land but Government has a say in who the land is 

transferred to (not for profit reasons only). 48 It also means the private sector 

- DBK and BoK - can provide the loans where necessary to applicants for 

48 

The financial implications of this approach are significant. For example, if Government transferred 300 plots as 

restricted freehold in year 1 at an average price of $2,500 per 2,000 m 2 plot, the income to Government would be 

$750,000. Most of this could be financed from private sector loans. 


75


purchase of land from Government. Thus, land financing is via the private 

sector not Government. It also moves the Government out of leasing lands 

and issues associated with non enforcement of lease arrears. 

• Lack of Business ‘Know How’ and Skills. There appears to be a strong 

degree of interest from people residing in Kiritimati Island to run a business. 

This is reflected in not only discussion with stakeholders but also in the high 

number of business land use applications submitted to the KLLPB and the 

number of business plans prepared for applicants by the Commerce Division 

in MCIC. This wide ranging enthusiasm may result from the fact that 

Kiritimati Island comprises people migrating from all different ‘home islands’ 

and with the exception of churches, there are no strong unifying village 

structures to control aspirations. Family kinship reciprocal arrangements 

exist but appear not to be as far reaching as living on one’s ‘home island’. 

DBK and the Village Bank system note the high number of applicants who 

have enthusiasm but do not have the skills and knowledge to run and 

manage business. This includes identifying which is the best business 

opportunity to pursue as well as dealing with financial issues in running a 

business including loan repayments, tax and paying customers on time for 

business inputs. Further, within the Kiritimati Island community, there is a 

lack of general skills available to support the private sector including 

computer, bookkeeping and office administration skills which are all 

necessary to run a successful small business. Filling vacant employment 

opportunities with skilled people trained on Kiritimati Island should be a 

priority. 

• Uncertainty of Transport Services. A major constraint holding back the 

private sector is the uncertainty arising from the operation of key transport 

services, namely, air and shipping. Private sector needs to regularly service 

markets both local and export and the uncertainty in a planning sense 

caused by (i) unscheduled shipping services and (ii) air services, especially 

freight, which are sometimes erratic and unreliable, increase business costs 

and the fragility of operations. For example, the last minute breakdown of 

the Boeing 727 Honolulu - Kiritimati Island freighter on October, 14, 2005, 

and its delay by one day meant much of the packaged pet fish export, 

awaiting the arrival of the plane at Cassidy airport, had to be discarded. 

This is a loss of tens of thousands of dollars to fish operators who ultimately 

depend on timely transport to Hawaii to agents. Prior to the commencement 

of the new Air Pacific passenger service, whose performance needs to be 

tested, breakdowns and delays of the 17 seater Air Kiribati charter was a 

common monthly occurrence, impacting especially on local tourist operators. 

This overarching uncertainty, primarily with air services which now depend 

on 1 airline, continues to pervade the business environment in Kiritimati 


• Quality of the Physical Infrastructure Services. The quality of the 

physical infrastructure services in Kiritimati Island is generally poor, caused 


76


by either inadequate provision of infrastructure lagging behind community 

and business needs and/or infrastructure that has not been maintained. All 

the key services needed to support an efficient and effective private sector - 

water, power, airport infrastructure and communications - are deteriorating 

and need major maintenance programs. Major augmentation of the water 

and power systems is needed to cater for the expanding village populations 

and associated commercial and business land use activities. For water 

supply, many of the solar pumps at the main water lens of Decca and Four 

Wells are broken. Phone, fax and internet operate intermittently, one reason 

being the Kiritimati Island service feeds via satellite to Tarawa to reach the 

outside world. 49 If the Tarawa TSKL system is experiencing problems, then 

so does Kiritimati Island, notwithstanding the major communications 

maintenance issues that already exist on Kiritimati Island. At Cassidy 

Airport, the arrivals, departure and storage facilities date back to the British 

occupation in the 1960’s. As well, there is no hanger for fire trucks (now 

housed in Banana) or light planes, insufficient holding areas for exports and 

outdated communication facilities. Power to the airport comes from the 

generator at Banana village and is below voltage, often being received at 

180v instead of 240v. 

• Lack of autonomy from Tarawa. Business requires approvals for land use 

and leasing of land from the KLLPB. Approvals granted at the local level 

need to be forward to Tarawa for subsequent Committee and ultimately 

approval by the Minister. Business applications commonly get lost in the 

system and in nearly all cases, there are long delays, 2-4 years is common 

in getting approval or rejection for a business. Hence, it is not surprising 

that there are in excess of 120 squatters on Kiritimati Island, occupying land 

partly due to frustration with the system. This lack of autonomy is also 

apparent in nearly all Ministries where minor decisions such as on tourism 

and commerce, need to go back to Tarawa. There is reluctance by 

Government in Tarawa to relinquish control and power to Kiritimati Island 

which, by default, impacts on the ability of the private sector to flourish. 

• Poor Information Flow. Many stakeholders raised the issue of lack of 

access to information about business opportunities especially access to 

markets outside of Kiribati - for example, opportunities for chilled fish export 

to Fiji. There is an absence of a local focal point for business in both the 

private sector (such as a Chamber of Commerce) and in the public sector 

where both on-island and off-shore information can be sourced with 

reliability and accuracy. 

• Community Service Obligations versus Commercial Operations. The 

unique economic circumstances of Kiritimati Island stemming from its 

isolation, remoteness and limited resource base means Government has to 

make decisions on which services are community services (and subsidised) 

and those services which are considered commercial operations and from 

which costs are to be recovered. These services underpin the performance 

49 

The internet speed is only 31.2 kps. 


77


of the economy and relate to water, power, shipping and air services. 

Government often makes decisions on service provision without 

understanding the full economic implications of the impact on the service on 

the private sector and its wider implication on the community. An example is 

the current air freight arrangements being put in place via the new Air Pacific 

service where Government seeks to encourage use of Air Pacific as the 

main freight conduit rather than the monthly freight charter. Current 

information indicates that the freight costs under the new Air Pacific 

arrangements are approximately 5 times higher than the current freight rates 

($1.50 per kilogram). Rather than having a transitional period to introduce 

such arrangement, the implications of imposing these high costs on the 

private sector will be enormous causing some business to substantially 

reduce imports, or for exports, being unable to compete and forced out of 

business. 

• Public Service Efficiency. Private sector needs a public service providing 

necessary support in a timely and efficient manner. For the private sector, 

time equates to money earned or lost hence, information, assistance and 

services provided by the public sector are critical. For example, arrival of 

cargoes in Kiritimati Island by ship or air means customs and support staff 

need to be on hand to expedite clearance of goods for distribution to 

businesses to meet customer’s needs. Isolation from Tarawa and poor 

management means some Ministries and SOEs are not often operating with 

a full workload, hence public service operations are characterised by 

absenteeism, lateness for work and failure to meet work targets. 

Enforcement is minimal and customer service is erratic. Reform of the 

public service is a long process but the need is equally apparent in Kiritimati 

Island, if not greater given its isolation, as it is in Tarawa. 

• Access to Capital. On the face of it, access to finance doesn’t appear to be 

a major issue on Kiritimati Island with capital available from the Bank of 

Kiribati, the Development Bank of Kiribati and the Village Bank system. 

Problems of access to micro credit for the start up of small businesses often 

evolving from informal activities, appear to relate more to the Village Bank 

system of management of customer and operational issues rather than a 

structural constraint in the sector. Stakeholders have raised issues of high 

interest rates (8-12% in DBK and 13% in BoK), the inability to use leased 

land as collateral and the need to have a permanent stable job and income 

so as to meet the eligibility criteria for a loan. Changing land tenure from 

leasing to restricted freehold, for example, will significantly allow small 

business to obtain a loan backed by title to land. Many issues for access to 

capital relate to concerns of security and minimisation of loan repayment risk 

by the lending authority. 

• Island Development Coordination and Governance. As noted, existing 

arrangements for island development and planning which integrate 

economic, physical and social development needs are not optimal for 

Kiritimati Island. Strategic support for the private sector by promotion of 

trade, investment and economic opportunities and their integration into 


78


island institutional arrangements have yet to be developed. Only recently 

has a body been formed to represent private sector tourism interests on 

Kiritimati Island, a reflection of their need to promote and coordinate 

opportunities for private sector growth working hand in hand with key 

Government stakeholders. These steps are positive, all be it embryonic. In 

the context of Kiritimati Island being a potential economic growth center, 

action now needs to be taken to get the best institutional and governance 

arrangements for coordinating island planning and development based on 

more formal private - public sector partnerships. 

Table 6.8 summaries the main constraints holding back the growth of the private 

sector on Kiritimati Island and possible strategic directions for change. 

Despite the above environment in which business takes place, major gains in 

attitudes and practices to fostering the private sector have been made by 

Government in the last 15-20 years and especially the last decade. The need to 

develop the enabling environment for the private sector and generate economic 

growth opportunities is now well espoused in the GoK NDS, 2004-2007. 

Translating this policy into reality is the key challenge for Kiritimati Island. There is 

a perception by many that Kiritimati Island is an island of opportunity, with some 

referring to it as the ‘business island’ in which the private sector has the potential to 

grow. There appears to be many in the community in Kiritimati Island who would 

like to start a business notwithstanding the obstacles to establishing and managing 

a business that may face them. 

6.5 The Status of Foreign Investors in Kiritimati Island 

Foreign investment has been minimal on the island, notwithstanding there is 

continuing interest and enquiries primarily in the tourism, fisheries and transport 

sectors. At present, only 2 foreign investment activities are operational on the 

island, namely: 

• the Nasda Tracking Station - a satellite tracking station located west of 

Cape Manning and owned by the Government of Japan, 50 and 

• Dive Kiribati - a private company located in London, owned by a US 

national to operate diving tours to tourists visiting the island. 

The Nasda tracking station was opened in 1976, and the lease agreement was 

signed in 1979 by the Government. Nasda had been on the island for 30 years 

and is a reliable source of income to Government from yearly fee payment for 

leasing the land and other services as agreed by both parties. The Government 

receives a total of over US$1,000,000 by Nasda as yearly payments for the land 

lease and air services agreement. Dive Kiribati is providing diving tours and 

50 

NASDA is also referred to as JAXA, the Japan Aerospace Exploration Agency. 


79


Table 6.8: Main Constraints to the Development of the Private Sector – Possible 

Strategic Directions for Change, Kiritimati Island 

Key Constraint Possible Strategic Direction for Change 

1. Lack of Access to 

State Lands 

2. Type of Land 

Tenure 

3. Lack of Business 

‘Know How’ and Skills 

4. Uncertainty of 

Transport Services 

5.Quality of Physical 

Infrastructure Services 

6. Lack of Autonomy 

from Tarawa 

7. Poor Information 

Flow 

8. Community Service 

Obligations versus 

Commercial 

Operations 

9. Public Service 

Efficiency 

* implement Government’s new land release system with 300 plot target 

for 2005-2006 - introduce on an annual basis 

* monitor performance including effectiveness - public satisfaction 

* monitor number of businesses, type, location, market demand 

* move from leasehold land tenure to system of ‘restricted freehold’ as 

interim step to longer term freehold land tenure 

* allow those on existing leases to transfer to new tenure type subject to 

payment of any outstanding rent arrears and land price, thus achieving 

equity in land tenure in Kiritimati Island 

* training in how to identify and manage a business 

* training in computer, office and business administration skills 

* training facility located on Kiritimati Island catering for private and public 

sector training programs, needs, aspirations, etc 

* Government commitment to reliable air and shipping services during 

Kiritimati Island ‘transitional’ development phase 

* promote development of islands productive resources which in turn will 

increase reliability of service and decrease uncertainty 

* agreement on island public investment plan agreed covering areas such 

as water, power, air services, shipping and tourism 

* prepare investment plan in strong partnership with need and aspirations 

of private sector 

* streamline institutional arrangements to ensure investment plan is 

implemented and monitored by peak body 

* more efficient public service operations, maintenance, appropriate 

budgets etc 

* devolution of power and decision making from Tarawa 

* revised institutional, policy and regulatory environment implemented and 

monitored 

* effective Chamber of Commerce and supportive MCIC 

* full economic assessment of impact of user charges on private and 

public sector 

* transitional phased approach with full transparency 

* continued public sector reform program, performance contracts, etc 

* management and leadership training, island leadership 

10. Access to Capital * incentive ‘milestone’ based loan repayments 

11. Island 


Coordination and 

Governance 

* revised institutional, policy and regulatory environment agreed and 

implemented via step by step approach in accordance with human and 

technical resources and capacity 

* private sector represented on revamped island planning and 

development board which sets and implements island and GoK policy 


80


services to the tourists including snorkelling and accommodation. It employs the 

owner and a small local staff, and pays fees and tax to both central and local 

Government on the island. At present, it is 1 of 2 diving companies located on the 

island. 51 

There are 2 overseas unmanned research stations which have been given land 

leases for accommodating an office and equipment. This includes the National 

Oceanic Atmospheric Administration (NOAA) research station at Main Camp that 

has been on the island for 20 years. Another climate related research station has 

just recently been approved in 2005 also for Main Camp. 

In the 1990’s, a Japanese diving company operated on the island but it did not 

renew its agreement and license because of problems stemming from the 

unreliability of the air services. The company was promoting the diving potential of 

the island in Japan. A pet fish company from the Philippines previously had a joint 

venture with a local pet fish company. The joint venture helped the local company 

to establish operations and provided training in diving and other skills required for 

operating the business. 

There are existing and ongoing interests by foreign investors in Kiritimati Island and 

the Line Islands generally. The Government of Japan has expressed interest to 

establish in Kiritimati Island a Pacific Centre for Space Studies and High 

Technology Industry. A billion dollar project was launched in 1998 in Japan by 

JAXA in setting up a launch center and possibly a space university. The project 

was terminated due to financial reasons. The Government of Japan, however, 

remains interested in pursuing the project since Kiritimati Island is seen as the 

main gateway for outer space exploration due to its atoll features (flatness), 

geographic location and isolation. 

In summary, long processes for approval of applications, land issues and lack of 

appropriate infrastructure on Kiritimati Island concerning shipping and air services 

have discouraged foreign investment. The increased capacity in the new Air 

Pacific air service may result in an incremental take up of island opportunities by 

foreign investors, but this remains to be tested. Other essential infrastructure such 

as water, power, communications and housing needs to be improved in order to 

enable foreign investment to proceed on the island. The main expatriate 

operations on the island, namely, Dive Kiribati and JMB, have only survived 

because they have diversified their business base and engage in range of 

economic activities. 

51 

There are only 3 expatriates on the island, one of which operates Dive Kiribati. The other 2 are long term local 

businessmen, 1 operating a mini store while the other operates JMB, the largest importer of goods for wholesale and retail. 

JMB also sells fuel, rents cars and undertakes mechanical repairs. 


81


6.6 Current Donor Projects in Kiritimati Island 

There are 3 major donor projects currently being carried out on Kiritimati Island, 

namely; 

• the Coastal Fisheries Development Project - funded by JICA and 

implemented by Penta Ocean, a contractor from Japan; 

• the Kiritimati Clean Up Project - funded by UK Department of Defence and 

implemented by Safety and Ecology Company (SEC) of the USA and UK; 

• the Airport Upgrading Project - funded by Republic of China (Taiwan). 

6.6.1 Coastal Fisheries Development Project 

The project objective is to improve the facilities on the island currently operated by 

CPP, formerly known as Kiritimati Marine Export Ltd. (KMEL). The improvements 

include construction of a proper facility for primary fish processing and upgrading of 

sections of the wharf required for CPP facilities. The purpose of the project is to 

improve the quality of fish export as well as cater for the local market. The project 

is recruiting up to 60 local personnel to work on the project and is expected to be 

completed by March, 2006. 

6.6.2 Kiritimati Island Clean Up Project 

The aim of the project is to clean up the contaminated lands resulting from the 

British military occupation of the island in the 1950s for atomic bomb testing. The 

clean up includes removal off island of extensive areas of abandoned machinery, 

equipment and materials including asbestos, bitumen and radio active machine 

components, that were left on island after the testing. All contaminated land will 

undergo remediation and will be carried out in a sensitive environmental manner so 

as not to disturb the local environment. The project also involves approximately 60 

local personnel and will be completed in July, 2006. 

6.6.3 Improvements to Cassidy Airport 

The project includes improvement to the runway, taxiway and procurement of two 

fire trucks for the airport. The project enables the airport to meet the international 

standards required by the ICAO as an emergency landing place for flights between 

Fiji and Hawaii (ETOPS) and for receiving the Air Pacific 737 flight to Kiritimati 

Island. The project is to be completed end October, 2005. 


82


7. The Potential of Kiritimati Island as an Economic Growth Center and 

Implications 

7.1 Potential Drivers of Economic Growth 

In considering the potential drivers of economic growth on Kiritimati Island, it is 

worth reiterating the key economic features of the island, namely: 

• lack of economies of scale in the provision of infrastructure and services 

resulting in high unit costs; 

• high degree of vulnerability because of the openness of the economy and 

the narrowness of its base; 

• markets are distant and transport costs are high; 

• market access for both exports and imports is poor; 

• limited independence in Government policy and decision-making resulting in 

delays and uncertainties, with decisions and approvals being made in 

Tarawa; and 

• little internal linkages between the various economic activities on the island. 

It is also worth considering the following criteria as a basis for identifying potential 

drivers of economic growth. The driver should be an economic activity that is: 

• clearly related to a wider development strategy such as that identified in the 

GoK NDS, 2004-2007; 

• sustainable, that is, production should be economically efficient and not be 

dependent on Government subsidies to provide financial viability for the 

producer; 52 

• capable of implementation on a scale which is compatible with the resources 

available locally, and with the scale of other activities on the Island in 

particular, the requirement for labour needs to take into account the demand 

for labour to meet subsistence needs. 

Drivers of economic growth can be either an export-oriented production activity or 

domestic value added production. In situations of small remote economies such as 

Kiritimati Island, it is difficult to imagine an export-oriented production activity which 

is not resource-based and falling into one of the following categories: 

52 

This presumes the subsidisation of transport costs to/from Kiritimati Island is justified for social and political reasons, 

as expressed in national policy goals set out in the NDP; it may also be justified economically on the basis of the avoided 

investment required in urban infrastructure and services and the avoided external costs associated with overcrowding in 

South Tarawa. 


83


• cultivation of an export crop (e.g. copra, seaweed) and first-stage 

processing; 

• fishing for exportable species and first-stage processing, to be airfreighted 

or shipped elsewhere; and 

• specialised tourism. 

For export-oriented production to be economically efficient in small remote 

economies and lead to a sustainable economic activity, there must usually be 

some special advantage enjoyed by that economy. In the case of Kiritimati Island: 

• for agricultural commodities, because of transport costs, it will be unlikely 

that any export with a low value-to-weight ratio will be economic. This is the 

case with both copra and seaweed which currently receive a Government 

subsidy of 15cents/kg (about 33% of the economic price); 

• fisheries is a highly competitive industry in the Pacific and because of the 

need to overcome high transport costs, it will be difficult for Kiritimati Island 

to break into the major markets (e.g. frozen tuna) in a significant way. The 

exception would be for higher valued items such as chilled tuna, pet fish, 

lobster tail and shark fins; 

• for tourism, several specialty markets already exist on the island (sports 

fishing, diving, bird watching) and require further development. Eco-tourism 

is another possibility given the island’s natural attributes. Handicraft 

production could also be extended if cruise ships were to resume their 

regular visits to Kiritimati Island. 53 

For economic growth to come from domestic value added production, the internal 

economic linkages need to be developed. In the case of Kiritimati Island, there are 

two opportunities for this to occur: 

• further development of the tourism sector which will provide the opportunity 

for the supply of local inputs, such as labour, boats, fuel, local land 

transport, car hire, fresh food (vegetables, fruit, root crops, pork and 

chicken, honey) and coconut products (juice, soap). It will also facilitate the 

establishment of new businesses such as local tourist accommodation, 

restaurants, car hire and tour operators; 

• the housing sector which has strong internal economic linkages with its need 

for provision of infrastructure, labour and building materials. Provision of an 

increased supply of housing is dependent upon Government now releasing 

on orderly supply of land, to which it agreed in June, 2005. 

53 

Development of the tourism sector has the inherent advantage of retaining in the host country a fair proportion of every 

dollar spent by tourists. The South Pacific Tourism Association indicates this figure to be 40 cents in the dollar (Air 

Pacific Magazine, Vol. 3, 2005). In the case of Kiritimati Island, it is likely to be higher as most of the activities are 

provided by local interests, a trend which is likely to continue in the short to medium term. 


84


Give the above, the 3 most likely drivers of economic growth to underpin Kiritimati 

Island as an economic growth center in the short to medium term are therefore; 

• tourism; 

• higher valued marine products and 

• the housing sector. 

These drivers meet the three criteria outlined above regarding compatibility with the 

NDS, economic efficiency and appropriate scale. The first two drivers, namely, 

tourism and higher valued marine products, are fairly high risk as they both depend 

on the existence of a reliable air service. Tourists need to able to plan their arrival 

and departure dates with certainty. Shipments of higher valued marine products 

are extremely time-sensitive, with aircraft delays leading to spoilage and reduced 

(or complete loss of) shipment value. They also lead to a loss of reputation as a 

reliable supplier. 

7.2 Rationale of Kiritimati Island as an Economic Growth Center 

The concept of an economic growth center has been identified in Section 2 as 

comprising the key components of: 

• the essential building blocks for growth such as political stability, law and 

order, fiscal and monetary stability, etc; 

• a robust enabling environment comprising responsive institutions, a 

relevant policy setting and pragmatic regulatory environment; 

• a productive public sector; 

• a growing private sector; and 

• development of the island’s productive sectors and resources (that is, the 

drivers of economic growth) 

The basic components of a potential economic growth center exist in 1 form or 

other on Kiritimati Island, thus there is a very basic framework in place upon which 

to build if the GoK decided to pursue development of the Island as an economic 

growth center. The components exist notwithstanding (i) the current high risk 

nature of the economic environment, (ii) the varying stages of development of the 

above components and (iii) the constraints holding back business development. 

Table 7.1 summarises the constraints and opportunities to Kiritimati Island 

becoming an economic growth center vis a vis these components. Key questions 

are if, how and when Government should intervene to act as a catalyst to bring 

this to fruition. These are fundamental questions that GoK must confront. 


85


Table 7.1: Constraints and Opportunities to Kiritimati Island as an 

Economic Growth Center 

Component Constraints Opportunities 

1. Essential 

building blocks 

in place for 

development 

2. Enabling 

environment 

3. Productive 

public sector 

4. Growing 

private sector 

5. Development 

of the island’s 

productive 

sectors and 

resources 

* pervasive socio cultural attitudes, norms, 

values holding back private sector growth 

* evolving traditional and modern 

governance arrangements 

* wavering political commitment and 

support to ‘full” private sector growth 

* new GoK land supply system agreed but 

yet to be tested and outcomes assessed 

* growing population outstripping demand 

for services and infrastructure 

* institutions not effective and efficient - 

many not addressing current issues 

* no one lead agency mandated by 

legislation and with coordinated budget to 

manage Kiritimati Island 

* coordinated policy setting for Kiritimati 

Island not clear - many Ministries involved 

* no overarching public investment 

program for infrastructure and services 

* legislative framework not addressing 

concerns of population and new policy 

directions 

* long process time and delays 

* lack of autonomy from Tarawa 

* separate Ministry budgets - no 

coordinated holistic island budget 

* some functions could be in private sector 

* absenteeism, lateness for work and poor 

management in some Ministries 

* no secure access to land & land tenure 

* public sector inefficiencies 

* uncertainty of transport services and 

impact on markets 

* poor quality of physical infrastructure 

* unskilled labour, business knowledge 

* lack of economies of scale 

* high vulnerability - narrow resource base 

* distant markets and poor market access 

* limited independence in central 

Government policy and decision making 

* uncertainty of transport services (air, 

maritime) and quality 

* sustainability of marine resources 

* little linkages between sector activities 


86 

* continued political stability and will 

* sound macro economic management 

* stability of fiscal and monetary policy 

* accepted systems of law & order 

* increasing social responsibility and 

development of inclusive policies 

* growing environmental management, 

awareness and capacity 

* socio- cultural safety nets in place 

* realign existing institutions and their 

capacity to focus on integrated island 

planning and development including 

economic development 

* integrate land supply and development 

with economic development and island 

planning, goals and vision 

* utilize core of good human resource talent 

* develop island policy based on NDS 

‘growth center’ themes 

* build on new State Lands Act under 

preparation 

* Public Sector reform program in place 

* employment contracts in place to reward 

achievement of milestones 

* amalgamate Government functions and 

activities to align to vision for Kiritimati 

Island planning and development 

* public and private sector partnerships 

working together 

* high enthusiasm for local business 

development 

* healthy informal micro economy 

* access to labour and some capital 

* new land system agreed but not tested 

* sector potential exists eg. tourism, marine 

* export orientated production does exist for 

tourism and high value marine products 

* domestic value added opportunities exist 

in tourism & housing sector with their strong 

linkages 

* keen private sector willing to assess and 

build on business opportunities 

* preparation of public investment program 

in place to support economic growth 

* increased jobs, wealth creation, etc


Kiritimati Island does have the potential for economic growth based on the drivers 

of tourism development, export of higher valued marine products and development 

of the housing sector. The rationale for the island to become an economic growth 

center is therefore to; 

• capitalise on these economic opportunities and attempt to realise the 

potential for economic growth in a planned and sustainable manner, and 

• create an environment that maximises these advantages by development of 

the enabling environment, Government support for the private sector, 

efficient public sector, etc. 

Designating Kiritimati Island as an economic growth centre will have the benefits 

of: 

• promoting development of the island’s productive resources by the private 

sector; 

• providing productive employment opportunities for the labour force; 

• generate increases in per capita income for the island population; 

• generating revenue from an increased tax and business base; 

• reducing levels of poverty and hardship by generally improving the standard 

of living for the island population including improving access to training and 

education, health and infrastructure services; 

• requiring an effective and efficient public sector including development of a 

public investment program; 

• improving opportunities including access to goods and services for those 

living on Fanning and Washington Islands the north of Kiritimati Island, and 

• directly supporting the GoK policy for the establishment of ‘growth centers’ 

as outlined in the NDS, 2004-2007, thus, balancing national development 

over a range of islands, not just centralisation of growth on South Tarawa. 

Like Kiribati, Kiritimati Island is a society in change where subsistence living is 

increasingly moving toward modern lifestyles, where land access and extended 

families are still the bases for survival and where money is increasingly playing a 

significant role in daily living and family survival. In this setting, the challenge 

facing GoK is now to translate the growth potential into opportunities for the 

population on Kiritimati Island. While the risks of developing Kiritimati Island as an 

economic growth centre are fairly high, good economic growth and development 

opportunities will be missed if the Government is not prepared to support and 

facilitate these through planned intervention. This high risk environment will only 

be minimised by the GoK acting as a catalyst to reduce the prevailing economic, 

social ad environmental risk constraints. Failing to act on these potential economic 


87


opportunities will only perpetuate hardship, slow social reform (such as training and 

knowledge benefits) and reinforce out of date policy, institutional and governance 

arrangements. 

The recent ADB/SPC and GoK (MFED) ‘Participatory Assessment on Hardship and 

Poverty for Kiribati’ (2005) which included an assessment of poverty and hardship 

on Kiritimati Island, noted 4 priority areas to alleviate poverty and hardship, namely, 

(i) create additional economic opportunities, (ii) improve basic services and 

infrastructure (iii) establish a training center for advancement of skills and (iv) 

address other local priorities such as land supply, use of land as collateral, etc. 54 

The development of Kiritimati Island as an economic growth center, supported by 

an investment program, can contribute directly to the realisation of all of these 

priority areas. 

7.3 Potential Investment Areas to Support Economic Growth 

Based on the analysis of sector constraints identified in Chapter 6 and from 

discussion with stakeholders, there are a number of potential investment areas that 

could support the sectors identified as the most likely drivers of economic growth 

for Kiritimati Island - that is, tourism, higher valued marine products and the 

housing sector. Investment in a number of focused areas combined with the 

necessary policy, institutional and regulatory changes will facilitate a stronger 

enabling environment for private sector development. These investment areas are 

listed below, together with examples of possible activities comprising both capital 

works and technical assistance within each area: Under a theme such as 

“Supporting Kiritimati Island as an Economic Growth Center”, a number of 

investment projects could be developed from the following areas. 

Water supply 

• Update water resource management plan for the main water lens. 

• Amplify source works and distribution pipelines to main villages of London, 

Tennessee, Tabwakea, Banana and new Banana. 

• Provide reticulation in the new urban village areas especially new Banana 

and the North Tabwakea extension. 

Environmental sanitation 

• Improve efficiency and effectiveness of collection and disposal of solid 

waste, waste water and sewage. 

54 

Draft Final report, July, 2005 


88


Power supply 

• Improve efficiency and effectiveness of electricity generation in existing 

villages of London, Tennessee, Tabwakea, Main Camp and Banana. 

• Centralise power supply in the main development corridor of London, 

Tennessee and Tabwakea. 

• Provide power supply directly to Cassidy Airport. 

• Provide transmission to and reticulation in new urban village areas of new 

Banana and Tabwakea extension. 

Telecommunications 

• Improve reliability of phone, fax and email facilities for businesses. 

Transport 

• Maritime 

* Provide cargo storage warehouse at main port and associated cargo 

handling equipment. 

* Construct lower jetty at main KPA Port in Moumou and at the London 

wharf for small ships and offloading of passengers from tenders. 

* Carry out deepening of channel at London port for use by cruise ship 

tenders. 

* Provide cruise ship passenger facilities at London port (covered passenger 

processing area, toilets, etc). 

• Aviation 

* Construct new terminal building at Cassidy Airport with passenger 

processing facilities. 

* Provide covered cargo storage facilities. 

* Build fire tenders hangar. 

* Procure new HF radio communications equipment. 

Sector-Specific infrastructure 

• Tourism 

* Provide visitor information centre and associated products. 

* Construct key amenities and facilities at main tourist attractions (shelters, 

toilets/change rooms, etc) such as the Bathing Lagoon, Main Camp. 

* Upgrade road access to main tourist attractions. 


89


* Improve facilities at Cassidy Airport, London wharf and KPA port area. 

• Marine products 

* Provide local wholesale/retail market, including facilities for ice-making, 

storage and sale of fishing gear and boats. 

• Housing support 

* Establish revolving fund for purchase of building materials and installation 

of appropriate sanitation systems. 

* Provide rain tanks. 

• Training 

* Provide technical training facility to increase the supply of skilled labour 

(eg. building tradesmen, mechanics, refrigeration servicing and plant 

operators). 

* Conduct of training and awareness programs to support private sector 

development, ranging from general application (eg. business start-up and 

management, computer technology, tourism awareness) to sector-specific 

application (e.g. growing/commercial supply of vegetables, 

production/commercial supply of livestock, fish handling, butchery, boat 

maintenance, marine safety, marine environmental management, tour 

guides). 

7.4 The Implications of Positioning Kiritimati Island as an Economic Growth 

Center 

It should be made clear that the environment for business, economic growth and 

development generally in Kiritimati Island is high risk and fraught with challenges. 

Socio cultural norms and values holding back private sector development, plus 

barriers put up by Government (often by default) pose major hurdles. Land reform, 

for example, is an issue high on the list of economic (and social) concerns but GoK 

has moved to change the policy setting and the new land release program for 

Kiritimati Island now needs to be tested and monitored. As well, GoK has 

increased the capacity of the passenger air service but freight uncertainty 

(scheduling and pricing) remains a concern. On the other hand, the private sector 

in Kiritimati Island appears different to national trends by having a healthy micro 

business economy, with enthusiasm by many to start a business or increase the 

size of their business. These messages are clear from this assessment. 

Accepting the need for greater economic opportunity means GoK facing the 

challenge of undertaking reform to meet this goal. The precarious national 

development situation facing Kiribati - including a lack of new private investment in 

production, high population growth rates, unchecked urbanisation on South Tarawa 

and the need for a growing monetary economy to support such population 


90


increases - suggests GoK has little other option but to grasp the opportunities for 

Kiritimati Island in a planned and sustainable manner. To not develop Kiritimati 

Island growth center will constrain economic growth and the benefits it can bring. 

The challenge for Government is now to strategically intervene and make a serious 

commitment to developing private sector opportunities concurrent with realigning 

the policy, institutional and regulatory setting on Kiritimati Island. If GoK agrees to 

move towards the development of Kiritimati Island as an economic growth center - 

noting the key elements in the growth center model as outlined in Section 7.2 

include promoting private sector growth as the key engine of growth, supported by 

an efficient and effective public sector - then there are 4 main reform implications. 

These are: 

1. GoK Commitment. There are a number of major risks associated with 

implementation, namely, Government and Ministry will is absent and will waiver, 

Government priorities change, land tenure issues not sufficiently addressed, and 

other stakeholders in the process do not share the same island vision for island 

growth. The elements of a commitment from Government should consider: 

• political will, resolve and leadership; 

• broad stakeholder support including that of LINNIX for the TA outcomes and 

directions; 

• support and ownership of the emerging concept project designs; 

• maintenance of reliable transport services, both air and shipping, given the 

main drivers of economic growth depend on these services; 

• the fundamental realignment of the institutional, policy and regulatory 

settings so as to translate growth opportunities into reality including 

elevating the role of the private sector; 

• Government to continue with its commitment to the orderly and systematic 

release of State lands with an appropriate land tenure system which 

supports incremental private sector growth; 

• MFED as the national driver supporting Kiritimati Island as an economic 

growth center while a strengthened and realigned LINNIX (or other agreed 

body) is the island driver, and 

• that Government and ADB will sign a loan agreement for agreed investment 

projects on Kiritimati Island. 

Unless this commitment is made, Kiritimati Island will remain unplanned in an 

integrated island planning context, not realizing its productive potential. 


91


2. Policy Setting. The implications of going down the path of an economic growth 

center mean that Government will need to consider a range of policy changes to 

bring the growth center concept to fruition. The first consideration is for Cabinet to 

agree that this direction has merits both for Kiritimati Island and nationally, with 

positive outcomes for all. Government will need to consider over the next 12-15 

months a range of policy directions for Kiritimati Island as they relate to, for 

example, realigning the role of LINNIX as the lead island development and 

planning agency, how economic development is best coordinated and facilitated on 

the island, what key projects should be agreed so as to support the main 

economic drivers, what priority investment projects should be supported and how 

successful is the GoK new land supply and release program for Kiritimati Island, 

currently due to commence. There needs to be a willingness by GoK to be serious 

about implementing its policy for growth centres, as clearly set out in the NDS, by 

changing the policy environment to enable sustained economic growth on Kiritimati 

Island. This includes considering human and financial resource implications. 

3. Institutional Realignment and Governance. Institutional arrangements need 

to be strong, effective and most importantly, functionally relevant. There will be a 

need to assess various options and models of how best to achieve integrated 

island planning and development with key stakeholders. A step by step approach 

would build on the existing institutional arrangements and human resource pool. 

One goal would be to refocus LINNIX as the key coordinating agent for the 

development of the island, focusing on a systematic, holistic programme budgeting 

approach to island development. With the land being State land, the key functions 

of a revamped LINNIX would be to plan and develop the island including 

encouragement and fostering economic development. One institutional option for 

LINNIX would be to work towards a development cooperation model (for example a 

Kiritimati Island Development Corporation) with its own legislation, board and 

means of funding the provision of infrastructure and services (such as from land 

sales or lease rentals). Key tasks may include. 

• setting and achieving growth targets; 

• developing public infrastructure and services via an investment program ; 

• economic, social and land use planning (strategic planning and regulatory 

planning/enforcement); 

• land development and marketing of economic development opportunities to 

meet the needs of the private sector; 

• land development, civil engineering and project management; 

• environmental impact assessment; 

• financial management; 

• community awareness and coordination and understanding of stakeholders 

needs; and 

• institutional coordination and management to ensure services and 

infrastructure are in place to support private sector and population growth. 


92


4. Legislation. Changes in the policy and institutional setting for Kiritimati Island 

will require new legislation for Kiritimati Island. A new State Lands Act is already 

being prepared to facilitate the planning and development of land on Kiritimati 

Island with focus on a more strategic outlook. This will allow for issues such as land 

tenure to be changed from time to time according to current policy. A revamped 

LINNIX would require legislation if Government is serious about facilitating 

integrated island planning and economic development, such legislation clearly 

setting out objectives, board composition, functions, planning processes, means of 

pubic participation, provision of island infrastructure and funding sources. 

Figure 7.1 summarises the key components of Kiritimati Island as an economic 

growth center based on the question - does the GoK want Kiritimati Island to be an 

economic growth center or not? If not, the existing status quo of issues 

constraining economic development and the well being of the community in 

Kiritimati Island will remain. The main short term interventions required by GoK if it 

wishes to facilitate Kiritimati Island as an economic growth center are summarised 

in Table 7.2. 

Table 7.2: Main Implications of Kiritimati Island as an Economic Growth Center 

Component Key Interventions Required 

1. GoK Commitment 

* political will, resolve and leadership; 

* broad GoK stakeholder support including LINNIX 

* support and ownership of emerging project designs 

* realignment of institutional, policy and regulatory 

settings to translate growth opportunities into reality; 

* Government to continue with its commitment to 

release land with an appropriate land tenure system 

* that Government and ADB will sign a loan agreement 

for agreed investment projects on Kiritimati Island 

2. Policy Setting * determining revised role and functions for LINNIX 

* determination of island budget arrangements 

* determining economic development role including 

promotion of investment 

* determining island land use planning arrangements 

* determining components of public investment program 

and means of financing 

* role of local and central government 

* agreeing Development Plan outcomes 

3. Institutional Realignment * agreeing best institutional model for LINNIX 

and Governance 

* revamping LINNIX so as to deal with current planning 

and economic development issues 

* inclusion of public representatives 

* inclusion of private sector representatives 

* integrating the local KUC into the overarching island 

r arrangements 

4. Legislation * revised State Lands Act 

* legislation giving mandate - functions to new LINNIX 


93

DEVELOP ISLANDS 

PRODUCTIVE 

RESOURCES 

IMPROVE 

ENABLING 

ENVIRONMENT - 

MINIMISE 

CONSTRAINTS 

KEY POLICY 

QUESTION FOR 

GOVERNMENT 

OF KIRIBATI 

EXISTING 

SITUATION 


Figure 7.1: The Key Components of Kiritimati Island being an Economic Growth Center 

Develop islands productive resources to support drivers of 

economic growth - tourism, marine resources and housing, etc 

Revised 

Policy Setting 

Growing Private 

Sector and Efficient 

Public Sector 

Functional 

Institutions 

Relevant 

Legislation 

YES DOES GOVERNMENT WANT TO MAKE A 

COMMITMENT TO ADDRESS THESE 

ISSUES AND CONCERNS? YES OR NO ?? 

NO 

Main Kiritimati Island Economic Development and Planning Issues – 

poor access to land, restrictive land tenure, poor quality of infrastructure 

(water, power, telecommunications, uncertainty of transport services, lack 

of training opportunities, costs of services especially water and power, high 

control from Tarawa leading to major process times, out of date 

institutional and governance settings, limited cash employment 

opportunities, no economic investment program and support, etc 


94 

Main Benefits of 

an Economic 

Growth Center? 

* Access to basic 

services including 

land and 

infrastructure 

* Opportunities to 

participate in 

community and 

private sector 

* Access to jobs & 

cash incomes 

* Increased GoK 

revenue 

Monitor


7.5 Where to from here? 

The ADB and the GoK need to consider this report including GoK clearly 

understanding what is an economic growth center is (as opposed to other island 

development models) and associated implications for change. The ADB and the 

GoK need to decide whether they wish to proceed or not with the planning and 

development of Kiritimati Island as an economic growth center given the strong 

benefits it can bring. A high level commitment from the GoK to realign the policy, 

institutional and regulatory setting in Kiritimati Island (pre conditions for an ADB 

investment loan) while concurrently undertaking the design of an ADB investment 

project, is paramount to continuation of the TA. If the TA is to continue, the focus in 

Phase1Bi should be achieving the following 5 major outcomes, namely: 

• development of a draft Kiritimati Island Development Plan (Action Plan) 

which would focus on island, sector and issue assessment including 

development of strategic actions for key thematic areas which underpin 

Kiritimati Island as an economic growth center. The priority themes as 

emerging during this present assessment are; 

* promoting economic development; 

* access to land supply; 

* investing in public infrastructure and services; 

* effective island institutional and governance arrangements; 

* managing the islands environment and natural resource base; 

* reducing hardship and poverty. 

• based on the investment areas as identified in this report, development of 

concept designs for a number of projects suitable for ADB funding including 

scope of physical works, beneficiaries and the required policy, institutional 

and legislative adjustments; 

• development of institutional and governance options including strengths and 

weaknesses for an appropriate institution to act as the lead agency 

responsible for integrated island economic, physical and social planning and 

development; 

• continuing economic, social and environmental assessments on the 3 

nominated economic drivers including input into the emerging conceptual 

project designs and the draft Development Plan (Action Plan) for 

Kiritimati Island and 

• comments on the TOR for Phase 2 including major outcomes. 

A time frame recommending the timing of inputs for the Development 

Planner/Team Leader, Economist, Engineer, Social Specialist and Environmental 

Specialist is shown in Table 7.3. Key tasks and outputs for Phase 1B are 

summarised in Table 7.4. 


95


Table 7.3: Recommended Time Frame and Inputs for Phase 1B, Quarter 1, 2006 

Month 2006 February March 

TA Adviser Week Week Week Week Week Week Week Week 

1 2 3 4 5 6 7 8 

(Wed. 1 

Feb) 

(8 

Feb) 

(15 

Feb) 

(22 

Feb) 

(1 

March) 

(8 

March) 

(15 

March) 

(22 

March) 

Team Leader 

Economist 

Engineer 

Social 

Environmental 

Table 7.4: Key Tasks and Outputs, Phase 1B, Quarter 1, 2006 

Adviser Title Key Tasks – Outputs, Phase 1B 

Development • Draft Kiritimati Island Development Plan 

Planner/Team • Analysis of Institutional Options for Kiritimati Island as an economic 

Leader (Paul growth center 

Jones) 

• Contribute to the development and assessment of the investment 

concept plans and program (cross sector implications, etc) 

• TOR for Phase 2 

• Team management, project coordination and stakeholder liaison in 

Kiritimati Island and South Tarawa, delivery of Phase 1B outputs 

Economist • Contribute to the development and assessment of the investment 

(Lindsay 

concept plans and program (economic assessments, costs and 

Shepherd) benefits etc ) 

• Contribution to draft Kiritimati Island Development Plan (economic 

development component) 

• Continuing economic assessment of growth center concept 


Infrastructure • Development and assessment of investment concept plans and 

Engineer 

program (assess and confirm needs, demand analysis, technology 

options including wind and solar power, costs, who benefits, 

institutional policy assessments, etc ) 

• Contribute to draft Kiritimati Island Development Plan (investment 

program for infrastructure component) 


Social 

• Island social and poverty assessment 

Specialist • Contribution to, and identification of the social poverty implications of 

emerging investment concept plans and program (social impacts, 

policy assessments, options, etc ) 

• Contribution to draft Kiritimati Island Development Plan (social - 

poverty component) 


Environmental • Island environmental assessment 

Specialist • Contribution to, and identification of the environmental implications of 

emerging investment concept plans and program (impacts on natural 

resources/environment, etc) 

• Contribution to draft Kiritimati Island Development Plan 

(environmental management component) 



96


Annexes 

Annex A: Estimate of Kiritimati Island GDP by Industry 

Detailed calculations for the estimation of GDP are given in Table A.1. A 

summary of the process is given below. 

(1) Calculate industry value added per employee from the National Accounts and 

the Population Census. 

(2) Estimate the number of full time equivalent ‘employees’ per industry on 

Kiritimati Island as follows: 

“Formal’ sector (9 private sector firms contributing significantly to KPF plus all 

public sector employees) 

For enterprises for which number of employees is known, calculate employees 

per $ of KPF contribution. 

For other enterprises, multiply KPF contribution by employees per $ of KPF 

contribution; adjust if number of employees doesn’t match with knowledge of 

enterprise’s scale of operations. 

“Informal’ sector 

Review Business License Register for double-counting (by excluding “formal” 

enterprises and duplicate licenses in the one business type). 

Assess percentage of licenses issued for each business type that may have not 

been activated. 

Assess number of ‘full-time equivalent’ jobs for each license issued, based on 

likely hours of work per day and, for ‘manufacturing’ activities, scale of activity. 

Total employees 

Add ‘formal’ and ‘informal’ employees and multiply total by value added per 

employee from (1). 


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TABLE A.1 ESTIMATION OF KIRITIMATI ISLAND GDP BY INDUSTRY, 2005 

GDP + Value 

Subsist- Added Value 

GDP a/ 

ence b/ 

Formal c/ 

Informal d/ per head e/ Formal g/ 

Informal Added h/ 

($'000) ($'000) (persons) (persons) ($) (persons) (persons) ($'000) 

Agriculture i/ 

2432 5329 48 11943 444 12 12 12 

Fishing 2347 3828 206 6146 603 29 183 676 

Seaweed 215 215 0 1005 214 1 0 0 

Manufacturing 584 1421 150 124 5178 0 34 204 

Electricity & Water 863 863 187 0 4615 43 0 230 

Construction 2180 2180 346 0 6301 80 123 1484 

Wholesale/Retail 8100 8100 995 1991 2713 67 217 894 

Hotels, Restaurants, Bars 1951 1951 186 342 3694 50 64 488 

Transport 0 

Public 3930 3930 527 0 7453 48 0 415 

Private 1520 1520 305 653 1586 0 60 110 

Communication 3030 3030 112 0 27133 18 0 567 

Finance 3544 3544 317 0 11180 17 3 259 

Owner-occupied Houses 

Community Services 

1920 1920 23 145 

Government 25626 25626 4376 0 5856 196 0 1331 

Private non-profit 1810 1810 613 0 2953 58 0 199 

Other 755 755 832 0 907 6 47 56 

Unallocated Subsistence j/ 

Kiribati (2000) 

Employment Employment 

1223 8507 144 1102 184 

Sub-total 60807 67245 9200 30712 1685 625 1845 7255 

Imputed Bank Service Charges -3100 -3100 -37 -234 

Total 57707 64145 7021 

Import Duty 13907 13907 165 1050 

Freight Levy 1370 1370 16 103 

less Freight Subsidy 1252 1252 15 95 

Monetary GDP 71732 

Subsistence Output 6438 

Total GDP 78170 78170 8080 

Source: Derived from tables in (i) Kiribati Statistical Yearbook 2002 (Statistics Office, Ministry of Finance and 

Economic Development) and (ii) Kiribati: Monetisation in an Atoll Society-Managing Economic and Social Change , 

ADB Pacific Studies Series (December 2002) 

Notes: 

a/ From Table A.3 in Source (ii). 

b/ Subsistence Output allocated to Agriculture, Fishing, Manufacturing and Unallocated Subsistence on the basis of 

number of households other than 'employment households') with main source of income as copra, other agriculture and 

sour toddy for (Agriculture), fishing (for Fishing), handicrafts (for Manufacturing) and other (for Unallocated Subsistence). 

Refer Table A.25 of Source (ii). 

c/ From Table A.23 in Source (ii), with following estimates: 

Agriculture is based on all formal employment being in public enterprises and allocated between Agriculture and 

Fishing using share of implied wages and salaries (Table A.27 in Source (ii)). 

Fishing is based on employment in public enterprises being allocated between Agriculture and Fishing using share of 

implied wages and salaries plus all formal employment in 'agriculture and fisheries' private sector being in Fishing. 

Public Transport and Communication allocated by multiplying total employment for 'land/air transport and 

communication' by share of implied wages and salaries (from Table A.27). 

Other Community Service is the 'unallocated' estimate (all private sector employees). 

d/ From Table A.25, assuming 1.9 persons per household engaged in informal activities (based on no. of households, 

other than those in employment, in Table A.25 divided by population engaged in village work in Table A.24 in Source (ii)). 

'Own business' households allocated to industry as follows: 64% to Wholesale/Retail Trade, 21% to Private Transport 

(including services to transport), 11% to Hotels, Restaurants, Bars and 4% to Manufacturing - this allocation reflects 

the distribution of private business in Table A.27. 

e/ Per employee, other than for Owner-occupied Houses where per person aged 15 years & above is used and import 

duties and freight levy/subsidy where total population is used. 

f/ Based on data provided by Ministry of Commerce, Industry and Cooperatives, Christmas Island. 

g/ Defined as significant contributors to the Kiribati Provident Fund. 

h/ Sum of formal and informal employment mutiplied by value added per head calculated for Kiribati escalated to 2005 

prices level (16%). 

i/ Mainly copra. 

j/ No. of persons involved in Unallocated Subsistence on Kiritimati Island is the difference between population engaged in 

village work (Statistical Yearbook , Table 8-1, updated to reflect 2005 population estimate) and the total of informal 

employment allocated to industries. 

f/ 

Kiritimati Island (2005) 


98

The Potential of Kiritimati Island as - Asian Development Bank

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