Trade Policy Framework for Kiribati 2017-2027

1.1 Vision 1 5.2 Preferential Free Trade Arrangements and

1.2 Mission Statement 1 Negotiations Currently Involving Kiribati 25

1.3 Objectives 1 5.2.1 Generalised System of Preferences (GSP) 26

1.4 Guiding Principles 1 5.2.2 World Trade Organization (WTO) and

1.5 Scope of Trade Policy 2 Basic International Trade Rules 26 2. Country and Economic Context 4 5.2.3 Trade with the European Union 26

2.1 Country Background 4 5.2.4 Trade with Australia and New Zealand 27

2.2 Historical and Recent Economic 5.2.5 Trade Within the Pacific Islads 27 Performance 5 Policy Measures 29

2.2.1 Structure of the Economy 6 6. Breaking Down Barriers to Private

2.3 Employment 6 Sector Development in Kiribati 31

2.4 Analysis of the Balance of Payments 6.1 Overview of the Current State of and Trade 8 the Private Sector in Kiribati 31

2.4.1 Goods Imports 8 Policy Measures 32

2.4.2 Goods Exports 9 6.2 Creating the Space for the Private

2.5 Macroeconomic Policy 10 Sector through Reforming State Policy Measures 11 Owned Enterprises 32 3. Trade and Sustainable Development 13 Policy Measures 32

3.1 Trade and Health: 6.3 Company Law and Business Ensuring a Healthier Kiribati 14 Registration Reform 33 Policy Measures 14 Policy Measures 33

3.2 Inclusive Trade: Spreading the 6.4 Cooperative Development 33 Benefits of Trade to All i-Kiribati 15 Policy Measures 34 Policy Measures 16 6.5 Investment by i-Kiribati at Home 34

3.3 Trade and Environmental Sustainability 17 Policy Measures 35 Policy Measures 17 6.6 Encouraging Inward Investment to Kiribati 4. Trade Policy Instruments 19 – A Simpler, Quicker System 35

4.1 Restrictions on Imports 19 Policy Measures 36

4.2 Import Duties and Duty Exemptions 19 6.7 At the Border – Facilitating Trade 36

4.3 Fees and Permits for Import and Export 19 Policy Measures 37 Policy Measures 20 6.8 International and Domestic Shipping –

4.4 Restrictions and Taxes on Exports 20 Consistent, Reliable and Cost-effective

4.5 Other Trade Policy Instruments: Shipping 37 Anti-dumping, Countervailing 6.8.1 International Shipping 38 Measures and Safeguards 20 6.8.2 Domestic Shipping 38

4.6 Key Trade-Related Legislation 20 Policy Measures 38 5. Securing Kiribati’s Place in the Global 6.9 Air Services – Improving the Frequency, Economy 23 Reliability and Affordability of International

5.1 Overall Objectives for Kiribati’s Trade and Domestic Freight and Travel 39 Engagement with the World 24 Policy Measures 40

5.1.1 Expanding Market Access for 6.10 ICT E-Commerce and Trade 40 Kiribati-made Goods 24 Policy Measures 40 ~ TPF 2017-2027 iii

6.11 Competition and Consumer Protection 40 Figure 2.4: Imports and Exports, 1974 to 2016 8 Policy Measures 41 Figure 2.4.1: Share of Imported Goods, 2006-10 8

6.12 Standards and Quality Infrastructure System 41 Figure 2.4.2: Avg. Weighted Tariff Rates in FICs, 2015 9 Policy Measures 41

6.13 Intellectual Property 42 Figure 2.4.3: Exports 1996-2016 10 Policy Measures 42 Figure 2.5: Revenue, Expenditure, Deficits and

6.14 Land 42 Surpluses, Kiribati, 2007-2016 11 Policy Measures 43 Figure 3.1: Overall Framework for How Trade, 7. Linkages to Key Productive defined broadly as ‘Exchanges’ or ‘Transactions’ Sector Policies and Supply Capacity 45 between individuals, contributes to Development 13

7.1 Agriculture 45 Figure 3.2.1: Female (15+) Labour Force Policy Measures 46 Participation Rate in Sepected PICs 15

7.2 Fisheries 46 Figure 3.2.2: Unemployment: work-seekers Policy Measures 49 as percentage of labour force 15

7.3 Tourism 49 Figure 3.2.3: Total Employment by Sector Policy Measures 51 and Gender, selected sectors

7.4 Labour Mobility 51 (with gender ratio by sector in percent) 15 Policy Measures 53 Figure 3.2.4: Employment Type: South Tarawa

7.5 Deep Seabed Mineral Resources 53 and Other Areas 16 Policy Measures 54 Figure 5.1: Kiribati’s Broad Objectives from

7.6 Strengthening Domestic Supply Chains 54 Trade-related Partnerships and Agreements 23 Policy Measures 55 Figure 6.1: Number of Registered Businesses 8 Implementation, Institutions and per Island 31 Aid for Trade 57 Figure 6.1.1: Formal Sector Employment,

8.1 Timeframe for Implementation 57 2009-2016 32

8.2 Implementation of the Trade Policy Figure 6.5: Investment-Growth Cycle 34 Framework at the Broad Level 57

8.3 TPF Implementation Matrix 58 Figure 6.6: FDI Applications 35

8.4 Institutional Framework for Coordinating Figure 7.1: Trends in Exports of and Monitoring Implementation 58 Coconut Products, AUD ‘000’ (2004-2014) 45

8.5 Resourcing TPF Implementation Figure 7.2: Kiribati’s Exclusive Economic Zone 47 through Aid for Trade 59 Policy Measures 61 Figure 7.3: Visitor Arrivals to Kiribati by Purpose, 2000-15 50 Annex 1: Trade Policy Framework Implementation Plan 63 Figure 7.4: Seamen’s Remittances, 2000 to 2016 52 Figure 8.1: Institutional Structure for List of Figures Implementation of the TPF 59 Figure 1.1: Map of the Trade Policy Framework List of Tables and Relationship to the KDP 2 Table 2.1: 2015 Census Data on Employment Figure 2.1: Map of Kiribati 4 in Kiribati 7 Figure 2.2: Long term economic growth performance Table 4.1: Key Trade-related Legislation 20 of selected PICs (in constant 2010 USD) 5 Table 5.1: Summary of Kiribati’s Market Access Arrangements with the World 25 Figure 2.2.1: Composition of GDP by Industry 2014 6 Table 5.2: Policy Measures on Trade Negotiations and Agreements 29 Figure 2.3: Public and Private Sector KPF Contributors, Kiribati, 2009-2016 7 Table 8.1: AfT Activity by Donor (2011-15, total) 60 iv TPF 2017-2027 TPF 2017-2027 v Acronyms ACPS African, Caribbean and Pacific GSP Generalised System of Preferences MEHR Ministry of Employment and RERF Revenue Equalisation Reserve Fund States Human Resource. HACCP Hazard Action Critical Control Point RoO Rules of Origin ADB Asian Development Bank MLPID Ministry of Line and Phoenix HDI Human Development Inde RMI Republic of the Marshall Islands Islands Development AfT Aid for Trade HS Harmonised System RTA Regional Trade Agreement MYWSSA Ministry of Youth, Women, Sports AKL Air Kiribati Limited H&S Hub and Spokes Programme and Social Affairs RSE Recognised Seasonal Employer ALD Agriculture and Livestock Division ICT Information and Communication MSC Marine Stewardship Council SBM Seabed Minerals APTC Australia –Pacific Technical College Technology MSG Melanesian Spearhead Group SDGs Sustainable Development Goals ATHKL Amalgamated Telecom Holdings IMF International Monetary Fund MTC Marine Training Centre SIDS Small Island Developing State Kiribati Limited IP Intellectual Property MTEC Micronesian Trade and Economic SIS Small Island State AUD Australian Dollar ISO International Standards Community SMEs Small and Medium Sized BPC Business Promotion Centre Organisation NCDs Non-Communicable Diseases Enterprises BRC Business Regulatory Centre IUU Illegal, Unreported and NFP National Fisheries Policy SOEs State Owned Enterprises Unregulated CCFZ Clarion Clipperton Fracture Zone NIPS National Intellectual Property SOEMAU State Owned Enterprise Monitoring KCCI Kiribati Chamber of Commerce and CITES Convention on International Trade Strategy and Advisory Unit Industry in Endangered Species NLMP National Labour Mobility Policy SPC Secretariat of the Pacific KCMCL Kiribati Copra Mill Limited CLPB Central Land Planning Board Community NMTP National Maritime Transport Policy KCS Kiribati Customs Service CPSC Central Pacific Shipping SPMS South Pacific Marine Services NQP National Quality Policy Commission KDP Kiribati Development Plan SPS Sanitary and Phyto-sanitary NSO National Statistics Office CSDS Coconut Sector Development KIEP Kiribati Integrated Environment Measures Strategy Policy NSC National Shipping Council SPARTECA South Pacific Regional Trade and CSOs Civil Society Organisations KIT Kiribati Institute of Technology NTB Non-Tariff Barriers Economic Cooperation Agreement DBK Development Bank of Kiribati KFL Kiribati Fish Limited NTAC National Trade Advisory Committee SWF Sovereign Wealth Fund DFQF Duty Free and Quota Free KNSL Kiribati National Shipping Line NZ New Zealand SWP Seasonal Worker Programme DSM Deep Sea Mining KNTO Kiribati National Tourism Office OCO Oceania Customs Organisation TBT Technical Barriers to Trade DTIS Diagnostic Trade Integration Study KPA Kiribati Ports Authority ODA Official Development Assistance TFA Trade Facilitation Agreement DWFNs Distant Water Fishing Nations KPF Kiribati Provident Fund OECD Organisation for Economic TK Traditional Knowledge Co-operation and Development EBA Everything But Arms KSSL Kiribati Shipping Services Limited TPF Trade Policy Framework PAC Pacific Access Category EEZ Exclusive Economic Zone LDC Least Developed Country TTM Taiwan Technical Mission PACER-Plus Pacific Agreement on Closer EIA Environmental Impact Assessment LPIDS Line and Phoenix Islands TVET Technical and Vocational Education Economic Relations Plus Development Strategy and Training EIF Enhanced Integrated Framework PACPS Pacific African, Caribbean and MCIC Ministry of Commerce, Industry UN United Nations EPA Economic Partnership Agreement Pacific State and Cooperatives UNCLOS United Nations Convention on the ERP Economic Reform Programme PCA Post Clearance Audit MICTTD Ministry of Information, Law of the Sea EU European Union Communication, PICs Pacific Island Countries UNDP United Nations Development FAO Food and Agriculture Organisation Transport and Tourism PICTA Pacific Island Countries Trade Programme Development Agreement FIC Foreign Investment Commission USD United States Dollar MEA Multilateral Environmental PIFS Pacific Islands Forum Secretariat FICs Forum Island Countries USP University of the South Pacific Agreement PIPSO Pacific Islands Private Sector FDI Foreign Direct Investment VAT Value Added Tax MELAD Ministry of Environment, Lands and Organisation FFA Forum Fisheries Agency Agricultural Development VDS Vessel Day Scheme PNA Parties to the Nauru Agreement FSM Federated States of Micronesia MFED Ministry of Finance and Economic WCO World Customs Organisation PPP Public Private Partnership Development FTA Free Trade Agreement PSDI Private Sector Development MFMRD Ministry of Fisheries and Marine GDP Gross Domestic Product Initiative WHO World Health Organisation Resources Development GEF Global Environment Facility PSDS Private Sector Development WIPO World Intellectual Property MFN Most Favoured Nation Strategy Organization GLUP General Land Use Plan MHMS Ministry of Health and Medical PT&I Pacific Trade and Invest WTO World Trade Organization GNI Gross National Income Services QIS Quality Infrastructure System GoK Government of Kiribati MIA Ministry of Internal Affairs vi TPF 2017-2027 TPF 2017-2027 vii Foreword Executive Summary I am delighted to present the first Trade Policy Framework (TPF) for Kiribati. The TPF provides a clear codification of The TPF is the first integrated trade policy document on trade related matters in Kiribati. The policy fills an important the Government’s strategy towards using trade as a tool for creating wealth and prosperity for our people. gap in the country’s overall policy framework for economic transformation, which has so far relied on a horizontal treatment of trade issues coupled with some selected trade-specific measures. It sets out the importance of trade The TPF is in line with the development aspirations in Te Motinnano, KV20 and the Kiribati Development Plan (2016- for Kiribati as well as the overall mechanisms through which Kiribati can use trade as a tool for inclusive and 2019) which seek to promote economic growth, inclusive sustainable development and poverty reduction through sustainable development in line with national development strategies. the development of the private sector. The policy is an example of a planned, predictable and evidence-based policy informed by various consultations undertaken by the Ministry of Commerce, Industry and Cooperatives (MCIC) The TPF in the Overall Development strategy: The TPF is one of the national economic strategies and policies with technical and financial assistance from the Enhanced Integrated Framework (EIF) through the United Nations that seeks to create wealth and prosperity. The role of the TPF is to ensure that various trade related policies – Development Programme (UNDP). including but not limited to National Quality Policy, National Fisheries Policy, National Labour Migration Policy, Seabed Minerals Policy etc. – are not contradicting each other in regards to the national trade development agenda. The TPF has benefited from a series of consultations conducted from November 2016 with the private sector, In addition, the Policy also addresses certain trade policy issues which are not part of the other specific policies or Government Ministries, Agencies and Civil Society. The consultations included a successful validation workshop strategies such as the participation of Kiribati in the global economy through regional trade agreements like PACER hosted in June 2017, followed by consultations with the National Trade Advisory Committee (NTAC) where the final Plus, PICTA, SPARTECA, and EPA. draft of the TPF was discussed. The TPF promotes a balanced relationship between integration in the global economy and sustainable development. The TPF serves several important purposes. Firstly, the document pulls together recent policies and strategies to It also promotes a more transparent and predictable business environment and seeks to integrate SMEs, women, create a primary umbrella policy for the Government with regards to key policy measures that would foster and youth and the disabled – especially those living on the outer Islands – into the national development agenda. stimulate the development of trade. In summary, the TPF seeks to: This document does not obviate the relevant roles of the already existing policies, such as the National Intellectual a) Set and redefine Government Policy relating to international and domestic trade; Property Strategy (NIPS), the National Fisheries Policy (NFP), the National Transport and Maritime Policy (NTMP), b) Design appropriate complementary measures to improve the business regulatory and macroeconomic National Quality Policy (NQP) and National Labour Migration Policy (NLMP). Instead, the TPF selectively pulls environment; these documents together into one overarching framework, allowing implementation to be easily conducted and c) Increase investment in infrastructure to support trade development ; monitored. Secondly, the document fills a vital gap in outlining Kiribati’s strategy with regards to important trade d) Improve coordination of institutions responsible for promoting and regulating trade; policy issues which are currently not adequately covered in the existing Government Policy. e) Improve the institutional arrangements for implementing the trade policy agenda in Kiribati; The TPF will serve as a living document and will be amended as policy conditions change. The Government will make Constraints to be addressed in the TPF: In order to achieve the objective of TPF and reap the development annual assessments on the progress of the TPF and, from time to time, will make amendments to ensure that the benefits of growth in the private sector and improved trade performance, Kiribati will have to address multiple country’s trade policy continues to deliver the best development choices for the citizens of Kiribati. domestic constraints for firms to invest, develop new industries, produce and contribute to the development of trade. While Government has been implementing various measures to support the development of inter-island Through the implementation of this Trade Policy, we seek to foster the right trade and investment environment trade, domestic trade for local products is still constrained by limited supply capacity and producer market linkages, for the development of the economy and importantly, the growth and promotion of the key productive sectors poor marketing infrastructure and poor inter-Island connectivity. such as Fisheries, Coconuts and Tourism. The Government intends to develop these sectors through targeted and innovative policies which address key constraints to growth. In this way, we can foster a new and dynamic private Other constraints to trade and private development include the existence of outdated business laws, which are sector that creates wealth and prosperity for all citizens of Kiribati. incompatible with the current private sector and trade development regime, thus negatively impacting on the inflow of Foreign Direct Investment (FDI). As such, very few businesses participate in productive sectors like fisheries I would like to end by thanking all the partners, Government ministries, the private sector and civil society members and tourism on the outer Islands. Low participation in the productive sector implies limited supply capacity. who have contributed constructively in the development process and helped to bring this document to completion. Other sectors like Seabed Mining still remain unexploited. Exports are mainly concentrated on only a few primary products and few destination markets. Kiribati still faces market access challenges linked to Product Quality and I would like to give particular thanks to the EIF Secretariat and UNDP for financial support to allow the International Technical Standards for goods and services. The cost of doing business in Kiribati is relatively high, compared to Consultant, Mr. Danny Lui to undertake the TPF assignment. I would also like to acknowledge the technical support similar economies in the Pacific. of the Commonwealth Secretariat through the National Trade Advisor, Mr. Samson Odhiambo Awino, under the Hub and Spokes programme, towards the formulation of this TPF, as well as MCIC staff, in particular the Director Addressing the Constraints: The constraints will be addressed through various strategic policy measures. In order to for Business Promotion Centre (DBPC) and staff of the Trade Promotion Division at BPC. Without such continuous establish a framework for implementation, monitoring and evaluation of the TPF under each of the Policy areas, the support, this document could not have become a finished product. Policy sets out a rationale, underlying measures within each of the designated Policy areas, performance indicators and targets. The Policy attaches great importance to the promotion of social inclusion, gender equality and the Te Mauri (Health) Te Raoi (Peace) ao Te Tabomoa (Prosperity). avoidance of negative impacts on environment. Implementation Principles: In order to ensure that the trade policy is coherent and consistent with other policies, _______________________________________ the responsibility of TPF implementation will rest with the Government line Ministry which has the mandate for each specific policy, and monitoring of progress and consistency for the TPF will be the purview of the National Trade Hon. Atarake Nataara Advisory Committee (NTAC) in collaboration with the Ministry of Commerce, Industry and Cooperatives. In this way, Minister of Commerce, Industry and Cooperatives the TPF avoids duplication of work while ensuring coherence of the policy framework. The underlying principle is to mainstream trade policy objectives across Kiribati’s Policies. viii TPF 2017-2027 TPF 2017-2027 ix 1. Introduction 1.1: Vision The 20-year development blue print (KV20) seeks to foster inclusive trade and private sector development through fisheries and tourism as the key productive sectors among other existing sectors. The KV20 aims to increase exports, the volume of domestic trade and inflow of Foreign Direct Investment (FDI). The KV20 aims to ensure macroeconomic sustainability by developing sustainable tourism, inclusive sustainable trade and private sector development, promoting sustainable fisheries and marine development, as well as investing in human capital to enhance productivity and employment. Kiribati Development Plan (KDP) 2016-2019 also seeks to promote better education, better health and inclusive sustainable economic growth and development. The KDP seeks to foster equitable development in the context of geography and at the same time address the plight of marginalised groups including women, youth and disabled people. Bearing in mind the vision of KV20 and the mission of KDP, the TPF sets out the vision of the Government of Kiribati on how trade can be used as a fundamental tool for achieving the KV20 and the KDP. The vision of the Trade Policy is: A dynamic and competitive economy for equitable distribution of wealth and prosperity 1.2: Mission Statement The overall mission of the Policy is to facilitate the transformation of Kiribati into a competitive economy and strengthen its participation in both domestic and international trade with the ultimate objective of creating wealth and prosperity. 1.3: Objectives The TPF mission will be achieved through the following objectives: • Setting and redefining Government policy relating to international and domestic trade; • Designing appropriate complementary measures to improve the business regulatory and macroeconomic environment; • Increasing investment in infrastructure to support trade development; • Improving coordination of institutions responsible for promoting and regulating trade; • Improving the institutional arrangements for implementing the trade policy agenda in Kiribati; and • Mainstreaming trade into national development strategies and sector policies. 1.4: Guiding Principles The TPF is premised on the following guiding principles: • Strengthening the capacity to trade in local produce and foster international trade; • Mainstreaming trade into national development strategies and sector policies; • Coordinating the approach to the formulation and implementation of trade policies; • Conforming with the country’s obligations in regional and bilateral trade agreements; • Creating opportunities for all, including women, youth, disabled people and those on the outer islands; • Creating an enabling environment to support the development of the private sector through increased domestic and Foreign Investment; and • Creating value chain linkages to support the development of national and international trade in goods and services. x TPF 2017-2027 TPF 2017-2027 1 1.5: Scope of Trade Policy The TPF is broad-ranging and thematic in its scope, given that trade is a complex cross-cutting activity. The TPF firstly examines the trade and economic situation (Section 2) and then examines some key trade dimensions, including the relationship between trade and sustainable development, health, inclusive growth and environmental sustainability (Section 3). It further analyses the key trade policy instruments (Section 4). Section 5 of the TPF deals with Kiribati’s trading partnerships with the rest of the world, including current negotiations and other commercial arrangements. Section 6 of the TPF looks at a number of key enablers of trade including trade facilitation and border processes, international and domestic transport, local and foreign investment as well as quality standards and intellectual property regimes such as trademarks. Section 7 details the linkages between trade policies in key economic sectors including fisheries, agriculture, tourism, labour mobility and the blue or ocean-based economy. Finally, Section 8 looks at the implementation and institutional framework for ensuring that the TPF delivers on its goals. Figure 1.1 Map of the Trade Policy Framework and Relationship to the KDP Kiribati Twenty Year Vision (KV20) Kiribati Development Plan Economic Human Health Governance Growth & Infrastructure Environment Resources Poverty Dev’t Reduction Trade Dimensions (TPF chapter 2,3) Trade Enablers (TPF chapter 6) Trade & Trade & Facilitating Domestic Sustainable Sustainable Trade at the Investment Development Performance Border Trade, Trade, Health Trade Policy Framework Competitiveness Foreign Transport & Private Sector & Consumer Investment Linkages (TPF) Development Protection Trade, Competitiveness Trade, Health Quality Intellectual & Private Sector & Consumer Standards Property Development Protection Other Economic Sectors (TPF chapter 7) (Finance, etc.) Fisheries Tourism Labour Other (Blue Mobility Economy, etc.) 2 TPF 2017-2027 TPF 2017-2027 3 2. Country and Economic Context Kiribati faces significant challenges in participating in international value chains and the global economy. Exports of both goods and services are limited. Kiribati’s international competitiveness is best understood in reference to its

2.1 Country Background main challenges to participating in the global economy, which are well-known and include: The Republic of Kiribati, with a population of 110,136 (2015 Census), is one of the most isolated countries in the world. Situated on either side of the International Dateline, as well as north and south of the equator, it comprises Limited land Isolation from major Small Geographical and water of 32 coral atolls and 1 raised atoll spread across 3.5 million square kilometres of ocean, an area bigger than the markets and poor population and disbursement of supply for Caribbean Sea. More than 90 per cent of the population is concentrated in the Gilbert Islands, with over 50 per cent connections lack of scale population commercial use of those living in South Tarawa. Figure 2.1: Map of Kiribati Lack of investment Inadquate basic Insufficient Vulnerability to and a poor business infrastructure skills climate change environment Kiri1bati -- ~ngl Kiribati nevertheless enjoys several advantages, including an unspoilt and attractive natural environment, with significant under-exploited potential in tourism. It also has relatively large foreign reserves in the Revenue ~ IIMRSHA Aongt,lap Jamo l~LANDS Equalisation Reserve Fund (RERF), initially established by the UK colonial administration prior to independence. Kwajaleln Maloelap Additional advantages include a strong traditional culture among I-Kiribati, which promotes social stability and ~ Amo family welfare, high literacy rates, potential in fisheries and low-skilled services exports and the country’s vast ocean PaJmyr•Mol Kucaie Nam011k Jalult - = T i"e"r-..,"" in-. .i_ __ space containing untapped marine resources whose commercial value has yet to be determined. Tabuaetl'an Tutarrtari CENTRAL PACIFIC BASIN IKlrl 2.2 Historical and Recent Economic Performance Abarnama Nau l.i I Ba ru While some new opportunities have begun to emerge in areas such as fisheries and labour mobility, the basic Ba,naba. LI (oeean l ,} Tama _. c nderbur)' ..___ _ _ ___ structure and characteristics of the Kiribati economy outlined above have remained largely unchanged since 1979. M\::Keam re roAcl! , - . ls l.ind Overall, the broad macroeconomic environment for trade in Kiribati over the last 25 years has been progressive SOLOMON ISLANlS NI oro S tarbtJ Ck IB'larr,d towards achieving development goals, though its relatively volatile economic growth has been lower than its peers PHO- - :IX ISLA!NDS Nenu~ N ul on average. Alla u SANTACRUZ Cat'O lin i:i' ISLANDS Figure. 2.2 depicts that the real GDP per capita has risen by 50 per cent since 1990 in Samoa but has essentially van1tJ:ipua M"1'eo stagnated in Kiribati at levels similar to those recorded in the early to mid-1990s. Figure 2.2 Long term economic growth performance of selected PICS The total land area is only 811 square km. About 1,480 km east of the Gilbert Islands lies the Phoenix Islands, a (in constant 2010 USD) group of eight largely uninhabited low-lying atolls and reef islands. Further east are the Line Islands including Kiritimati, which is about 3,330 km from Tarawa. Kiritimati is the world’s largest atoll (388 square km), accounting 160 for almost half of Kiribati’s land area but only about 5 per cent of the population. 150 Samoa Although there is no extreme poverty, Kiribati is ranked 12th of 14 Pacific island countries and 137th in the world according to the UNDP Human Development Index (HDI) ranking. Illnesses associated with malnutrition exist, 140 Fiji particularly on the outer islands. While Kiribati is considered a low HIV prevalence country, it has one of the 130 highest HIV infection rates per capita in the Pacific with a total of 60 HIV infections for the period of 1991 to 2015. Tuvalu School enrolment is close to 100 per cent, but reporting of attendance is unreliable and the Figure masks other 120 shortcomings in the education system such as survival and retention rate at primary level. Kiribati has ranked highly PIC avg on the UN Economic Vulnerability Index since 1991, with a score greater than 70 per cent for most of these years. 110 Vanuatu 100 Kiribati 90 80 1990 1993 1994 1996 1998 1999 2001 2003 2005 2006 2007 2008 2009 2010 2011 2012 1991 1992 1995 1997 2000 2002 2004 2013 2014 2015 Source: World Development Indicators 4 TPF 2017-2027 TPF 2017-2027 5 In the near future, economic growth is expected to be around 3 per cent per annum, mainly reflecting the impact of Table 2.1. 2015 Census Data on Employment in Kiribati major donor projects. GDP per person in 2014 was AUD1,838, which is one of the lowest of all Pacific Island nations. At the same time, this still puts Kiribati among the better off countries within the United Nations Least Developed Total Men Women Country (LDC) grouping, and the UN expects that Kiribati will graduate from this group to become a Middle Income Agriculture 4104 2984 1119 Country by 2024. Public Administration 3521 2192 1329 Wholesale & Retail 3457 1749 1708

2.2.1. Structure of the Economy Fisheries 2708 2228 480 National accounts statistics show that while agriculture and fishing account for 23 per cent of production in Kiribati, Education 1940 595 1345 and manufacturing around 4 per cent, as in many other countries the largest share of output is generated by Transport 1233 908 325 services, including real estate, construction, finance, transport, wholesale and retail trade, and communication Health 977 289 688 (Figure 2.2.1). Handicrafts 919 74 845 Construction 846 784 62 Figure 2.2.1. Composition of GDP by Industry 2014 Hotels and Restaurants 659 263 396 Personal Services 646 245 399 Security Services 646 594 52 Other social services 1.4% Finance & Real Estate 381 192 188 Agriculture & Fishing 23.0% Source: 2015 Population Census Report. Kiribati National Statistics Office Complementary data from the Kiribati Provident Fund (KPF) on contributors to the KPF system show that the Government 28.6% number of private sector contributors has increased from 2,130 in June 2010 to 3,982 in June 2016, which depicts Mining & Quarrying 0.3% a rise of 87 per cent. The number of contributors from the public sector however rose from 6,789 in 2010 to 6,917 Manufacturing 3.9% in 2016 (Figure 2.3). Electricity, Gas & Water 0.3% Business services 1.0% Construction 8.7% Figure 2.3: Public and Private Sector KPF Contributors, Kiribati, 2009-2016 Real Estate 12.5% Wholesale & retail trade 4.2% Hotel & Restaurants 0.5% Transport & Storage 6.0% 14,000 Financial intermediation 6.1% Communications 3.6% 12,000 - 10,0CIO - ,. ,. . - -,. ..... - 8,000 Source: Kiribati National Statistics Office 6,000 4,000 - -

2.3 Employment 2,000 I :,: I- I- I- :,: I- :,: I- I- z I- u z ID ~ :i:: :i:: :i:: ~ c.. ~ ,c.. ~ c.. ~ c.. ~ c.. ;,;:I c.. ::; :':c: c.. u.J ::::, ::::, Table 2.1 shows that agriculture remains the largest employer in Kiribati, followed by public administration, u.J u.J u.J u.J u.J .,, u.J <( ::: u.J Cl <( <( :::e: "' <( :::e: "' <( :::e: "' <( :::e: "' <( :::e: "' <( :::e: ::: "' wholesale and retail trade and fisheries. Gender and geographical aspects of employment are analysed further in 2 009 2010 2011 20 1 2 2013 2014 2015 2016 Section 3. ■ GOV[RN ME NT ■ PR IVATIE Source: Kiribati Provident Fund 6 TPF 2017-2027 TPF 2017-2027 7

2.4 Analysis of the Balance of Payments and Trade The government recognises the possible challenges and operates a number of policies to lower the cost of imports. In this context, the government implemented tax reform in 2014 which led to the abolition of import duties and Kiribati is a trading nation, receiving significant levels of income from a variety of sources and purchasing significant the adoption of VAT, reducing all tariff rates to zero. Kiribati is therefore considered to be an open trading nation levels of goods and services in return. A feature of Kiribati’s overseas trade is that while Kiribati generates revenue in the Pacific (including Australia and New Zealand) alongside Hong Kong as shown in Fig 2.4.2. Kiribati however from abroad, the small size of the economy means that it relies heavily on imported goods to meet its essential recognises that there are further steps that can be taken to lower the cost of imports both at the border and in the needs. In order to finance its development needs and pay for goods produced domestically and overseas, Kiribati economy through trade facilitation policy measures. generates foreign exchange revenue in a number of ways. Actual exports of goods (shown in Figure 2.4) and services are small. In recent years, remittances from seafarers and workers overseas (e.g. on the New Zealand RSE scheme) Over the last 15 years, there has been a significant shift in the source of imported goods into Kiribati. At the turn were greater than the total value of exports sent abroad. Revenue from fishing licences has been a key source of of the century, the largest import source by far was Australia, followed by Fiji, Japan and New Zealand. Today, Fiji is foreign exchange, but can vary substantially from year to year due to the migratory nature of the fish stock. In the main source of imports ahead of Japan, China, Australia and Korea. Growth of imports from Fiji highlights the addition, the long term sustainability of the fishery sector depends on the success of regional stock conservation importance of regional trade relationships. The growth of imports from China also suggests a shift towards lower efforts. In addition, the Government in past years, has relied on withdrawals from the Revenue Equalisation Reserve cost goods, bringing benefits for consumers in terms of lower prices, when complemented with good corresponding Fund (RERF) although the long-term policy is to maintain the RERF at a constant level. Overall, the trade figures show policies related to consumer and product quality. that Kiribati needs to diversify away from vulnerable sources of foreign exchange (fishing licence revenues, aid and RERF income), towards increased remittances and exports of goods and services. Figure 2.4.2: Avg. Weighted Traffic Rates in FICs, 2015 Figure 2.4 Imports and Exports, 1974 to 2016 12 200,000 10.6 10 9.9 - 100,000 8 7.7 0 6 5.7 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 5.0 4 Exports Imports 2 1.9 1.3 0.0 0 Source: National Statistics Office Fiji Samoa Solomon Tonga Vanuatu Australia New Kiribati

2.4.1. Goods Imports Is Zealand The value of imports into Kiribati was AUD$118.9m in 2014, or around 57 per cent of the country’s overall economic Source: National Statistics Office output. The main imported goods are food items (accounting for 35 per cent of the total import bill), followed by fuel (25 per cent), machinery and transport equipment (15 per cent), manufactured goods (11 per cent), beverages 2.4.2. Goods Exports and tobacco and chemicals (Fig 2.4.1). Given Kiribati’s reliance on imports, small reductions in the cost of imported goods could provide greater benefits than even modest increases in exports from current levels. Analysis of exports from Kiribati is difficult due to limitations in the consistency and accuracy of the data. The key exports recorded over recent years have been coconut products, sea cucumber, shark fin and, in later years, fish Figure 2.4.1: Share of Imported Goods, 2006-10 (tuna) products. Receipts from coconut-related products however, have fluctuated in recent years. Crude materials 1% The exportation of fish began strongly after the establishment of Kiribati Fish Limited (KFL) in 2014. Oils & fats 1% Chemicals 5% The most accurate export statistics however, come from the industry itself. Recent statistics from Customs for the Crude materials 1% Beverages & tobacco 7% first eight months of 2015 suggest that fish exports (valued at AUD$2.2m from January to August) have begun to overtake coconut products (AUD$1.2m for the same period) for the first time in that year and have since increased further (Fig 2.4.3) Food 35% Manufactured goods Mach. & transport equip 15% Mineral fuels 25% Source: National Statistics Office 8 TPF 2017-2027 TPF 2017-2027 9 Figure 2.4.3: Exports 1996-2016 Figure 2.5: Revenue, Expenditure, Deficits and Surpluses, Kiribati, 2007-2016 16000 300 A$ Millions 253.3 14000 250 187.8 12000 170.6 200 10000 126.8 150 91.3 84.3 62.2 8000 100 61.4 67.4 69.6 6000 50 4000 0 2000 -50 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 -100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ■ Revenue ■ Expenditure ■ Deficit/Surplus ■ Coconut ■ Fish and Marine ■ Other ■ Re-exports Source: MFED Source: National Statistics Office The RERF also provides a financing function for recurrent deficits. At the end of 2016, the sovereign wealth fund, the

2.5 Macroeconomic Policy RERF, stood at AUD$868.1m. While RERF has been instrumental in supplementing recurrent deficits, strengthening the management of RERF is critical towards ensuring long term macroeconomic sustainability. Government has undertaken a number of important macroeconomic policy reforms in recent years in response to the poor growth performance and fiscal sustainability issues that arose in the years directly following the The TPF places the highest premium on a stable macroeconomic environment. A stable macro-economic Global Financial Crisis. This period saw a significant decline in the value of the RERF, falling revenues from fishing environment is the only way in which the confidence among investors and the public can be maintained. It also licences and from tax, underperformance from State Owned Enterprises (SOEs), as well as shortcomings in debt works in favour of the poor who tend to lose the most during periods of inflation. In this context, the Government management, leading to reductions in Government expenditures and unsustainable growth in fiscal deficit. will seek to manage expenditure prudently and provide the necessary resources to achieve sustainable economic growth. Fiscal measures to accelerate macroeconomic stability for long-term sustainable development will be In 2013, the Government adopted an Economic Reform Programme (ERP) that included the introduction of Value implemented, alongside measures to improve the gathering of statistics for managing and monitoring economic Added Tax(VAT), a reduction in import tariffs, commitments to reform the country’s underperforming State Owned development. Enterprises (SOEs), changes in the management of the RERF portfolio and improved debt management. These reforms also coincided with significant increases in fishing licence revenue under the Vessel Day Scheme (VDS), Policy Measures which together have resulted in a return to a positive fiscal balance for 2014 and 2015. This has allowed the Government to replenish the RERF. Large inflows of development assistance for the aforementioned infrastructure In order to maintain macroeconomic stability, the Government will: projects also provided a significant boost to growth performance in this period, resulting in strong GDP growth in 2015. • Continuously maintain and update the management of the RERF through regular monitoring of RERF asset performance and efficient utilisation of RERF assets; Kiribati has maintained consistent improvement in revenue generation since 2010. Total revenue in 2016 was • Increase Government revenue by maintaining and improving existing plans to expand the revenue base; and AUD$176.9m while expenditure was AUD$175.4m in 2016, resulting in a surplus of AUD$1.5m. This is higher than • Improve database collection and recording by strengthening the National Statistics Office’s (NSO’s) input and the total revenue generated of AUD$84.3m and the total expenditure of AUD$95.1m incurred in 2010 (Figure collections. 2.5). Generally, Kiribati has experienced relative fiscal stability over the years due to strong public expenditure, infrastructure development and the growth in revenue from fishing licences and the expansion of its revenue base through tax reforms associated with the implementation of VAT. 10 TPF 2017-2027 TPF 2017-2027 11 3. Trade and Sustainable Development Trade is essential for Kiribati’s long term sustainable development. The main channel through which trade supports progress towards achieving the Sustainable Development Goals (SDGs) is through its direct contribution to economic growth, and the incomes and livelihoods of I-Kiribati. Other important channels include the impact of trade in improving outcomes in areas of health, education, communication and convenience through which I-Kiribati can live their lives. Figure 3.1. Overall Framework for How Trade, defined broadly as ‘Exchanges’ or ‘Transactions’ between individuals, contributes to Development Enablers of Trade: Increased Skills, Transport Government and Connections, Revenue IT, Business Environment, Private Sector Development, Market Access, Increased Trade Facilitation, Exports: Intellectual Goods and Property Services Increased Production Increased Economic Increased Exchanges Investment (Trade) Economic Employment Growth and Development Complementary Policies Increased Domestic Higher Trade Improved Incomes Sector Policies: Fisheries, Agriculture, Labour Mobility, Tourism, Other Cheaper Imports Lower Costs Efficient trade through improved processes at the border are expected to lower the price of goods and services that are used every day by I-Kiribati, from food to hardware to mobile phones. Increased levels of trade – domestically and internationally – contribute to increased Government revenues, allowing the Government to provide services and infrastructure and reducing dependence on overseas aid. 12 TPF 2017-2027 TPF 2017-2027 13

3.1 Trade and Health: Ensuring a Healthier Kiribati 3.2 Inclusive Trade: Spreading the Benefits of Trade to All I-Kiribati Engagement in domestic and international trade should contribute to the healthy and sustainable development of Trade needs to generate economic growth that is sustainable and broad-based. In particular, the benefits of trade citizens of Kiribati. The Government’s overall stance is that exchanges of goods and services contribute significantly need to reach marginalised groups, including women, youth, disabled people and those on the outer islands. to well-being and sustainable development, and trade does not by itself lead to unhealthy outcomes. Nevertheless, Analysis of the 2015 Census shows that the participation rate of women in the labour force is around 58 per cent, there are concerns that an increase in consumer choices brought by greater availability of more convenient which is higher than other PICs but still below the average in developed countries (Figure 3.2.1). Figure 3.2.2 shows foodstuffs of poor nutritional value as well as tobacco and alcohol are contributing to poorer health outcomes in that unemployment among women (43.5 per cent) was significantly higher than that of men (33 per cent). the Pacific Islands, contributing to high levels of non-communicable diseases (NCDs) and premature death. Figure 3.2.1: Female (15+) Labour Force Figure 3.2.2: Unemployment: work- In Kiribati, the prevalence of NCDs is increasing, and consequently consuming an increasing proportion of the Participation Rate in Selected PICS seekers as percentage of labour force public expenditure towards the Health budget. The most common NCD is diabetes, with a prevalence rate of 15.7 per cent as shown in the most recent WHO Steps Survey in 2015. This survey also showed that 83.6 per cent of the population have three or more risk factors in developing NCDs1, an increase from 79.0 per cent in 2006. The World 100% IIII I I 50 Bank estimates that by 2040, the economic burden of NCDs in Kiribati will amount to 9.2 per cent of 2010 GDP and about 11 per cent of the effective labour force will be lost due to NCD-related premature mortality and disability. 50% Nationally, Government can encourage reduced consumption of unhealthy food products and promote healthy 0 alternatives through the taxation system, border controls (customs and biosecurity), the Food Safety Regulations Samoa Solomon Is. Kiribati Tonga Fiji Vanuatu Framework, the National Quality Policy Framework, other policies and investments to increase the supply and 0% Men Women availability of fresh local agricultural and fisheries products, and the adoption of regional and international conventions relating to trade and public health. Government has also developed a draft Food and Nutrition Security Policy, and a draft National NCD Multi-Sectoral Strategic Plan for a coherent cross-Governmental approach to NCDs. The Ministry of Health and Medical Services (MHMS) has also prioritised its efforts on NCD issues through Source: Population Census 2015 Source: Population Census 2015 interventions aimed at prevention and management. A comparison of the quality of employment – in terms of types of jobs – that women participate in, present a The Government’s overall policy is to ensure that international and domestic commerce is regulated in ways complex picture as indicated in Figure 3.2.3. Although women are more likely to be engaged in lower-value jobs which are consistent with public health objectives, with measures designed that conform to relevant international such as handicraft production, there are fewer women engaged in other lower-value areas such as copra cutting. obligations and through best practices. At the same time, sectors such as distribution (retail and wholesale) and finance are more gender-balanced. Government is an important employer of women, and women are much more likely than men to be employed in Policy Measures the education and health sectors. In addition to formal sectors of employment, women are also more likely to be involved in informal and unrecorded work. In order to promote the healthy and sustainable development of Kiribati’s citizens, the Figure 3.2.3: Total Employment by Sector and Gender, selected sectors (with gender Government will: ratio by sector in percent) • Ensure the trade policy is consistent with public health objectives and the country’s obligations in regional trade agreements relating to Sanitary and Phytosanitary (SPS) Measures and Technical Barriers to Trade (TBT); • Adopt and effectively implement the National NCD Multi-Sectoral Strategic Plan; and 5000 • Adopt and effectively implement the draft Food and Nutrition Security Policy. 27% ■ Men • Adopt regulatory measures to ensure public health objectives while ensuring such measures are in line with the 4000 38% 49% ■ Women country’s obligations in regional trade agreements. 18% 3000 69% 2000 26% 70% 92% 7% 60% 62% 8% 1000 49% 0 I I Wholesale &Retail Fisheries Public Admin Agriculture Transport Health Hotels and Rest’ts Personal Services Security Services Finance & Real Education Handicrafts Construction 1 Risk factors of developing NCDs include being categorised as overweight or obese, being physically inactive, eating less fruits Source: Population Census 2015 and vegetables, consuming tobacco and alcohol as well as having high blood pressure, blood glucose and blood cholesterol levels. 14 TPF 2017-2027 TPF 2017-2027 15 Levels of youth unemployment do not seem to be significantly different from that of older workers, but again the 3.3 Trade and Environmental Sustainability quality of jobs may be lower for those aged 15-24. With respect to women and youth employment, the challenge for Government is to ensure that these groups are provided with the skills needed to gain meaningful employment, Trade needs to generate growth that contributes to sustainable development, and efforts to increase trade need and to provide continued opportunities for them to use those skills which extend to labour mobility schemes. to go hand-in-hand with strong environmental policies. The linkages between trade and the environment occur in a number of dimensions, from Kiribati’s international relations, to on-the-ground efforts to manage resources Figure 3.2.4: Employment Type: South Tarawa and other Areas sustainably for future generations. The Phoenix Islands Protected Area (PIPA) in Kiribati is an important example of how trade depends on strong environmental policies that ensure conservation and protection of biodiversity. Internationally, Kiribati is at the forefront of global efforts to reduce climate change and its impacts on the planet 80.0% and is party to a number of regional and global conventions or multilateral environment agreements (MEAs). With respect to infrastructure, investments in renewable energy will reduce the need for the costly importation of fossil fuels, and ‘early adoption’ of new technology is one of the most effective areas for efforts on import substitution. 30.0% ■ Employee or Employer Managing urban development is a big challenge for Kiribati and requires investment in sanitation and waste ■ Self Employed management facilities. -20.0% ■ Subsistence South Tarawa Outside South Tarawa At the sector level, Kiribati’s economy depends heavily on environmental conservation. For instance, the country’s fisheries resource depends entirely on the preservation of species stock both at the national and regional levels. The agriculture sector requires careful conservation of scarce land and water resources, while tourism depends Source: National Statistics Office heavily on the preservation of Kiribati’s unique natural assets and overall environmental waste management. The Government has put in place the Kiribati Integrated Environment Policy (KIEP) that was launched in August 2013 In terms of outer island development, formal economic activity is presently concentrated heavily on South Tarawa and focuses on building capacity to respond and adapt to climate change, island biodiversity conservation and (3.2.4). Census data shows that although levels of unemployment may be higher in Tarawa (which may be due management, waste management and pollution control, resource management and environmental governance. to high levels of settlement there with more people seeking employment) the structure of employment is very The range of legislative instruments, strategies and policies available to Kiribati to pursue these goals are different for those with jobs. In Tarawa, more than three quarters of workers classify themselves as ‘employees’ outlined within the policy. These include a Kiribati Joint Implementation Plan on Climate Change and Disaster Risk while outside South Tarawa only one-third fall into this category, with half classifying themselves as ‘self-employed’ Management (KJIP) that was released in August 2014 and is currently under review. The overall Government policy and 15 per cent as ‘subsistence’. This reflects the difference in economic opportunities available between South is to ensure consistency between the trade policy and Kiribati’s policy objectives on environmental sustainability. Tarawa and elsewhere, and the fact that activities are more likely to be informal on the outer islands. There is a need to improve the economic situation of women given their direct contribution to the economy and Policy Measures the additional benefits that come from empowering women within communities and households. There is also In order to ensure consistency between the trade policy and Kiribati’s policy objectives on environmental a need to provide opportunities to Kiribati’s youth in order to develop their long-term skills and future pathways sustainability, the Government will: to successful employment. The key challenge is to develop economic activities on the outer islands, including the • Continue to implement new Trade Policy-related measures including an environment licensing system to Line and Phoenix group. In response to these issues, the Government is in the process of adopting key policies on support waste management and pollution control; gender and youth through the Ministry of Youth, Women, Sports and Social Affairs (MWYSSA). Government also • Adopt and effectively implement the draft waste management strategy and oil spill response plan; adopted the Line and Phoenix Islands Development Strategy (LPIDS) in 2015. The aforementioned strategies will be • Promote and support the use of sustainable renewable energy sources and energy efficiency; complemented by specific programmes targeting these populations, and also aligned to priority sectors which the • Establish a legislative and institutional framework to improve urban planning and design leading to more vibrant Government has envisaged in its 20 year vision development plan. local economic development; • Catalyse private sector movement towards a green economy, including small scale businesses; Policy Measures • Build the capacity to facilitate the notification and reporting requirements under existing waste and chemical- related conventions and MEAs; In order to enhance the development of inclusive trade, the Government will: • Ensure compliance with international conventions on trade in certain goods, e.g. Convention on International • Ensure the adopted Gender Policy provides economic and trade opportunities for women and people with Trade in Endangered Species of Wild Fauna and Flora (CITES); disabilities; • Support provisions in trade agreements that encourage consistency between trade and sound environmental • Implement women’s economic empowerment programmes in sectors where Kiribati has a comparative practices; advantage in line with the Government’s 20 year vision; • Undertake Environmental Impact Assessments for trade-related, investment or development projects in line • Ensure the National Youth Strategy provides economic and trade opportunities for youth; with international best practices; and • Implement youth economic empowerment programmes in sectors where Kiribati has a comparative advantage • Build greater technical capacity and awareness around the linkages between trade and the environment. in line with the Government’s 20 year vision; • Implement the Line and Phoenix Island Integrated Development Strategy 2016-36 objectives, focusing on trade and private sector development; and • Formulate and implement outer island and private sector development strategies related to the Gilbert Islands Group. 16 TPF 2017-2027 TPF 2017-2027 17 4. Trade Policy Instruments

4.1 Restrictions on Imports Import restrictions and prohibitions are implemented only on grounds of health, safety or security. The Customs Act restricts the import of: • Absolute or ethyl alcohol; • Earth, soil, loam, sand, mud, dust, clay, ashes, and similar substances from any source other than soil unless they are imported from Hawaii, Fiji, Solomon Islands or Australia The following items are prohibited from import: • Counterfeit coins • Food unfit for human consumption • Indecent or obscene goods • Prohibited animals • Matches containing white or yellow phosphorous • Goods manufactured outside of Kiribati bearing the name or trademark of anyone in Kiribati, unless the goods indicate the country of origin • Prepared opium or opium pipes • Goods bearing the emblem of Kiribati • Fictitious postage stamps • Dangerous knives • Imitation firearms • Gambling machines • Any goods illegal under Kiribati law

4.2 Import Duties and Duty Exemptions Following a decision taken by Government to reform the tax system in 2014 to replace import duties with VAT and excise taxes, all tariff rates have been reduced to zero. The current policy is to maintain the recently adopted zero tariff policy, which places Kiribati among the most open economies in the world. In the event that tariffs are reinstated at some point in the future, duty exemptions will be applied in an efficient, non-discriminatory and preferably non-discretionary way.

4.3 Fees and Permits for Import and Export Licences and fees apply to importers of goods into Kiribati. The Ministry of Commerce, Industry and Cooperatives (MCIC) currently does not charge any fees for import or export licenses, nor does it charge any fees for inspection. The Ministry of Environment, Land and Agricultural Development (MELAD) requires traders who import goods into Kiribati to apply for a license by using an import permit application form. From the completed applications, those products which are allowed to enter will be granted an import permit, and the importer will be updated on any rejected consignments. MELAD charges AUD$5 inspection fee per container for empty containers only. No fees are imposed on the inspection of goods. The Ministry of Health and Medical Services (MHMS) does not charge fees for its services. Island and Town Councils impose licence fees on importers of goods under the Local Government Act 1984 (amended 2006). The importers pay these fees for each town that they operate in. j _., 18 TPF 2017-2027 • TPF 2017-2027 19 For exports, Kiribati Customs Enforcement Agency (KCEA) issues certificates of origin for the export of coconut oil Provides for consumer rights in purchasing goods and services. and fish products. The Ministry of Fisheries and Marine Resources Development (MFMRD) issues a license for the Empowers the Minister to prescribe by regulation, product safety or exportation of live fish as well as CITES certificates as a way to help protect endangered species. Fees are currently Consumer Protection Act 2001 and quality standards for any specified kind of goods and prohibits the based on species. Regulation 2004 supply or trade in goods in relation to which there is an approved standard. Policy Measures Insurance Act 1981 Provides for the setting up of an Insurance company in Kiribati. • Government will apply international best practice on the publication of all procedures and fees connected with import and export; and Provides aA scheme for collecting levies or charges on all imports in • Develop an import –Export handbook to guide exporters and importers. Import Levy (Special Fund) Ordinance order to pay for the freight to the outer islands, to ensuringe that 1977 imported goods sold on in the outer islands have the same price as

4.4 Restrictions and Taxes on Exports the imported goods sold on South Tarawa. Provides for the management and development of fisheries in Kiribati, Kiribati does not apply export restrictions, except for items which are illegal under Kiribati law, and there are no including the control of foreign fishing vessels. The Minister of export taxes. Exported goods require the usual documentation and clearances such as certificates of origin and FMRD is responsible for making appointments under this Act, which Sanitary and Phyto-sanitary Measures (SPS) certificates. Fisheries Act 2010 requires the formulation of management plans for each species of with amendments 2014, Fish Export fisheries resource. Amended in 2014, inter alia to create the Kiribati

4.5 Other Trade Policy Instruments: Anti-dumping, Countervailing Measures and Regulation 2012 Seafood Verification Agency (also called the Competent Authority) to Safeguards the legislation verifiesy the import and export of seafood and requires the certification of exports with certain requirements. Kiribati does not apply anti-dumping or countervailing measures. Kiribati does not apply safeguards, although it retains the right to increase tariffs where a surge in imports threatens a domestic industry. In the event that these Kiribati Ports Authority Act 1999 Establishes and regulates the KPA. are required, they will be imposed in line with international best practice and the country’s obligations under regional trade agreements. Shipping Act 1990 Inter alia provides for the appointment of a licensing officer for vessels. Provides for the management and control of goods entering the

4.6 Key Trade-Related Legislation Customs Act 2005 country. It The Act includes the a provision for setting customs duties. Given the cross-cutting nature of trade, a large body of legislation has the potential to affect it, both negatively and Provide detailed requirements for the import and export of plants positively. Table 4.1 provides an outline of most of the significant trade-related legislation which currently exists in Quarantine and Importation of animals and their products, as well as domestic surveillance and Kiribati. Animals Ordinances 1977 and control measures as well as the sanctions and mechanisms for Biosecurity Act 2011 enforcement. Table 4.1 Key Trade-related Legislation Specifies the membership criteria, the management of the funds, Co-operative Societies Ordinance and the auditing of the societies. The Registrar of Cooperatives is in Legislation Brief Explanation 1977 charge of the societies and is appointed by the Minister of Commerce , Industry and Cooperatives. Establishes the Foreign Investment Commission whose function is to assess foreign investment applications, approving investment value Provides for the appointment of inspectors, outlines their powers, Foreign Investment Act 1985 of up to AUD$ 250,000 and submitting the rest to Cabinet. Members Weights and Measures Act 1984 defines what weights and measures are to be used and outlines of the commission are mostly permanent secretaries drawn from key penalties in the any case of violation of these rules. technical ministries in charge of investment- related matters Food Safety Act (2006) and Food Puts in place the basic requirements and prohibitions as well as the This legislation is meant to protect industries in Kiribati which the Regulation and Standards (2014) powers and functions for the official control of food. government feels are critical for the country and therefore requires protection. The Cabinet and the President are empowered to declare Protected Industries Ordinance 1997 Provides for the protection of property and patent rights. Fines for any business, including foreign investment by any foreign enterprise Copyright Ordinance 1980 infringing copyrights are also detailed. or company, to be a protected industry. – Tthe Commission is not allowed to do this. Petroleum Act (1977), Public Utilities Regulates the importation, storage and sale of petroleum and its Ordinance (1977) and amendments This provides for thea legal basis on for land ownership, leassees, sub- products. Native Lands Ordinance 1977 2010 leases, neighbours and land purchasers. Price Control Ordinance Establishes mechanisms to impose price controls on goods These provides the legal basis for employment in Kiribati – employers’ Employment and Industrial Relations obligations and employees’ working conditions – with which all Code Act 2015, Occupational Health businesses operating in Kiribati must adhere to the under the Decent and Safety Act 2015 Employment requirements. 20 TPF 2017-2027 TPF 2017-2027 21 5. Securing Kiribati’s Place in the Global Economy Kiribati is a small island economy trading in an increasingly integrated global marketplace of more than 7.3 billion people. While this provides great opportunities for Kiribati to export goods, services and labour, Kiribati faces significant challenges in participating in global trade. Kiribati contains some of the most isolated locations on the planet and is physically very distant from major consumer markets in Asia, the Americas and Europe. As a small economy, Kiribati also has limited power to influence global markets and supply chains. Improving Kiribati’s position in the global economy will mean adopting a proactive approach to building strategic partnerships in trade and commerce. This means engaging in pro-development trade agreements and other commercial arrangements that secure maximum benefits for I-Kiribati in terms of market access for its main exports – in goods, services and labour – and much-needed investment to the economy. At the same time, Kiribati will need to minimise potential costs, incorporating safeguards against losses in Government revenue (where risks have reduced considerably following recent tax reforms) or in maintaining ‘policy space’ to pursue key development objectives. Figure 5.1 Kiribati’s Broad Objectives from Trade-related Partnerships and Agreements FTAs: EU, GSP(Global), LDC Access for International Fisheries Markets(EU, Exports, Japan, US, etc) Seafarers Arrangements: Seafarers, Fishery Agreement.etc. Investment, Aid for Trade Kiribati Investment, Labour Aid for Trade Mobility Regional Markets FTAs: SPARTECA Arrangements: PACER+, PICTA, Labour, Air & Sea MTEC Transport, Fishing c....-~--- 22 TPF 2017-2027 TPF 2017-2027 23

5.1 Overall Objectives for Kiribati’s Trade Engagement with the World 5.2 Preferential Free Trade Arrangements and Negotiations Currently Involving Kiribati

5.1.1 Expanding Market Access for Kiribati-made Goods As a developing country, Kiribati benefits from several preferential arrangements that give its exports Duty Free and Quota Free (DFQF) access to major developed country markets including the EU, Australia, New Zealand, the Securing long-term market access for exports is a general goal of any trade policy and is usually the subject of United States and Japan. Together with other Pacific Island Countries (PICs), Kiribati is also currently involved in complicated negotiations within multilateral or regional Free Trade Agreements (FTA). It is important to note the negotiation of a number of trade agreements that have the potential to strengthen and deepen its economic that market access depends not just on tariffs but extends to Sanitary and Phytosanitary (SPS), i.e. quarantine relationship with key partners and assist with integration into the global economy. These include the Economic requirements and other barriers which are now equally, if not more, important in the case of many goods. Partnership Agreement (EPA) between PICs and the European Union (EU), the Pacific Agreement on Closer Economic Relations (PACER) Plus between PICs and Australia and New Zealand. As a developing country, Kiribati’s exports also enjoy preferential duty-free access within regional and international markets. Some of these benefits depend on the fact that Kiribati is classified by the UN as a Least Developed Table 5.1: Summary of Kiribati’s Market Access Arrangements with the World Country (LDC). The impact of Kiribati’s potential graduation from LDC status as early as 2021, and the subsequent loss of these preferences, needs to be carefully assessed against the level of actual or potential future exports, and alternative arrangements available to Kiribati. Market Arrangement Coverage Implications for Kiribati Developed Current Generalised Non-reciprocal Coverage under some schemes The most important issue for Kiribati with respect to trade in goods is market access for fisheries products (most Countries System of with benefits may change if Kiribati graduates notably fresh tuna loins) that are processed onshore in Kiribati and sent overseas as Kiribati products. For these, (EU, US, Preferences (GSP) focused on trade from LDC status. there are a complicated set of factors that govern access for Kiribati tuna products in international markets and Japan) in goods affect whether they are more or less competitive than other potential suppliers. These factors include overall Global Kiribati is World Trade All aspects of Benefit of participating in global global supply and demand dynamics (which determine global price), the level of tariff advantage (or ‘preference’) not a WTO Organization trade: sets basic trade rule-making, although that Kiribati has over other exporters, the ‘rules of origin’ that apply to fish exports, and Kiribati’s ability to meet member (WTO) trade law, forum accession is a long process requirements in each market in terms of SPS, IUU fishing and other industry-imposed standards. for resolving currently beyond Kiribati disputes capacity In terms of the ‘costs’ of expanding market access, the main cost for seeking greater market access is the requirement European Under Economic Various potential Potential significant benefits for under free trade agreements for Kiribati to liberalise imports by lowering tariff rates. However, this is no longer Union negotiation Partnership scenarios improved access for fish a key factor for Kiribati given that tariffs have already been reduced to zero with the introduction of VAT in 2014. Agreement (EPA) including interim exports to the EU. Costs in or comprehensive terms of potential loss of policy

5.1.2 Expanding Market Access for I-Kiribati Workers EPA space. Australia Current SPARTECA Goods, non- Few implications as benefits are A key objective for Kiribati’s engagement with the rest of the world is to ensure increased access for I-Kiribati workers and New reciprocal limited. Kiribati will continue to overseas. This objective is supported by the KV20 which seeks to increase the number of overseas workers. The Zealand benefit from SPARTECA until current Kiribati Development Plan (KDP) 2016-2019, directly addresses issues around market access for I-Kiribati PACER-Plus enters into force workers in overseas markets, with a target of five new markets by the end of the KDP period. Signed by PACER-Plus Goods, services, Potential benefits in market Kiribati investment trade- access, labour mobility,

5.1.3. Looking Beyond FTAs to Other Commercial Arrangements related issues services, investment and Aid for Trade Some of Kiribati’s most important strategic partnerships at the international level have come not through traditional free trade agreements, but instead through strategic commercial arrangements in a range of areas. These include Pacific Current PICTA Trade in Goods Few costs and benefits at this long-term commercial relationships for seafarers with German companies and more recent success in securing Island Goods point greater economic benefits from managing regional fishing licences. Other examples of arrangements that have Countries Under PICTA Trade in Trade in Services Potentially important benefits a strong overlap with national trade objectives include the Recognised Seasonal Employer (RSE) labour mobility negotiation Services and and Regional on increasing access to Pacific scheme with New Zealand, and regional shipping through the Micronesian Shipping Commission . Regional Labour Labour Mobility labour markets. Potential cost Mobility of allowing selective access for PIC workers into Kiribati. 24 TPF 2017-2027 TPF 2017-2027 25

5.2.1 Generalised System of Preferences (GSP) 5.2.4 Trade with Australia and New Zealand As a developing country, Kiribati is eligible to benefit from the special schemes of leading trading nations, including a) South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) the European Union, United States and Japan. Preferences are granted to developing countries on a ‘generalised, non-discriminatory and non-reciprocal’ basis and as such the system is known in WTO law as the Generalised SPARTECA has provided Duty Free and Quota Free access for exports originating in PICs into the Australia and New System of Preferences (GSP). Kiribati has access to such GSP schemes even though it is not a member of the WTO Zealand markets on a non-reciprocal basis since 1981. However, it is generally acknowledged that few PICs have (see below). In some cases, Kiribati receives additional preferences by virtue of its status as an LDC. For example, the been able to benefit from the Agreement due to a lack of PIC export sectors and the stringent ‘rules of origin’. The duty-free access offered by the EU may be important for fisheries products. Most Kiribati exports take place under preferential access that PICs enjoyed under SPARTECA has also been eroded by the impact of trade liberalisation various GSP schemes. For example, recently Kiribati has been able to export fish to the United States, EU and Japan by Australia and New Zealand. Kiribati is a party to SPARTECA and the Agreement will remain in force until such a under their respective GSP systems. time as another agreement (such as PACER Plus) comes into force.

5.2.2 World Trade Organization (WTO) and Basic International Trade Rules b) Pacific Agreement on Closer Economic Relations (PACER) Plus Most trade rules incorporated into agreements to which Kiribati is a party or which it is currently negotiating are PACER Plus is a comprehensive trade cooperation agreement between Australia and New Zealand and the FICs, based on WTO Principles. Established in 1995, the WTO is the primary global organisation responsible for dealing which include traditional liberalisation commitments covering trade in both goods and services, alongside newer with international trade rules, including providing a forum for negotiating new rules and settling trade disputes. element such as investment and capacity building. To date, there are 164 WTO Members, including Australia, New Zealand and six of the largest PICs. While Kiribati is Negotiations that took place over several years concluded in April 2017, and Kiribati signed the agreement in June not a member of the WTO, it needs to comply with many of the basic international trade rules established at the 2017 alongside Australia and New Zealand and ten other PICs. Given the significance of Australia and New Zealand WTO. The main advantages to being a member of the WTO include having a voice on issues that could affect Kiribati as trading partners, the Government of Kiribati places great importance on PACER Plus, and will implement policy trade (such as new WTO rules on fisheries subsidies), and having access to the Dispute Settlement Mechanism. At measures to fast track the ratification of the agreement and facilitate the maximisation of development benefits the same time, to become a WTO member, it is necessary for an applicant to go through an often lengthy, resource- related to PACER Plus. intensive process. In some cases, that process could take more than a decade.

5.2.5 Trade within the Pacific Islands

5.2.3 Trade with the European Union a) Pacific Island Countries Trade Agreement (PICTA) Trade in Goods Kiribati’s access to the EU market was traditionally maintained alongside the African, Caribbean and Pacific (ACP) countries under various non-reciprocal preferential arrangements. However, the expiry of those provisions PICTA came into force in 2003 and provides for the gradual liberalisation of trade in goods among PICs, with PIC has meant that the EU and ACP States have been required to negotiate a new set of reciprocal regional trade developing countries such as Fiji required to phase out their tariffs by 2015 and PIC Small Island States (SIS) and agreements, known as Economic Partnership Agreements (EPA), which aim to maintain duty-free access while LDCs such as Kiribati by 2017. PICTA was initially intended to serve as a stepping stone for PICs to participate in the offering additional benefits that enhance trade integration. global economy and the establishment of a single regional market. Most PICs are party to PICTA. Kiribati ratified the Agreement in 2003, and has announced its readiness to trade under PICTA in 2017. Government will implement a) Economic Partnership Agreements the necessary measures to strengthen the capacity of the private sector to take full advantage of market access opportunities offered by PICTA. Kiribati has been participating actively in negotiations towards a Pacific-EU EPA since 2005. Two Pacific ACP states (PACP) have signed ‘interim EPAs’ (PNG and Fiji) primarily in order to maintain market access for their key exports. b) PICTA Trade in Services However, negotiations towards a final outcome have been challenging due to a number of contentious issues, including EU demands for PACPs to change their fisheries conservation and management measures, ‘global A Protocol to PICTA on Trade in Services was agreed in 2012. The objectives of the Protocol include, in particular, sourcing’ rules of origin for fisheries products, export taxes, the most-favoured nation clause and development promoting growth and development in the PICs and the reduction of poverty by, inter alia: (a) providing a framework cooperation assistance. for the progressive liberalisation of trade in services among the Parties and strengthening the capacity of the Parties to regulate trade; and Given that negotiating EPAs appear at this point unlikely to end in a ‘comprehensive EPA’ covering all aspects of trade, furthering economic integration in the Pacific region with a view to the eventual creation of a single regional market. the current policy issue is whether Kiribati should sign an interim EPA covering goods only. It is important to note that Kiribati will continue to benefit from the EU’s separate GSP-related ‘Everything But Arms’ (EBA) arrangement for Kiribati was one of ten PICs to sign the Protocol in 2012 but has not yet ratified it. To date, four countries have LDCs even if it does not sign an interim EPA. This provides Kiribati exports with Duty Free and Quota Free access to ratified the Protocol – Samoa, Nauru, Republic of Marshall Islands and Tuvalu. Six ratifications are required for the entire EU market on a non-reciprocal basis. Access to the arrangement will continue as long as Kiribati remains the Protocol to come into force. An essential part of the Protocol comprises the schedules of trade in services an LDC. Should Kiribati graduate to middle-income status, there may be a possibility to negotiate a transitional liberalisation commitments of each Party which set out the service sectors each PIC Party is willing to open to other extension of EBA preferences, but only for a limited period before Kiribati’s exports are subjected to potential PIC Parties, and under what conditions. tariffs under the EU’s standard GSP scheme. In this case, acceding to the interim EPA may be the best way to secure continued preferential market access for chilled tuna to the EU, if this remains an important policy goal at that point. 26 TPF 2017-2027 TPF 2017-2027 27 Government recognises the opportunity afforded by the Protocol to strengthen the economy and develop its Policy Measures trading capacity through expanding and deepening the local services sector as well as, over time, taking advantage of opportunities in other Protocol Parties for Kiribati’s own service providers. Government will implement policy In the area of trade negotiations and agreements, the Government will implement policy measures outlined in table measures to facilitate the ratification of PICTA trade in Services. Assistance will be sought where necessary for the 5.2 below. preparation of required regulations to give effect to Kiribati’s Protocol commitments. Table 5.2 Policy Measures on Trade Negotiations and Agreements c) PICTA – Temporary Movement of Natural Persons (TMNP) Regional negotiations among PICs, including Kiribati, are continuing on a TMNP scheme, the objective of which • Keep the possibility of seeking WTO membership under review while, for the would be to draw from labour surpluses in individual PICs to meet national skill shortages and stimulate skills immediate future at least, focusing attention on capacity-building and taking development throughout the region. As part of the negotiation process, labour market studies are to be prepared advantage of opportunities accorded by regional and other trade agreements to assist individual PICs determine their negotiating positions. WTO to which Kiribati is a party or currently negotiating. • Keep abreast of relevant WTO developments through the Pacific Office set up in A TMNP scheme has the potential of generating significant benefits in terms of opening new labour market Geneva through the Pacific Islands Forum Secretariat (PIFS) as a mechanism to opportunities for I-Kiribati within the region, although it needs to be assessed against other developments including influence WTO negotiations on issues of concern such as fisheries subsidies. PACER Plus and bilateral arrangements with specific FICs. The Government will analyse potential gains for Kiribati • Participate in WTO-organised capacity-building activities where possible. in enhancing labour mobility, given the PACER Plus agreement and the ongoing bilateral arrangements with Fiji and • Continue to explore the best market access options to the EU market that the Cook Islands among others. EPA provide sustainable and cost effective markets for its products. • Consider accession to IEPA based on a cost benefit analysis, taking into account d) Micronesian Trade and Economic Community (MTEC) existing market access and the implications of potential LDC graduation The Micronesian Trade and Economic Community (MTEC) is a sub-regional initiative focused on trade, economic PACER Plus • Implement policy measures to fast track the ratification of PACER Plus cooperation and integration among the Micronesian countries. While Kiribati is geographically and culturally agreement considered a Micronesian country, it is not currently a member of MTEC. • Implement Policy Measures to facilitate the maximisation of development benefits related to PACER Plus In recent years, the MTEC has evolved from an MOU-based cooperation and coordination arrangement signed in 2008, to a more formal Treaty arrangement signed in September 2014. The key provision of the MTEC Treaty was to PICTA Trade in • Implement measures to assist the private sector to take full advantage of establish a timeframe (of four phases of up to five years each), leading firstly to the creation of an economic union Goods PICTA Trade in goods. between the Member States: PICTA Trade in • Facilitate the ratification of PICTA Trade in Services (TIS) • Phase 1: Setting the rules, institutions, and infrastructure for preferential trade and investment; Services • Build the capacity of the private sector to fully take advantage of PICTA TIS. • Phase 2: Moving towards free trade and investment; • Phase 3: Harmonising trade and investment policies towards a customs union; PICTA TMNP • Analyse potential gains for Kiribati for TMNP, given developments in PACER • Phase 4: Realising a common market leading to an economic union Plus vis-à-vis developing bilateral arrangements with specific FICs to enhance labour mobility. The treaty also established a permanent Secretariat with its headquarters in Pohnpei in FSM. While the MTEC timeframe is ambitious, integration is made easier by the fact that the three current members are all Freely MTEC and SIS Policy • Undertake feasibility study on the potential benefits of MTEC in addressing Associated States with the US, and share a common currency (the US dollar). While the arrangement could help Kiribati’s development needs, especially in areas of Trade in Services and improve connectivity between members, the economic benefits of integration may be limited, given the similar Labour mobility. economic structures, the common challenges of isolation, and the limited scope to increase economic scale • Implement measures to facilitate free movement of persons among the SIS significantly among the group. In the recent past, Kiribati indicated their interest to become a member of MTEC. Future trade • Analyse potential export destinations with the view of ensuring cost effective Agreements market access opportunities. Government will support and watch developments in MTEC closely for any opportunities it may present to increase • Undertake cost benefit analysis for all envisaged FTAs or trade agreements trade and cooperation, while at the same time considering the context of its growing connectivity and economic to ensure that overall potential gains be the basis for participating in any ties with larger regional economies such as Fiji. In this context, Government will undertake a feasibility study on potential trade agreement. the potential benefit of MTEC in addressing its development needs, especially in the area of Trade in Services and Labour mobility. 28 TPF 2017-2027 TPF 2017-2027 29 6. Breaking Down Barriers to Private Sector Development in Kiribati

6.1 Overview of the Current State of the Private Sector in Kiribati A prosperous and wealthy Kiribati requires a vibrant, dynamic and efficient private sector. The Government, through the KV20, recognises the essential role of the private sector as the engine of economic growth. The KV20 seeks to develop an inclusive private sector through various policies. At present, the private sector is relatively underdeveloped in Kiribati compared with other countries, although it has seen some growth in recent years. A prominent feature is that the private sector activity is unevenly distributed across the country, with almost 80 per cent of businesses registered in South Tarawa, and a further 10 per cent in Kiritimati (Figure 6.1). Businesses in Kiribati are almost all SMEs. While there are approximately 2,000 businesses in the country, only two employ more than 200 people. Figure 6.1: Number of Registered Businesses per Island 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Abaiang Onotoa Nikunau Tamana Kiritimati Teraina Beru Arorae Tab South Tabuaeran North Tarawa South Tarawa Maiana Kuria Marakei Aranuka Nonouti Butaritari Abemama Tab North Makin ■ Number of Registered Business Source: MCIC Business Registry, 2017 Nevertheless, private formal sector employment has increased recently at a rate of over 12 per cent per year since 2010. As a result, the share of private sector employees in the workforce has grown from 24 per cent in 2010, to 35 per cent in 2017. However, the growth is far below the average in most countries, and means that almost two-thirds of jobs in the formal economy are still public sector positions. At the same time, formal sector employment as measured by Kiribati Provident Fund (KPF) contributors most likely underestimates overall engagement significantly in the private sector, due to the high level of informal sector activity in the country (Figure 6.1.1). There are more workers in the informal sector than in the formal economy. The 2015 Population Census suggests that approximately 60 per cent of Kiribati’s working population of around 25,000 are not KPF contributors. They work in occupations from copra-cutting to fishermen, to market stall workers and predominantly-female handicraft workers. 30 TPF 2017-2027 TPF 2017-2027 31 Figure 6.1.1: Formal Sector Employment, 2009-2016 6.3 Company Law and Business Registration Reform Businesses are the lifeblood of a dynamic private sector-led economy. In particular, SMEs are acknowledged worldwide as a driving force for economic growth because of their innovative and entrepreneurial nature. By taking steps to encourage the registration of existing private businesses, and the creation of new ones, Government 15000 can spur investment, create new jobs, and increase tax revenues. Moving businesses from the ‘informal’ to the 10000 ‘formal’ sector will also make it easier to put in place the right regulatory regimes for businesses in different areas, for example requiring certain operating standards, from proper account-keeping, to safety standards and the 5000 possession of insurance. 0 2009 2010 20 11 2012 2013 2014 2015 2016 For businesses themselves, there are numerous advantages and benefits that come with registering, including access to the formal banking system and institutions such as courts, the ability to sign contracts with other parties ■ KPF Public Sector Contributors (and therefore bid for supply contracts awarded by Government or other businesses) and the ability to import and KPF Private Sector Contributors export. Both owners of businesses and their employees will benefit, for example, from membership in the Kiribati Provident Fund. Source: National Statistics Office The Kiribati Doing Business Report 2017 shows that starting a business is slow, costly and administratively cumbersome in Kiribati. A diagnostic analysis of the company and business registration undertaken in 2014 Developing the private sector is closely linked to reforms and the overall business environment in Kiribati. SMEs recommended the need to implement measures to improve the business registration system. needs an environment in which Government involvement is limited to addressing market failures and fulfilling public policy goals. Where regulations are required, businesses rely on predictable, fair and cost-efficient processes Government has commenced the review of Company Law and the business registration system with technical and procedures being in place in order to make the correct investment decisions. In this context, there is a need to support from the ADB Private Sector Development Initiative (PSDI). Government will continue to implement policy implement measures to ensure that the voice of the private sector is fully represented in decision-making. A private measures to strengthen the business registration process with the view of improving the ease of doing business in sector consultative mechanism for public-private dialogue therefore needs to be strengthened Kiribati. Policy Measure Policy Measures In order to enhance policy coherence and the voice of the private sector, the Government will: In order to improve the business registration system, the Government will: • Strengthen the implementation of the existing public-private partnership dialogue between the Kiribati Chamber • Review Companies Ordinance 1979 and the Registration of Business Names Act 1988; of Commerce and Industry (KCCI) and MCIC to enhance policy coherence and feedback from the private sector • Consider the implementation of an online business registration system, bearing in mind the level of ICT on possible regulatory constraints. development; • Establish a single window business registration system; and

6.2 Creating the Space for the Private Sector through Reforming State Owned Enterprises • Develop an e-commerce policy and e-transaction legislative framework to support e-filing based on e-commerce evidence. A key overall issue for private sector development in Kiribati is the relationship between the Government’s role in the economy through State Owned Enterprises (SOEs) and issues around competition. The Government has

6.4 Cooperative Development adopted a policy of transferring less strategic SOEs to private ownership, while at the same time improving the efficie2ncy of the remaining ones through SOE reforms. Such reforms have been spearheaded by the SOE National Cooperative development can be a good vehicle through which the community can generate income and improve Monitoring and Advisory Unit (SOEMAU) under the MFED. Kiribati is now considered to be a leading reformer in the livelihood. Strengthening the performance of cooperatives can support the Government in achieving development Pacific on SOEs, as a result of such reforms. Some of the key policy challenges affecting the private sector in relation aspirations as envisaged in the KV20. Cooperatives can provide a good platform through which the community can to the management of SOEs are the universal VAT Exemptions of SOEs. The VAT exemptions are said to be giving exploit the opportunities in the productive sectors like Fisheries, Tourism and Coconut. undue advantage to SOEs in some sectors, where the private sector has substantive interest. The vision of the Government is to use cooperatives as instruments for promoting private sector activity and While the Government policy is to maintain some SOEs, there is a need to assess and implement Policy measures sustainable development, especially by enhancing their capacity to add value to products in the priority sectors that create a level playing field among SOEs to the extent that the public policy objectives are sustained. There is where Kiribati has comparative advantage. also a need to strengthen the performance of SOEs by having them operate on a more commercial footing. While there is significant potential in using cooperatives as a vehicle for sustainable development, the performance Policy Measures of the sector is constrained by poor governance, attributed to outdated cooperative-related legislative framework. In addition, 160 out of 200 cooperatives are copra agents, while 22 are primarily concerned with cargo and handling, In order to strengthen the performance of SOEs, the Government will: with only a few in the key productive sectors like fisheries and service-related industries. Another key challenge • Ensure State Owned Enterprises are on a more commercial footing through review and effective implementation is the lack of a National Cooperative Policy to act as a holistic framework to guide Government towards more of the SOE Act 2013; and sustainable development of the cooperative sector. • Review the VAT exemption policy to ensure a level playing field, while at the same time balancing the public policy objective for strategic SOEs in order to enhance a level playing field, especially in those sectors where the private sector can also play a significant role. 32 TPF 2017-2027 TPF 2017-2027 33 Policy Measures The Government’s overall policy is to encourage private investment through increasing opportunities and abilities to invest. In order to strengthen the development of cooperatives, the Government will: • Formulate a National Cooperative Policy that supports value addition and prudent management of the sector; Policy Measures • Review and effectively enforce cooperative-related legislations to enhance effective governance of the sector; • Implement financial literacy programmes which allow cooperatives to be transparent and prudent thus ensuring In order to foster domestic investment, the Government will: sustainability; • Design and implement financial inclusion programmes in line with best practice from other Pacific Island • Promote the establishment of cooperative in key productive sectors like fisheries, agriculture and other service- Countries; oriented sector industries; and • Enact financial sector legislation and establish an oversight institutional framework, considering Kiribati’s • Implement awareness programmes to encourage cooperatives to take advantage of various Government commitments under regional trade agreements; incentives to increase their capacity in value addition. • Review SME policy and regulatory framework towards the development of business services; Harmonise, develop and implement a specific financing scheme for SMEs in order to improve access to finance;

6.5 Investment by I-Kiribati at Home and • Implement business awareness programmes on the benefits of registering businesses to facilitate graduation Investment is the central building block of growth and prosperity, both for businesses and for Kiribati as a from informal to formal sectors, thereby widening the tax and revenue base as well as the coverage of whole. At a global level, rates of investment are closely linked to rates of economic growth and development. enterprises. Kiribati has experienced a low level of domestic investment over the years. Low levels of private investment and entrepreneurship are attributed to the high cost of finance and limited access to credit, particularly for low-income 6.6 Encouraging Inward Investment to Kiribati – A Simpler, Quicker System earners and those without formal sector salaries. Problems in accessing finance have a negative impact on business start-ups. Foreign Direct Investment (FDI) is an essential pillar in increasing private sector development and fostering economic growth. FDI can provide a source of much-needed capital to the country, which in turn finances the construction Domestic investors face specific types of constraints. Firstly, they require opportunities to invest, which in turn of physical facilities or the purchase of goods and services. FDI can also introduce essential skills and knowledge require growing markets and a predictable economic environment. Secondly, domestic investors are limited in their that cannot be found locally, such as specialist technical knowledge of particular industries or processes. Foreign ability to invest. They lack access to credit at a conducive rate of interest that would make investment attractive. investors can also bring a deep understanding of their own home markets as well as connections to international Finally, entrepreneurs also lack skills and know-how to grow their businesses, including how they can branch out value chains. FDI can lead to increased availability of new or cheaper goods and services that increases choice into new products and services as indicated in Figure 6.5. among consumers. Increased competition can create dynamic efficiencies to provide better services (for example in telecoms). Foreign investment generates employment for I-Kiribati, and the two largest private sector employers Figure 6.5 Investment-Growth Cycle in Kiribati are both foreign investments, i.e. Kiribati Fish Limited and ATHKL. Nevertheless, attracting foreign investment has been extremely challenging for Kiribati. Over the last few years, only 5 to 6 applications are received on average each year. The total number of foreign investments applications Greater demand for received between 2012 and 2016 was 29. Closer analysis of the available data also depicts that not all approved goods and Investment foreign enterprises are eventually established. For instance, out of the average total applications received every services year, only one or two foreign investments are actually established and commence operation Figure 6.6 FDI Applications Higher Received Approved Growth Incomes 10 5 Job Creation 0 2012 2013 2014 2015 2016 2017* Source: MCIC,*2017 Figures Jan-July 34 TPF 2017-2027 TPF 2017-2027 35 As a result, only 21 foreign companies are currently operating in Kiribati. In terms of ownership, seven of the foreign companies operate under a joint venture arrangement (either with Government or a private I-Kiribati partner) while fourteen companies are 100 per cent foreign owned. Foreign investment in Kiribati is regulated under the Foreign Investment Act 1985 (and subsequent amendments). The Act establishes a Foreign Investment Commission (FIC) made up of ten senior Government officials to assess foreign investment applications and related activities such as post-establishment monitoring of foreign companies. When appraising and evaluating the foreign investment applications (for investments of up to AUD$250,000) the Secretariat to the FIC relies on criteria set out in the Foreign Investment Act. The Government’s policy is to support the establishment of long-term, sustainable and bona fide foreign investment that is in line with its development objectives as envisaged in the KV20. In order to improve the inflow of FDI, the Government intends to develop a broad Investment Policy Framework to harmonise policies and regulations relating to foreign investment, including those relating to land and those regulating business activities, for example at the individual sector level, or at the local level. The Foreign Investment Act 1985 will also be reviewed to ensure that it builds investor confidence and is in line with international best practices and international obligations. Container Yard, Kiribati Ports Authority The key challenges are related to inefficiencies in trade facilitation due to a lack of integrated and inefficient trade Policy Measures clearance processes, procedures and systems which inevitably increase the country’s trade costs. Kiribati is party to regional FTAs like PACER Plus and PICTA, and so it needs to make domestic policy adjustments in order to effectively In order to attract Foreign Direct Investment, the Government will: implement its obligations under Customs procedures related to those agreements. While Kiribati is not a member of the WTO Trade Facilitation Agreement (TFA), its policy objective is to align its customs procedures with the WTO • Formulate and implement investment policy framework in line with KV20; TFA. • Review the Foreign Investment Act in line with the Investment Policy Framework; • Strengthen investment coordination mechanisms across relevant Government ministries and departments at Overall, Government policy is to implement measures aimed at reducing the complexity and cost of the trade national level, and the private sector as well as regional institutions to identify and develop investment plan in transaction process, streamlining trade procedures in order to reduce the risk and transaction cost and enhancing line with KV20; the efficiency, transparency and predictability of international trade as measured in time and money. • Increase funding and capacity within the Government to enhance investment promotion; • Implement investment promotion programmes through overseas missions, regional investment promotion Policy Measures agencies and other online promotion initiatives In order to achieve the above objectives, the Government will:

6.7 At the Border – Facilitating Trade • Develop a mechanism to ensure that all authorities and agencies involved in border and other import and export control points cooperate and coordinate in order to facilitate trade; The trade cost incurred by local exporting companies reduces their profitability and the amount they can in turn • Implement customs procedures that are aligned to the Trade Facilitation Agreement (TFA); pay local producers. The trade costs incurred by importers are ultimately borne by the consumer at the store. While • Adopt a trade facilitation system required by importing countries (i.e. TRACES System); and Kiribati abolished import duties and adopted the VAT system, costs relating to the shipment and clearing of goods • Implement policy measures to support the effective implementation of the country’s obligations related to are still considered high barriers to international trade. customs procedures in regional trade agreements. The lead Government agency involved in the clearance process is the Kiribati Customs Administration and

6.8 International and Domestic Shipping – Consistent, Reliable and Cost-effective Shipping Enforcement (KCAE), which is a division under the Ministry of Justice (MOJ). Other agencies that are primarily involved in the clearance process are the Quarantine division within the Agriculture and Livestock Division (ALD) Regular, reliable and cost-efficient shipping is essential for small island countries such as Kiribati, due to their of the Ministry of Environment, Lands and Agriculture Development (MELAD), the Ministry of Health and Medical dependence on it and to facilitate exports in sectors where Kiribati has a comparative advantage. Services (MHMS), the Ministry of Fisheries and Marine Resource Development (MFMRD), Kiribati Seafood Verification Authority, which is involved in the export clearance process for fisheries products, Environment Conservation Division (ECD) of the Ministry of Environment, Lands and Agriculture Development (MELAD), Kiribati Ports Authority (KPA) and the Ministry of Commerce, Industry and Cooperatives (MCIC). While KCAE is regarded as the key organisation involved with facilitation of trade, the respective individual agencies have their own regulatory environment where all individual border agencies have their own systems and processes to enforce their regulatory requirements. Kiribati does not have a single window system for trade clearance and trade facilitation. Lack of a single window system continues to be an impediment to trade as it creates unnecessary red tape and duplication of processes. Traditional Canoe Servicing the Lagoon in Buota 36 TPF 2017-2027 TPF 2017-2027 37

6.8.1 International Shipping • Adopt the Private Public Partnership (PPP) framework in developing the domestic shipping industry as recommended in the NMTP; Kiribati has been a member of the Central Pacific Shipping Commission (CPSC) alongside the Republic of Marshall • Implement policy measures including slipway, dry dock and other port facilities on the outer Islands that would Islands, Nauru and Tuvalu since January 2014. The CPSC regulates the provision of shipping services based on a support the operation of bigger vessels servicing the outer islands; ‘controlled competition’ model, with the intent to improve the reliability, affordability and sustainability of shipping • Implement measures to improve the shipping connectivity to the islets on the outer islands; and services. The Commission’s primary goal is to ensure central Pacific Islanders are able to access basic food items • Implement measures to improve transparency and efficiency in the implementation of the freight levy with a and other essential commodities to support their livelihoods and economic activities in a timely and affordable view to meeting the overall intended policy objective. manner, while providing an enabling environment for international shipping lines to succeed.

6.9 Air Services – Improving the Frequency, Reliability and Affordability of International Although the CPSC has been in operation for only three years, it has led to an increase in the number of calls by and Domestic Freight and Travel ships into Kiribati, and in the consistency and reliability of the service. As a result, onward connectivity has increased to international destinations, and facilitated intra-regional trade, contributing to a notable improvement in trade Air transportation plays a crucial economic and social role in Kiribati’s development. The future growth of fisheries performance. While the evidence with respect to reduced freight costs is more mixed, Government will continue to exports and the development of the tourism sector depend entirely on the availability of reliable and affordable monitor freight costs to ensure that the CPSC arrangement delivers competitive international freight rates. air freight and passenger services. Air transportation is essential in improving the participation of the I-Kiribati in various Labour Mobility Schemes. Connectivity of the shipping services is also essential for the integration of the

6.8.2 Domestic Shipping population living in the Gilbert Group and also providing a connection between the other widely-dispersed islands in the country. There are two international seaports in Kiribati, Betio and Kiritimati. Betio Port was first expanded between 1998 and 2000 with the provision of a reclaimed land area as a container yard. Betio Port was further developed between 2012 and 2014, through Japan’s ODA to accommodate berthing of international medium-sized container ships. KPA’s container yard at Betio is currently running out of space as the volume of imports has increased to AUD$14 Million. On the other hand, the port in Kiritimati is only good for use by small fishing boats due to sedimentation and coral regrowth within the channel connecting London Port to the open sea. The seaports on the outer islands exist only in the form of narrow channels cut through the reef-flat, with docks in only a select few islands, but mostly without proper facilities and equipment. As a result, shipping operations are inefficient, cumbersome and unsafe. In worst cases, vessels offload passengers and cargoes miles out at sea onto small outboard motor boats which then have to traverse the expansive reef flats to the shore. This operation is restricted to high tide, contributing to prolonged shipping turnaround times. In bad weather and rough seas, this kind of operation is extremely risky and cases of injury, death and cargo loss have been experienced. Domestic sea transport is largely dominated by the private sector though their presence is only prominent in Air Kiribati domestic aircraft, Tabiteuea North lucrative sectors. Kiribati National Shipping Line (KNSL), a Government-owned shipping company, focuses on providing shipping services to those routes not considered to be lucrative by private sector shipping services. Air transportation is also an important means for improving the availability of fresh produce within Kiribati, whether these are sourced from overseas, or to assist in the development of domestic markets for produce brought from Connectivity and accessibility to the outer islands from the capital (South Tarawa) is challenging due to inadequate the outer islands to population centres. Government services depend on air connections between the capital and infrastructure (wharves, ramps, piers and ports) and boat channels and passages. Other challenges to the domestic outer islands, while better connections would also boost the ability of private business to expand operations across shipping industry include a lack of published or advertised service schedules. Information problems mean that the the country. Finally, having national air transport infrastructure that meets minimum standards is also essential boats do not coordinate their during any relief effort response to a major emergency or natural disaster. activities in order to bring back agricultural produce, while many of the outer islands are inadequately served, There are two international airports in Kiribati (Bonriki and Kiritimati) and 19 domestic airports among the outer leading to cargo shortages from time to time. Strengthening the National Shipping Council (NSC) could help improve islands. Air Kiribati Limited (AKL) is the only airline servicing the domestic market in Kiribati. The Airline is 100% coordination in the shipping industry. Government owned. It has a fleet of four aircraft – one twin otter and three Y-12’s. Fleet capacity is insufficient to meet the current domestic demand for air services. This situation is compounded by the poor condition of runways The key challenge facing the Government is the need to improve connectivity and accessibility of shipping services and the lack of reliability of jet A-1 supply, both which cause occasional flight disruptions. There is one private in order to facilitate international and inter-island trade. company providing air services, but it does not play a prominent role in domestic air travel. Policy Measures There are three available routes for international travel through Honiara, Nauru and Nadi which are operated by single operators (Solomon Air, Nauru Airlines & Fiji Airways). Government recognises that the passenger and freight In order to improve connectivity and accessibility of shipping services, the Government will: capacity in air services are limited, unreliable and expensive. In order to improve transport connectivity through air • Continue the implementation of the CPSC agreement with the view of improving shipping services in the region transport, the Government intends to purchase Dash-8 aircraft to complement the existing domestic air services while assessing their long-term sustainability and impact on freight; and pave the way for international services. The Government will also explore options to increase the capacity for • Develop a legislative framework to reinforce the implementation of shipping schedules; international services and negotiate air service agreements with other countries to promote competitive air services and to widen international access in support of trade and labour mobility and eco-tourism as envisaged in the KV20. 38 TPF 2017-2027 TPF 2017-2027 39 Policy Measures Policy Measures In order to improve air transport connectivity, the Government will: In order to strengthen competition and the consumer regime, the Government will: • Increase freight and air passenger capacity through strategic air service agreements with neighbouring countries • Review price control regimes with a view to ensuring consistency with trade policy objectives while meeting and airlines on the basis of efficiency and sustainability of air services; intended public policy objectives; • Improve the capacity of domestic flights, including options for increasing the capacity of Air Kiribati; and • Implement policy measures to strengthen the implementation and monitoring of the Price Order; • Develop a storage warehouse facility at the airport to facilitate trade through Air Freight Services. • Consider the adoption of a comprehensive competition policy framework; • Review and strengthen consumer protection enforcement legislative framework in line with the National Quality

6.10. ICT, E-Commerce and Trade Policy (2017-2023); and • Implement consumer protection and awareness programmes for effective implementation of the legislation. The use of information and communication technology (ICTs) in commercial activities serves to enhance trade and investment facilitation by simplifying, harmonising and normalising processes in an effort to reduce delays, 6.12 Standards and Quality Infrastructure System bottlenecks and costs. As a result, e-commerce methods can serve to enhance trade as it can result in efficiency improvements, greater transparency and accountability and the reduction of costs associated with human interface As traditional tariff barriers have decreased around the world in recent decades, standards (including quarantine, requirements and human errors. The ability to electronically track and log transactions can also serve to minimise food safety and technical product standards) have emerged as some of the most important barriers to trade corruption, which can result from interaction between and among import/export stakeholders. While ICT presents in today’s trading environment. Any company with high ambitions needs to adopt and comply with relevant a good opportunity for facilitating e-commerce, the low percentage of internet penetration and lack of a policy international standards. The Government plays a key role in setting, promoting and enforcing standards for goods and regulatory framework to support the development of e-commerce is a major challenge. Other challenges and services across the economy, given the need for regulation and public infrastructure. In a context of globalised include limited awareness among stakeholders on the linkages between ICT and trade. The Government’s broader trade, the setting up and operation of an effective and credible Quality Infrastructure System (QIS) is therefore not development policy is to improve internet and mobile connectivity on the outer islands in order to realise key a choice but a necessity for Kiribati to participate fully in regional and international trade. development outcomes, which are related to the digital economy and specifically trade and e-commerce. While complying with international product standards can be costly, it can bring substantial rewards in international Policy Measures markets, most notably for Kiribati fish exports. Standards are also important for services including tourism, the food industry, light manufacturing and firm management. Better construction standards would improve the safety • Promote the use of e-commerce by the business community, taking into consideration their low level of of infrastructure and buildings in Kiribati, and a culture of applying international standards also creates benefits awareness, low level of access and usage of ICT; for construction workers if they seek overseas employment in line with KV20. Technical standards also play an • Implement measures to improve the internet and connectivity on the outer islands; and important role in mining, should Kiribati develop a seabed mineral industry. Finally, strong standards can play a key • Develop and effectively implement an e-commerce policy and regulatory framework. role in protecting domestic consumers.

6.11 Competition and Consumer Protection The Government adopted a comprehensive NQP in 2017-2023. The goal of the policy is to realise an effective national QIS capable of raising the quality of products and services, thus boosting the country’s export-led growth The Price Ordinance was enacted in 1981 as a regulatory mechanism to control the prices of essential commodities. while providing for better well-being among I-Kiribati. The NQP outlines a number of specific policy measures. In The overall policy intention of the Kiribati system is to ensure an adequate level of competition in the wholesale general, the Government policy is to establish and strengthen a national quality infrastructure system for more and retail markets for goods that are deemed ‘essential needs’ for daily living, while also responding to the reality reliable trading of goods and services, especially for priority sectors like fisheries and tourism. that achieving sufficient levels of competition is difficult given Kiribati’s circumstances of having many separate and isolated small island economies. Generally, the Government policy is to review and maintain price controls for Policy Measures essential commodities, while strengthening the monitoring aspects of the price controls. In order to strengthen the national quality infrastructure, the Government will implement policy measures with a On a broader level, many developing countries have now moved towards putting in place stronger competition laws view to strengthening infrastructure in the following aspects as recommended in the National Quality Policy (2017- as the key policy instrument to prevent firms from abusing their monopoly or dominant position. While enacting 2023): a competition law may be an option, this would require an increase in technical capacity to respond to complaints • Standards and Quality Promotion; and undertake investigations. In this context, the Government will undertake a cost-benefit analysis, based on a • Regulatory Framework; ; broad-ranging market assessment to understand the concerns that would justify a competition law. • Testing Laboratories; • Certification; Beyond competition issues, the Government will also strengthen the consumer protection framework by undertaking • Accreditation a review of the Consumer Protection Act 2001 and carry out specific awareness programmes. • Metrology; • Fisheries and Aquaculture; • Food Safety; • Agriculture and Environment; • Tourism and Culture; and • Education and Human Development 40 TPF 2017-2027 TPF 2017-2027 41

6.13 Intellectual Property leased lands from 100% landowners are major obstacles to private sector development in urban areas and, to a less extent, to the expansion of public services. Intellectual property (IP) is an increasingly important area of trade policy. At the global level, there is growing recognition that a significant share of the economic value created within particular supply chains comes not just Weak monitoring, enforcement and political governance challenges related to land ownership contribute to non- from manufacturing goods and producing services, but from their initial design as well as branding and marketing compliance of the general land use plan. Land scarcity, especially to support investment in South Tarawa, implies initiatives. Rights over the ownership of intellectual property which include works of art such as music and cinema, that there is a need for substantive investment in land reclamation. Lack of a national land policy and weak and traditional knowledge is increasingly subject to international rules to ensure that the owners of those rights are administration of the relevant legislative framework has significantly contributed to poor land use, especially for protected and rewarded for their work. commercial purposes, thus affecting the establishment of foreign and domestic investment. The Government recognises the need to establish and strengthen the intellectual property regime that creates Policy Measures economic value by protecting and rewarding owners of IP rights. Strengthening the national IP regime is expected to support the development objectives of the KV20, which seeks to attract investment and develop cultural capital. In order to increase land use and planning for commercial investment, the Government will: The Government adopted a National Intellectual Property Strategy (NIPS) in February 2017 to strengthen the • Review a general land use plan for Government owned land; intellectual property regime. The vision of the strategy is to achieve a modern, well-balanced IP system which • Undertake additional investment to increase land area for commercial purposes through land reclamation; and enhances inclusive sustainable and economic development and supports the country’s traditions and culture. The • Streamline procedures to standardise landowners’ consent for obtaining land for public use and private sector specific objectives of the strategy include: development. • Ensure that the existing legacy IP legislation is replaced and that new legislation reflects the national policy objectives of Kiribati; • Investigate and decide whether new areas of IP policy and legislation should be implemented to ensure that the whole IP approach in Kiribati reflects and supports its economic, social and cultural context; and • Identify and address the capacity and capability issues related to implementing a national IP system in Kiribati to ensure that the potential economic, social and cultural value of the national IP policy is supported and realised. Policy Measures In order to achieve the objectives of the IP strategy, the Government will implement policy measures with a view to strengthening the national IP regime in the following aspects, as recommended in the National Intellectual Property Strategy (2017-2023); Copyright Geographical indications Trademarks Traditional knowledge and cultural expressions Patents Capacity building of IP-related institutions

6.14 Land Land is a vital factor of production in the economy. The total land area is 811 km², of which 37 per cent is under customary land ownership and the remaining is state land, including all islands in the Line and Phoenix Group. The country’s population is heavily concentrated in the urban areas of South Tarawa, where 51 per cent of the population lives. The performance of key growth sectors of the economy and the attachment of the communities to land all affect access and utilisation of land in Kiribati. A large proportion of land in South Tarawa is leased by Government for a term of 99 years under the Native Lands Ordinance. A general land use plan for designated areas is determined by the Central Land Planning Board (CLPB) established under the Land Planning Ordinance. Land tenure in state lands such as Kiritimati, Tabuaeran and Teraina is governed by the State Lands Act, 2001, which combines land tenure with planning requirements for the sustainable use of land resources. Secure access to land can contribute to social and economic development and guarantees tenure which builds more confidence for investors, be they small or large. While improving land use is critical towards sustainable development, land scarcity, contesting of land ownership titles, and policy requirements in subleasing Government- 42 TPF 2017-2027 TPF 2017-2027 43 7. Linkages to Key Productive Sector Policies and Supply Capacity

7.1 Agriculture The agricultural sector faces significant challenges in Kiribati but plays an important role in sustaining livelihoods, most notably on the outer islands. Agriculture supports communities in two main ways. It provides income, supported by the traditional exports of copra and coconut products and secondly through widely-practised, small- scale production at the household level. Household level production also makes important contributions to food security, nutrition, well-being and healthy lifestyles. Looking forward, growth in this sector will be important in supporting the development of other sectors, notably tourism through sectorial value chain linkages. Figure 7.1: Trends in Exports of Coconut Products (AUD ’000’) 8000 6000 4000 2000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: National Statistics Office Agricultural exports have traditionally been limited to copra, coconut oil and coconut products. The coconut industry is subject to its own set of institutional and marketing arrangements that have been recently reformed. Exports of coconut products however, have fluctuated in recent years (Figure 7.1). A major influence on production has been heavy support from the Government through a copra subsidy scheme. The objective of the subsidy scheme is to maintain copra production, and to support the outer islands through ensuring employment and create a cash- based monetised economy in order to reduce rural urban drift and ensure equitable distribution of Kiribati’s income and wealth in order to support the KV20 Vision. While agricultural production is less productive due to limited land availability, poor soils and fragile water resources, there is room to improve production for crops and livestock in some selected outer islands. Possible crops may include coconuts, breadfruit, pawpaw, banana, pumpkin, giant swamp taro, pandanus and sweet potato. There is also potential in developing livestock through piggery and poultry. To date, commercialisation has been limited to a number of Government and donor-led initiatives and programs operating on a small scale that have provided local markets with eggs, vegetables and other small farm products. Most of the agricultural development programmes funded by FAO, IFAD and SPC have on-going projects on some targeted outer islands. The Taiwan Technical Mission (TTM) in particular, at times work together with European 44 TPF 2017-2027 TPF 2017-2027 45 Governments such as Germany, Netherlands, and Italy to fund programs mainly based on South Tarawa. There is Figure 7.2 Kiribati’s Exclusive Economic Zone a need to extend or replicate similar programmes on the outer islands with the potential of increasing agricultural production. While there is a need to support the development of the agricultural sector to improve domestic value chain linkages, there is no overarching agricultural policy to guide the development of the sector. As a result, responsibilities for different areas are shared between a number of different entities including between MCIC and industry participants for copra, the Agriculture and Livestock Division (ALD) of MELAD for agricultural production issues, and MCIC for domestic and International marketing. Efforts to stimulate the development of the coconut sector are constrained by a lack of integrated strategic framework to ensure sustainability in the production and supply capacity, product development, and marketing. Lack of a policy framework has contributed to poor coordination across Government ministries and private sector players. In this context, the Government intends to develop a coconut development strategy to provide a comprehensive and long-term response to addressing the critical factors that would impact the development of the coconut sector, with a view to ensuring significant impact at the community level. Currently MELAD, with the assistance of FAO, has developed a draft Food and Nutrition Security Policy. This draft Policy is awaiting Cabinet approval. The policy’s objective is to ensure food security through the accessibility, safety and good nutrition for I-Kiribati people. Overall, the Government recognises the need to implement a long-term policy in order to improve the supply chain and marketing of agricultural products from the outer islands to South Tarawa. Specific tools and policy measures to achieve such an objective would include improving the shipping links and the use of the Government’s domestic freight subsidies, improving market information as well as current Another key development in recent years has been a commercial joint venture by the Government of Kiribati, initiatives to develop open integrated markets for local produce from the outer islands near Betio wharf. Golden Ocean Fish of Fiji and Shanghai Deep Sea Fishing of China to establish the Kiribati Fish Limited (KFL) in 2012. KFL processes high-value fresh and frozen tuna (alongside swordfish and snapper) for export, with a fleet of Policy Measures twenty longliners, supporting around 300 workers directly as well as many more local fishermen suppliers through domestic value chain linkages. KFL started exporting in 2013 and has established export markets in Japan, the US In order to improve the performance of Trade, Agriculture and Value chain linkages, the Government will: and New Zealand. • Develop and effectively implement the Coconut Sector Development Strategy (CSDS); • Develop an agricultural policy which emphasises increasing supply capacity, agribusiness and commercial production; • Promote agribusiness and commercialisation of agriculture, including production of local fruits, livestock and vegetables and address transportation and logistics, marketing, etc; and • Review technical cooperation agreements on agriculture with development partners to ensure a greater focus on outer islands with potential for agricultural production.

7.2 Fisheries Taking into account the revenue generated by fishing licenses, recently commenced direct exports of Kiribati- processed tuna, production aimed for the domestic market and subsistence fishing, the fisheries sector represents by far the most important economic and trade sector for Kiribati. At approximately 3.5million sqkm2, Kiribati’s Exclusive Economic Zone (EEZ) is among the largest in the world. Offshore fisheries are primarily undertaken by industrial-scale vessels. Revenue derived from resource rentals to Distant Water Fishing Nations (DWFN) provides a significant proportion of Government revenue. Since 2014, fishing rights have been managed at the regional level under the Vessel Day Scheme (VDS), which has significantly increased the revenues from fishing licenses received by Kiribati. Nevertheless, the migratory nature of tuna means Seafood Verification Authority inspecting the fish quality that revenues are also prone to large fluctuations, while the VDS system itself is still in its early days of operation. Despite the obvious benefits to the local economy, current levels of fish exports of around eighty tonnes per month are still low in comparison with the revenue generated by fishing licences. KFL’s capacity to increase exports is currently constrained by a number of supply chain-related factors, including limited airfreight capacity and lack of facilities at the airport to facilitate exports. Expanding into the lucrative EU market will also depend on a number of market access-related factors including meeting SPS requirements and IUU regulations, maintaining the regime for preferential tariff access, and rules of origin (see section 5). 46 TPF 2017-2027 TPF 2017-2027 47 Domestic inshore fisheries include coastal and nearshore (reef and lagoon) fisheries and play a very significant role In addition to developing fisheries products, there is also potential for Kiribati to expand into greater provision of in providing food security, welfare, livelihood diversification and revenue generating options throughout Kiribati. services both for fishing vessels and leisure craft. Kiribati’s favourable location in the Central Pacific region, together This is especially important for Kiribati, whose land mass is only 800 km2, thereby limiting agricultural production with the fact that it lies outside the cyclone belt, make it ideal for the development of a transhipment hub. A and livelihood options. The most active commercial and artisanal coastal fisheries are based in South Tarawa transhipment hub will require developing the capacity of the jetty to be able to resupply, service and repair fishing as there is a significant market based there, although there is also smaller-scale commercial trade on Kiritimati and other vessels in the sub-region, including purse seiners, long-liners, small fishing vessels, ferries, inter-island (Christmas Island), where exports of tuna to Hawai’i are possible via air freight and where investment under the KFL transportation and pleasure vessels such as cruise ships and yachts. joint venture is eventually looking to extend its operations. Policy Measures In order to maximise returns from fisheries and marine resources, the Government will: • Implement the National Fisheries Policy (2013-2025) with an emphasis on ensuring food security and safety, sustainable livelihoods, long-term conservation and strengthening governance in the sector; • Implement non-discriminatory investment policy incentives to attract investors in the fisheries sector and marine resources like solar salt; • Develop airport facilities to support fish exports; • Invest in fishing vessels in order to meet the SPS regulations in export markets like the EU; • Work with outer islands in promoting investment in integrated catching and processing and facilitating exports of value-added fisheries products; • Implement policy measures to support the development of aquaculture; and • Implement policy measures to support the establishment of a transhipment hub in Betio and Kiritimati.

7.3 Tourism Tourism has significant growth potential in Kiribati and has been identified by Government as having the potential to provide employment and income generation, as well as supporting the retention of cultural traditions and the sustainable management of the nation’s environmental assets. In particular, the potential for developing Kiritimati (Christmas Island) as the country’s primary tourist destination highlights the chance to spread economic development and wealth beyond Tarawa. Over time, the development of tourism across the country can bring broader benefits as a source of dynamic economic growth. A healthy tourism sector can spur increased transport linkages, bring down costs of goods by enlarging the market, and similarly enable growth of other sectors such as fisheries and agriculture to service the tourism industry. Traditional fishing in lagoon Aquaculture of seaweed, milkfish and bêche-de-mer (sea cucumber) are also included in inshore fisheries, while aquatic fish and shells have promising niche export potential. Game fishing, which is currently the main attraction for tourists to Kiritimati, is closely linked to tourism development. The importance of inshore fisheries in providing food security in the form of fresh sources of protein and its value in import substitution is highly significant. Beyond fisheries, solar salt from Kiritimati has potential as another marine resource for export. Tabontekeke ECO-Resort 48 TPF 2017-2027 TPF 2017-2027 49 Figure 7.3 shows that out of a recent total of around 5,000 visitor arrivals, around 1,400 were for tourism purposes. While there are potential opportunities for developing tourism in line with KV20, there is no formal overarching Statistics from the Kiribati National Tourism Office (KNTO) suggest that there is a significant difference in the profile tourism policy or legislative framework to guide the development of the sector. The KNTO, which is located within of visitors who arrive on Tarawa and those who arrive on Kiritimati. Around 75 per cent of arrivals on Kiritimati are MICTTD, has responsibilities which include managing large portfolio of project-based infrastructure investments tourists (with a significant proportion of those from the US) who travel mainly for bone fishing, bird watching and and resultant recurrent expenditures (such as maintenance), as well as policy and regulatory functions in the areas surfing. of infrastructure, communications, and transport. Figure 7.3. Visitor Arrivals to Kiribati by Purpose, 2000-15 Source: Kiribati National Tourism Office Freshwater lake, Teraina (Washington Island) Other potential niche markets like the Phoenix Island Protected Area (PIPA) and other outer islands remain under- In addition, tourism development requires specialist knowledge of tourism value chains, coordinating the exploited. The I-Kiribati are known to be culturally and ethnically homogeneous with a shared genetic history, implementation of a range of different policies, and working with different stakeholders to support the cultural traditions, values, historical experience and language. Traditional knowledge and cultural skills are a rich development of Kiribati’s market internationally, as well as individual tourism businesses at the local level. In resource for Kiribati. Culture is implicit in the Kiribati community, although its intrinsic value tends to be overlooked. this context, there is a need to review where KNTO sits within the Government set-up for effective value chain While each island has its own cultural traditions and experience, economic value through cultural tourism remains linkages and implementation of tourism policies. unexploited. Policy Measures Marketing Kiribati to inform tourists on potential attractions and facilities also remains a key constraint to tourism development. Tourism promotion-related websites remain under-developed and information is outdated. A lack of In order to develop sustainable tourism, the Government will: dive operators also creates a major gap in the array of tourism products available. • Increase awareness of Kiribati and the yield for tourism products; • Implement measures to support the development of cultural tourism on the outer Islands; • Support investment in high yield tourism products; • Build tourism and hospitality human resource capacity within Kiribati; • Improve infrastructure connectivity and accessibility to support tourism; • Improve access to utility and social infrastructure to support tourism development; • Implement investment policy incentives to enhance business development in the tourism sector; and • Review where KNTO sits within the Government set-up to ensure it can most effectively coordinate and implement tourism policies, and compete for sufficient resources from Government.

7.4 Labour Mobility Kiribati has a long history of labour migration. Historically, a large number of I-Kiribati have been employed as seafarers. Kiribati’s Marine Training Centre (MTC) is a world-class marine training institution with many graduates employed in deck and engineering positions by the German shipping line South Pacific Marine Services (SPMS). In 50 TPF 2017-2027 TPF 2017-2027 51 2010, 12.8 per cent of households received remittances from seafarers and 18.3 per cent received other remittances. Finally, permanent migration flows to New Zealand have grown recently, as a result of the Pacific Access Category In recent years, the number of seafarers has declined due to the downturn in the world economy, a shift towards (PAC) Scheme introduced in 2002, which allows up to 75 I-Kiribati to go to New Zealand every year for permanent larger ships and increased competition from Asian seamen (Figure 7.4). Beyond shipping lines, I-Kiribati seamen settlement, provided they are able to secure a job within six months of arrival. have also built a strong regional reputation as crew in the marine and fisheries sector under access agreements which contain I-Kiribati crewing requirements, as well as through being engaged as stewards and as observers Beyond market access, Government recognises the key role an education policy plays over the long term in under the Forum Fisheries Agency’s regional fisheries monitoring scheme. improving ‘supply capacity’, and the potential of I-Kiribati to access decent employment opportunities at home and overseas. The Government, through the KV20, will implement measures to increase access to decent employment Figure 7.4 Seamen’s Remittances, 2000 to 2016 opportunities. The KV20 vision is to support effective implementation of the National Labour Migration Policy in order to increase the number of overseas workers and create new labour markets. Government will also implement policy measures aimed at improving levels of English proficiency at all levels. $14.0 1,200 Policy Measures $12.0 1,100 In order to increase decent overseas employment opportunities, the Government will: 1,000 • Implement the National Labour Migration Policy, which emphasises the promotion of decent employment $10.0 opportunities for domestic and overseas markets, including enhancing quality and adequate labour supply 900 '9 $8 .0 through training institutes; ~ 800 • Implement an education policy with emphasis on improving English literacy at all levels; and ~ $6 .0 • Strengthen the overall governance system in the recruitment of overseas workers. 700 $4.0 7.5 Deep Seabed Mineral Resources 600 $2 .0 500 Given that Kiribati has an Exclusive Economic Zone of 3.5million km2, the potential returns from mining of unexploited resources within the deep seabed has been the subject of increasing speculation over the years. The $0.0 400 seabed mineral sector could be an important pillar for realising Kiribati’s vision for exploiting its resources as a 2000 2002 2004 2006 2008 2010 2012 2014 2016 Large Ocean State. The interest in Deep Seabed Mineral (DSM) resources revolves around three highly sought-after types of mineral deposits, ranging from polymetallic nodules, polymetallic sulphides and cobalt rich crusts. Amoun t LHS Number RHS Source: SPMS Historical surveys in PICs have been conducted for seabed mineral resources, confirming the presence of manganese nodules, seafloor massive sulphite4, and cobalt rich crust (with such deposits in turn containing elements including A significant development in recent years has been access for I-Kiribati to seasonal work under New Zealand’s nickel, copper and titanium). Sitting several kilometres below sea level, such resources were previously inaccessible, Recognised Seasonal Employer (RSE), and more recently, Australia’s Seasonal Worker Programme (SWP). Kiribati but in recent years a combination of high demand and recent advances in mining technology have meant that however, faces competition from larger PICs with better resourced Departments of Labour, better end-to-end seabed deposits are already becoming an attractive and feasible proposition, with mining set to expand significantly processes and cheaper air linkages. Around 120-180 I-Kiribati have participated in the RSE each year, compared within the next few years. with 1,200 Samoans, 1,500 Tongans and over 3,000 ni-Vanuatu. Opportunities for I-Kiribati may increase if the RSE scheme is extended into the fisheries sector, which is currently being piloted. Current activity is focused in three areas: • Putting in place the legislative and regulatory framework; One important recent initiative is a five-year pilot Pacific Microstates-Northern Australia Worker Pilot Program to • Survey and exploratory work on mineral resources within the Kiribati EEZ; and provide up to 250 citizens (around 50 per year) from Kiribati, Nauru and Tuvalu access to a two-year work visa (with • Securing Kiribati’s rights under the United Nations Convention on The Law of the Sea (UNCLOS) to an area the option of applying for an additional third year) to work in less-skilled jobs in Northern Australia.3 beyond national jurisdiction located in the Clarion Clipperton Fracture Zone (CCFZ), situated in international waters, is also known as ‘The Area”, with work now underway to initiate exploration. Another initiative by the Australian Government was the establishment of the Australia-Pacific Technical College (APTC), offering scholarships to upgrade skills and gain internationally recognised qualifications. Around thirty I-Kiribati students each year have graduated from APTC with qualifications in areas including children’s services, youth work, aged care, disability, hospitality, tourism, hairdressing, automotive, electrical, carpentry, painting and tiling. However, most APTC graduates from Kiribati are unemployed due to limited opportunities for decent employment in the country and difficulty in accessing decent employment opportunities overseas. One challenge faced by I-Kiribati in competing in Australia and New Zealand labour markets is the comparatively low level of English language proficiency. There are linkages here to broader education policy, including ensuring full compliance with Kiribati’s existing policies for English to be used as the language of instruction from early grades. 3 www.dfat.gov.au/geo/kiribati/development-assistance-in-kiribati.aspx (accessed 3 June 2017) 4 It has not yet been confirmed that seafloor massive sulphite has been found in Kiribati waters 52 TPF 2017-2027 TPF 2017-2027 53 While there is potential to develop the seabed mining (SBM) industry, various challenges to the development of the sector in Kiribati include: • Proper administration of the emerging industry and maintaining a transparent approach while balancing access to data and information with protecting the rights of investors; • Sustainable environmental management; • Minimisation of social impacts; • Offering internationally competitive investment and fiscal conditions to attract investors, while safeguarding SBM revenues for the nation; • Sound revenue management practices and other social measures, that will benefit current and future generations; • Maintaining a sound regulatory framework in the EEZ and CCFZ; and • Maximising benefits of Kiribati SBM resources. Government recognises the potential contribution of seabed minerals towards the generation of revenue and sustainable development. To support the development of the sector, a comprehensive Seabed Minerals Policy has been developed. The Government has also enacted the Seabed Minerals Act for effective management of the sector. The key objectives of the policy include: • To strengthen regulatory and institutional frameworks to ensure that the DSM activities undertaken under Kiribati’s effective control comply with relevant international conventions and standards; • It has not yet been confirmed that seafloor massive sulphite has been found in Kiribati waters • To provide a conducive investment climate, fiscal regime and regulatory framework that encourages responsible investment in the country for the development of DSM activities in Kiribati without compromising the existing frameworks; • To maximise trade and economic benefits through sustainable DSM activities that will generate additional economic opportunities for Kiribati by way of creating employment and income for the people of Kiribati; Kiribati handicrafts • To ensure equitable sharing of benefits from DSM activities, including fair, equitable and effective distribution of benefits from royalties and taxes, employment, training and skills development, maximum local content and While the Government has implemented tangible initiatives to stimulate the evolution of the private sector technology, and knowledge transfer; and through the implementation of initiatives like the freight levy subsidy, linking producers to markets remains a • To protect Kiribati’s coastal and marine environment and other legitimate sea user (including customary major constraint to the development of the supply chain. The constraint to the domestic supply chain is however, and subsistence use, commercial fisheries, coastal and marine tourism as well as maritime transport and attributed to limited inter-island connectivity, poor marketing infrastructure where producers can store and sell communications) from the potential impacts of DSM activities. their goods, inadequate skills amongst private sector groups on supply chain management and a general lack of awareness amongst producers on the opportunities available within the domestic market for programmes put in Policy Measures place by Government to assist them. There is also a lack of awareness on how to make use of new technologies such as ICTs to facilitate domestic trade by improving buyers and sellers connectivity along the supply chain. In order to achieve the above objectives, the Government will: Policy Measures • Implement the Seabed Minerals Policy and legislative framework with the view of maximising revenue from the sector; and In order to strengthen the participation of producers in the domestic supply chain, the Government will: • Explore and exploit its stake in the Clarion Clipperton Fracture Zone while maximising opportunities for capacity building and access to benefit sharing from the Area. • Establish an open integrated market for local produce to enhance domestic trade; • Support investment in fruit processing and storage facilities like fish centres or ice making machines to reduce

7.6 Strengthening Domestic Supply Chains post-harvest losses; • Strengthen the capacity of business associations, cooperatives and their networks on production, supply chain Domestic trade can make a significant contribution to sustainable economic development. An efficient functioning management and marketing to enhance producer market linkages; domestic market with the active participation of women, men, the disabled and youth is essential for the welfare • Implement awareness programmes to encourage producers to take advantage of existing Government- of the population, as it would provide employment and income for I-Kiribati. A competitive marketing system will established incentives to promote domestic trade; and ensure efficient production and supply of domestic produce, especially from the outer islands where domestic trade • Implement policy measures to improve inter-island transport and ICT connectivity. is still fragmented. 54 TPF 2017-2027 TPF 2017-2027 55 8. Implementation, Institutions and Aid for Trade

8.1 Timeframe for Implementation This Trade Policy Framework (TPF) will be implemented over a ten year period from December 2017 to December 2027. The policy will have a mid-term review in 2022 to monitor progress and make possible adjustments in the strategies to ensure the set objectives and goals are achieved during the implementation period. The TPF will be implemented in line with the KV20, national development plans, as well as other Government initiatives and programmes. The Government will also ensure that programmes supported by development partners are well aligned with the TPF to ensure coherence with the objectives and overall vision. KV20 Development Partners Forum, Tarawa

8.2 Implementation of the Trade Policy Framework at the Broad Level Implementation of the trade-related policies highlighted in the TPF will first and foremost take place within the context of the respective policy statements and directions of the various Ministries and Divisions involved, and the wide range of strategies, action plans and work plans that they oversee. Long-term policy is outlined in various policy documents. This TPF is linked to these key policy documents where they exist, as well as highlighted where a formalised Government policy does not exist. The key medium-term tools are the four-year Ministerial and Divisional Work Plans, which are budgeted according to Kiribati’s normal Ministerial budget processes, with established lines of accountability and monitoring. In addition, for an increasing number of cross-cutting issues that involve several ministries, work plans are complemented by dedicated Government strategies or action plans where a lead agency coordinates closely with other agencies to advance a broad, cross-cutting policy agenda. One example of this is the National Labour Mobility Policy (led by MEHR, but involving numerous others). Private sector development and trade facilitation are clear areas where a cross-cutting approach is required. For trade issues, a number of such strategy documents already exist, including the Diagnostic Trade Integration Study (DTIS) Action Plan, the Enhanced Integrated Framework (EIF) work plan, the National Quality Policy (NQP) and the National Intellectual Property Strategy (NIPS). 56 TPF 2017-2027 TPF 2017-2027 57 The key to an effective trade policy is to ensure that trade concerns are properly mainstreamed within all the work of • Coordinate and review the implementation of resulting trade agreements; relevant Ministries and Agencies across Government and bilateral aid discussions. The trade mainstreaming efforts • Review the implementation of different agreements to which the country is a party, monitoring and evaluating will ensure greater policy coherence across the Government and whole of Government approach. Mainstreaming the impact of the results of the agreements to the country; can be achieved in three main ways: • Recommend strategies towards effective exploitation of trade opportunities at national and regional level; • Monitor and coordinate the implementation of donor-funded trade-related projects; • Mainstream trade into broader development strategies and sector plans; • Develop and recommend a national joint strategy towards mobilisation of Aid for Trade (AfT) funds; • Active participation by MCIC and other trade stakeholders in relevant working groups on trade-relevant issues, • Recommend formation of technical sub-committees where necessary; and to ensure that sector policies are aligned to broad trade policy goals outlined in the TPF. Active communication • Recommend and endorse Cabinet Information and Memorandum Papers on trade matters. is another way to ensure the mainstreaming of the trade policy across the Government and with the broader public; and The Secretary of Commerce, Industry and Cooperatives is the Chair of the NTAC, with the Trade Promotion • A coherent effort on the implementation of TPF recommendations, with a monitoring tool in the form of a TPF Division as the NTAC secretariat. The NTAC is conducted monthly. Given its existing role in the coordination and Implementation Matrix and a specific trade policy coordination mechanism in the form of the National Trade implementation of the TPF, the NTAC will regularly monitor and evaluate the policy implementation. Advisory Committee (see next sections). Beyond the main NTAC, a number of subcommittees and technical working groups already exist:

8.3 TPF Implementation Matrix • Intellectual Property sub-committee • Trade facilitation sub-committee Implementation of individual TPF recommendations will depend in large part on the actions of responsible Ministries • Decent work steering committee and Agencies. However, a coherent approach to trade will require a centralised and coordinated effort towards its • Tourism sector working group implementation. As such, a detailed Implementation Matrix has been developed to accompany the TPF, presenting • Quality Coordination sub-committee all of its recommendations in a single document and as such facilitating the coordination and monitoring of all of Kiribati’s trade-related policy goals in one place. The TPF implementation will ensure that all subcommittees and consultative mechanisms involve all stakeholders, including all of the relevant technical ministries, the private sector and Civil Society Organisations (CSOs). The TPF Implementation Matrix (Annex 1) contains the following information: • Policy area and measurement; Figure 8.1 Institutional Structure for Implementation of the TPF • A timeframe (where short-term means within three years, medium-term means within six years and long-term means beyond six years and up to 10 years); • Performance indicators; • The lead agency; and Cabinet • Potential source of funding. In order to ensure that the trade policy is coherent and consistent with other policies, the responsibility of the NTAC TPF implementation will rest with the Government line Ministries with the mandate where each policy falls, and the monitoring of progress and consistency with the TPF will be the responsibility of the National Trade Advisory Committee (NTAC) in collaboration with the MCIC. In this way, the TPF avoids creating duplication of work while ensuring coherence of the policy framework. The underlying principle is to mainstream trade policy objectives Sub Sub Committee Sub committee Committee across Kiribati’s policies.

8.4 Institutional Framework for Coordinating and Monitoring Implementation Government Private Government Private Government Private Sector and Sector and Officials Sector and Officials Officials CSOs CSOs CSOs Kiribati has already established a National Trade Advisory Committee (NTAC) to play a coordinating role across Government for trade-related policies. The core members of the NTAC are drawn from key line Ministries and trade- related Organisations. The main roles of the NTAC include:

8.5 Resourcing TPF Implementation through Aid for Trade • Ensure policy coherence in the various trade arrangements, both at multilateral and regional levels as well as domestic trade issues; In addition to Government’s own budgetary resources, securing donor funding available under the Aid for Trade • Assist in mainstreaming trade into national development goals and ensuring proper implementation of trade (AfT) initiative will provide an important additional resource for Kiribati to implement the policy goals outlined in policy objectives within the relevant ministries and bodies; the TPF. Aid for Trade (AfT) is a sub-classification of overseas development assistance (ODA), covering a range of • Provide strategic policy advice to the Government in relation to capacity-building needs and appropriate trade-related donor interventions falling under four broad categories: trade policy regulations, building productive institutional framework to handle the country’s regional integration agenda; capacity, economic infrastructure and trade-related adjustment. AfT projects range from large-scale infrastructure, • Review and endorse the overall development-oriented trade negotiation strategy and national positions; to assistance for trade facilitation (such as in customs and quarantine), to sectors such as agriculture, fisheries and • Facilitate the formulation and implementation of the country’s Trade Policy Framework, Trade tourism. It also covers trade policy formulation and implementation. • Development and Export Strategies; • Identify and commission trade-related sector studies; 58 TPF 2017-2027 TPF 2017-2027 59 Table 8.1 AfT Activity by Donor (2011-15, total) Policy Measures Reg’l In order to improve the institutional arrangements and maximise Aid for Trade resources for effective New EU World implementation of the Trade Policy Framework, the Government will: AfT Sector Aus Japan Devt UN Other Total Zealand Inst’ns Bank Banks • Strengthen existing multi-stakeholder consultative mechanisms to ensure that trade concerns are properly Transport & Storage 8.5 34.4 29.3 0.0 9.1 0.0 27.7 0.4 109.4 mainstreamed by Government for good trade development outcomes; • Explore and consider establishment of a Trade Act to support sustainability of key institutions such as NTAC, etc; Communications 5.5 0.3 1.1 0.0 0.0 0.0 0.7 0.0 7.6 • Enhance the capacity of relevant stakeholders on the development of technical AfT proposals; Energy 0.0 0.0 0.5 4.4 0.0 0.0 0.0 5.3 10.2 • Strengthen collaboration and partnerships with international organisations and development partners to maximise the benefits of AfT opportunities; and Banking & Finance 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 • Mainstream Aid for Trade in the Bilateral donor partnership arrangements and in the Development partner’s Business & Other 0.5 0.0 0.0 0.0 0.0 0.0 2.8 0.0 3.3 forums and dialogues. Agriculture 1.6 0.2 0.0 0.0 0.0 0.0 0.0 0.1 1.8 Forestry 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.1 Fishing 1.9 3.2 1.3 0.0 0.0 0.0 2.0 1.0 9.4 Industry 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Mineral Resources 0.0 0.0 0.0 1.2 0.0 0.0 0.0 0.0 1.2 Trade Policy & Reg’s 0.5 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.6 Tourism 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.2 Total 18.9 38.4 32.3 5.6 9.1 0.2 33.2 6.8 144.4 Share 13.1% 26.6% 22.4% 3.9% 6.3% 0.1% 23.0% 4.7% 100 % Source: OECD Creditor Reporting System, USD$m current Table 8.1 shows that, according to AfT Figures that have been reported and published by the OECD, around USD144m in AfT was delivered to Kiribati between 2011 and 2015. Key AfT donors included Japan, the World Bank, NZ, Australia, regional development banks including ADB and EU institutions. Allocations are influenced heavily by contributions to infrastructure development, including transport, communications and energy. Other sectors receiving support have included the fisheries sector, the business environment, agriculture and minerals. Going forward, donors are increasingly prioritising AfT in their assistance programmes, including areas beyond infrastructure. Opportunities therefore exist for Kiribati to request specific programmes to implement TPF recommendations. A key AfT project in support of trade policy implementation has been the Enhanced Integrated Framework (EIF) for Least Developed Countries (LDCs), a multi-donor programme involving UNDP, International Trade Centre, UNCTAD, World Bank, WTO and the IMF. Kiribati has already benefited under the EIF from support under its ‘Tier 1’ window for support in mainstreaming trade into national development plans, strengthening trade institutions and building capacity. It is currently in the process of developing proposals to access ‘Tier 2’ funds to finance priority catalyst projects to overcome supply-side constraints to trade and help develop sustainable export growth. Aside from the EIF, Kiribati has also benefited from the Commonwealth Secretariat‘s Hub and Spokes Programme through the deployment of the National Trade Advisor to support trade capacity building and policy implementation. As with ODA more generally, it is important for development support to ensure country ownership and policy space. Donor support to Kiribati should be tailored in line with national priorities, and resources used efficiently in line with the internationally agreed best practice principles in the area of aid effectiveness as outlined in the Paris Declaration and Accra Agenda for Action. 60 TPF 2017-2027 TPF 2017-2027 61 62 TPF 2017-2027

Annex 1: Trade Policy Framework Implementation Plan Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Trade and Macroeconomic Stability Continously maintain and update the man- agement of the Revenue Equalisation Reserve Macroeconomic Fund (RERF) through regular monitoring of Medium-term Improved Value of RERF MFED statistics MFED GOK Framework RERF assets performance and efficient utilisa- tion of RERF assets; Increase government revenue by maintaining and improving existing plans to expand the Short-term % Increase in Revenue MFED statistics MFED GOK revenue base Improve database collection and recording Improved National by strengthening the National Statistics Office Medium-term MFED statistics MFED GOK Statistics Office Indicators (NSO) input and collection. Trade ,Health and Public Policy Objective Ensure the Trade Policy is consistent with public health objectives and country’s obliga- National NCD Multi MHMS statistics, Trade and Health tions in regional trade agreements relating to Medium-term sectoral strategic plan MHMS WHO, UNDP, GOK publications Sanitary and Phytosanitary (SPS) measures endorsed by Cabinet and Technical Barriers to Trade. Adopt and effectively implement the National Number of policy actions MHMS statistics, WHO, EU, DFAT, Medium-term MHMS NCDs Multi-Sectoral Strategic Plan implemented publications MFAT Reduction in cases of MHMS statistics, Long-term MHMS WHO, EU, DFAT, MFAT NCDs publications Adopt regulatory measures to ensure public health objectives ,while ensuring such mea- Number and trype of poli- MHMS statistics, MHMS, OAG GOK sures are inline with country’s obligations in cy measures adopted publications regional trade agreements Food and Nutrition Adopt and effectively implement the draft MELAD periodic Medium-term Security Policy endorsed MELAD, MHMS FAO National Food and Nutrition Security Policy reports by Cabinet TPF 2017-2027 63 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Fostering inclusive Trade Economic empowerment Ensure the adopted Gender Policy provides for women and people GOK, UNDP, UNICEF, Gender and Trade economic and trade opportunities for women Medium-term with disabilities main- Gender Policy MWYSA UNWOMEN and people with disabilities streamed in the Gender Policy Implement women’s economic empowerment programmes in sectors where Kiribati has Medium-term % of women in business MFED statistics MWYSA GOK, UNDP comparative advantage in line with the govern- ment’s 20 year vision plan Youth economic empow- Ensure the National Youth Strategy provides erment programme main- Youth and Trade economic and trade opportunities for the Medium-term MFED statistics MWYSA GOK,UNDP streamed in the Youth youth Policy Implement Youth economic empowerment programmes in the sectors where Kiribati has Medium-term % of Youth in Business MFED statistics MWYSA,MCIC GOK,UNDP,ILO comparative advantage in line with the govern- ments 20 year vision Implement the Line and Phoenix Island Increase in number of Trade and Outer Integrated Development Strategy 2016-2036 businesses registered GOK,EU,DFAT,MFAT, Medium-term MCIC reports MLIPD Island Development objectives focusing on trade and private sec- in the Line and Phoenix ADB,WORLD BANK tor development Islands Formulate and Implement outer Islands trade Increase in number of and private sector development strategies Medium-term businesses registered in MCIC reports MIA GOK,UNDP related to the Gilbert Islands Group the Gilbert Islands Trade and Sustainable Environment Continue to implement new Trade Policy- Number of new trade pol- Trade and related measures including an environment icy measures established Medium-term MCIC records MCIC GOK Environment licensing system to support waste manage- to support waste manage- ment and pollution control ment Number of environmental Medium-term MELAD records MELAD GOK licences issued 64 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years cabinet endorses the Adopt and effectively implement the draft waste management strat- MELAD annual Waste Management Strategy and oil spill Short-term MARINE Division GEF egy and oil spill response report response plan plan Number policy measures MELAD annual Medium-term MELAD GOK implemented report Increase in share of grid Promote and support the use of sustainable Medium-term connected to renewable MISE reports MISE GEF renewable energy sources and energy efficient energy Increase in % of business- es incorporating climate Catalyse private sector movement towards Medium-term change and disaster risks MISE reports MISE, KCCI, MCIC GEF green economy ,including small scale business in their strategic and busi- ness plan Increase in number of businesses, including fish- MISE, MFMRD, Medium-term MFMRD, MICTTD GEF eries and tourism sectors, MICTTD reports adopting green initiatives Establish a legislative and institutional frame- Number of Bylaws, work to improve urban planning and design National Urban Policy NZ, ROC(TAIWAN), Medium-term MIA annual reports MIA leading to more vibrant local economic devel- Developed, Number of GOK, UNDP opment LED Projects implemented; Build capacity to facilitate the notification and MELAD annual reporting requirements under existing waste Medium-term Compliance reports MELAD, KCAE MFAT, DFAT, EU reports and chemical-related conventions Ensure compliance with international conven- tions on trade in certain goods e.g. convention Cabinet endorses acces- Medium-term MFMRD records MCIC, MELAD MFAT, DFAT, EU on International Trade in Endangered Species sion to CITES of Wild Fauna and Flora(CITES) Support provisions in trade agreements that Trade agreements signed encourage consistency between trade and Ongoing are consistent with sound MCIC records MCIC GOK sound environmental practices environmental practices TPF 2017-2027 65 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Undertake Environmental Impact Assessments for trade-related or development Environmental Assessment MELAD annual Medium-term MELAD GOK projects in line with international best prac- Reports report tices Build greater technical awareness around link- Number of Trainings Medium-term MCIC reports MCIC GOK ages between trade and environment undertaken Fees and Permits for Import and Export Develop an import –Export handbook to Import-Export Handbook Medium Term MCIC Website MCIC GOK,PT &I guide exporters and Importers Developed Apply international best practice on the pub- Publications uploaded on lication of all procedures and fees connected Medium-term Website link MCIC, MOJ GOK Website with import and export Securing Place in the Global Economy Keep possibility of seeking WTO membership under review while focusing attention for the immediate future at least on capacity building Number of New Regional WTO Membership and taking advantage of opportunities accord- Medium-term Trade Agreements signed MCIC annual report MCIC GOK ed by regional and other trade agreements to and ratified which Kiribati is a party or currently negotiat- ing Keep abreast of relevant WTO developments Number of Trade through the Pacific Office in Geneva through Negotiation position the Pacific Islands Forum Secretariat (PIFS) as a Medium-term MCIC annual report MCIC WTO, PIFS papers through PIFS office mechanism to influence WTO negotiations on in Geneva issues of concern such us fisheries subsidies Number of WTO-organised Participate in WTO-Organised capacity building Medium-term activities attended by MCIC annual report MCIC WTO, PIFS activities where possible Kiribati Number of WTO e-learning courses undertaken by MCIC annual report MCIC WTO Kiribati officials 66 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Continue to explore the best market access Sustained increase in EPA options to the EU Market that provide sustain- Medium-term MFED statistics MCIC/MFAI EU, GOK exports to EU able and cost-effective markets for its products Consider accession to IEPA, based on a cost Recommendations of benefit analysis, taking into account existing Medium-term the Cost Benefit Analysis MCIC annual report MCIC/MFAI GOK, EU market access, and the implications of poten- implemented tial LDC graduation MCIC annual Implement policy measures to fast-track the Short-term Kiribati ratifies PACER Plus report/Instrument MCIC, MFAI DFAT, MFAT ratification of PACER Plus agreement of Accession Implement policy measures to facilitate the Increase in exports to maximisation of development benefits related Medium-term MFED statistics MCIC DFAT, MFAT PACER Plus parties to PACER Plus Implement Policy measures to assist the pri- Increase in Exports to vate sector to take full advantage of PICTA Medium-term MFED statistics MCIC PIFS PICTA parties Trade in Goods MCIC annual PICTA Trade in Facilitate the ratification of PICTA Trade in Kiribati Ratifies PICTA Medium-term report/Instrument MCIC, MFAI PIFS Services Services. Trade in Services of Ratification Build the capacity of the private sector to take Trade in Services initiatives MCIC Annual Medium-term MCIC PIFS full advantage of PICTA Trade in Services implemented Report Analyse potential gains for Kiribati for TMNP, Recommendations of the given developments in PACER Plus vis-à-vis MCIC Annual PICTA TMNP Medium-term Analysis implemented/ MCIC/MFAI GOK,DFAT developing bilateral arrangements with specif- Report MOU Signed ic FICs to enhance labour mobility Implement measures to facilitate free move- MLHRD, MFAI, Medium-term MOU Signed MLHRD GOK,DFAT ment of persons among the SIS MCIC Undertake feasibility on the potential benefit Recommendations of the of MTEC in addressing Kiribati’s development MTEC Medium-term feasibility considered/ MCIC annual report MCIC/MFAI GOK needs, especially in areas of Trade in Services implemented/MOU signed and labour mobility TPF 2017-2027 67 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Analyse potential export destinations with the Sustainable and cost view of ensuring cost-effective market access Medium-term effective market access MCIC reports MCIC GOK opportunities identified Undertake cost benefit analysis for all envis- New trade agreements Future Trade aged FTAs or trade agreements to ensure that Medium-term informed by outcome of MCIC annual report MCIC GOK Agreements overall potential gains are the basis for partici- cost benefit analysis. pating in any potential trade agreement Strengthening Private Sector Engagement Strengthen implementation of existing Public/ Private Partnership Dialogue between the Policy Coherence Number of PP Dialogues/ Kiribati Chamber of Commerce and Industry KCCI website, MCIC and Private Sector Ongoing Number of agreed deci- MCCI, KCCI GOK and MCIC to foster policy coherence and feed- annual report Voice sions/actions back from private sector on possible regulato- ry constraints Number of position papers Dialogue outcomes KCCI KCCI submitted by KCCI Cabinet endorses new reg- Government MCIC GOK ulations Gazette Strengthening the Performance of SOEs Raise efficiency of Ensure State Owned Enterprises are on a more State owned enter- commercial footing through review and effec- Medium-term Profitability of SOEs SOE annual reports MFED GOK prises tive implementation of the SOE Act. Review VAT exemption policy to ensure a level playing field, while balancing public policy objectives for strategic SOEs to enhance level Medium-term New VAT Policy on SOEs MFED reports MFED GOK playing field, especially in sectors where the private sector can also play a significant role 68 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Improving Company Business Registration System Company Law Review Companies Ordinance 1979 and the New Business Names and and Business Short-term MCIC reports, PACLI OAG, MCIC ADB, GOK Registration of Business Names Act 1988. Company Act enacted Registration Reform Consider the implementation of an online business registration system, bearing in mind Short-term Online registry established MCIC website MCIC ADB, GOK the development of ICTs Establish a single window business registration Single window registration Medium-term MCIC reports MCIC ADB, GOK system system in place Develop an e-commerce Policy and e-transac- tion legislative framework to support e-filling Medium-term E-Transactions Act enacted MCIC reports MCIC ADB, EIF, GOK based on e-commerce, e-evidence E-Commerce Policy MCIC report MCIC UNCTAD endorsed by Cabinet Strengthening Cooperatives Development Formulate a National Cooperative Policy that Cooperative Cooperative Policy supports value addition and prudent manage- Short-term MCIC report MCIC GOK Development endorsed by Cabinet ment of sector Review and effectively enforce cooperative New Cooperative Act related legislations to enhance effective gover- Short-term MCIC report MCIC GOK enacted nance of the sector Implement financial literacy programmes Number of financial liter- which allow cooperatives to be transparent Medium-term acy programmes imple- MCIC report MCIC GOK and prudent thus ensuring sustainability mented Promote the establishment of cooperatives in key productive sector like fisheries and other service oriented sector industries TPF 2017-2027 69 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Implement awareness programmes to encour- Number of awareness age cooperatives to take advantage of various Medium-term programmes designed and MCIC report MCIC GOK government incentives to increase capacity to implemented add value Investment by i-Kiri- bati at home Design and implement financial inclusion pro- Fostering Domestic Increase in number of reg- ADB-PSDI, UNCDF, grammes in line with best practices from other Medium-term MCIC reports MCIC Investment istered businesses DFAT, MFAT Pacific Island States Enact financial sector legislation and establish oversight institutional framework considering Medium-term Financial Act in place PACLI MFED ADB, MFAT, DFAT Kiribati’s commitments under regional trade agreements Review SMEs policy and regulatory framework GOK, Government of Medium-term SME Policy developed SME Policy MCIC,DBK,MFED towards the development of business services India, UNDP Harmonise, develop and implement specific DBK reports, village ADB, India, Taiwan, financing scheme for SMEs in order to improve Medium-term Improved access to credit MCIC bank reports DFAT access to finance Implement business awareness programmes on the benefits of registering businesses to Increase in number of reg- facilitate graduation from informal to formal Medium-term MCIC reports MCIC GOK, UNDP istered businesses sectors, thereby widening tax and revenue base as well as coverage of enterprises Encouraging Inward Investment to Kiribati: A Simpler, Quicker System Attracting Foreign Formulate and implement investment Policy Investment policy frame- EIF, PT&I, ADB, World Short-term MCIC website MCIC Direct Investment framework in line with KV20 work endorsed by Cabinet Bank Review the Foreign investment Act inline with New investment Act enact- Medium-term MCIC website OAG ,MCIC EIF the Investment Policy Framework ed 70 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Strengthen the investment Coordination mechanism across relevant government min- istries, and departments at national level and Investment plan devel- Short-term MCIC reports MCIC GOK, PT&I the private sector as well as regional institu- oped tions to identify and develop investment plan in line with KV20 Increase funding and strengthen the capacity Increase in number of new GOK, PT&I ,IPA, ITC, within government to enhance investment Medium-term MCIC reports OAG ,MCIC investment applications UNCTAD promotion Implement Investment promotion pro- grammes through overseas missions, regional Increase in number of new GOK, PT&I, IPA, ITC, Medium-term MCIC reports MCIC investment promotion agencies and other investment applications UNCTAD online promotion initiatives At the Border: Facilitating Trade Develop a mechanism to ensure that all authorities and agencies involved in border Improving Customs Single window system and other import and export control points Short-term MOJ reports MOJ UNCTAD, TRADECOM Procedures adopted cooperate and coordinate in order to facilitate trade; Implement Kiribati’s customs procedures that Number of TFA related ITC, World Bank, are aligned to the Trade Facilitation Agreement Medium-term measures considered and MOJ reports MOJ UNCTAD (TFA) implemented Implement policy measures to support the effective implementation of the country’s obli- Number and type of policy OCO, DFAT, ITC, Medium-term MOJ reports MOJ gations related to customs procedures in the measures implemented UNCTAD regional trade agreements Trade facilitation system Adopt trade facilitation systems required by Medium-term aligned to EU TRACES MFMRD reports MFMRD EU, STDF importing Countries (i.e. EU TRACES System ) System Domestic and International Shipping Improved Continue the implementation of the CPSC Connectivity and agreement with the view to improve shipping Improved number of mer- Ongoing KPA records MICTTD GOK, SPC Accessibility of services in the region while assessing their chant Shipping Voyages Shipping Services long term sustainability and impact on freight TPF 2017-2027 71 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Develop a legislative framework to reinforce Regulatory Framework Short-term MICTTD records MICTTD ADB the implementation of shipping schedules enacted Adopt the PPP framework in developing the Equity in the distribution domestic shipping industry as recommended Medium-term MICTTD records MICTTD GOK of shipping services in the National Maritime Transport Policy Implement Policy measures including slipway, dry docks and other port facilities on the outer Improved port facilities on ADB, World Bank, Medium-term MICTTD records MICTTD Islands that would support the operation of the Outer Islands Japan, DTAF bigger vessels servicing the outer Islands Implement measures to improve the shipping Medium-term Improved Connectivity MICTTD records MICTTD GOK connectivity to the Islets on the outer Islands Implement measures to improve transparency Increase in the number of and efficiency in the implementation of the Medium-term freight levy beneficiaries MFED records MFED ADB, GOK freight levy with the view of meeting the over- per year all intended policy objective Air Transport Increase freight and air passenger capacity Improved through strategic Air Service Agreements with Connectivity and Efficiency and reliability of neighbouring countries and airlines on the Medium-term MICTTD records MICTTD,AKL GOK Accessibility of Air international air services basis of efficiency and sustainability of the air Transport Services services Improve the capacity of domestic flights, Efficiency and reliability of including options for increasing the capacity of Medium-term international of domestic MICTTD records MICTTD GOK Air Kiribati air services Develop a storage warehouse facility at the airport to facilitate trade through Air Freight Medium-term Improved airport facilities MICTTD records MICTTD,AKL GOK Services ICT E-Commerce and Trade Promote the use of e-Commerce by business community, taking into consideration their Medium-term Perception Survey MCIC reports MCIC GOK low level of awareness, low level of access and usage of ICTs 72 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Implement measures to improve the internet Medium-term % of penetration MICTTD reports MICTTD GOK and connectivity on the outer islands Develop and effectively implement an e-Com- E-commerce Policy Medium-term MCIC reports MCIC GOK merce policy and regulatory framework endorsed by Cabinet Competition and Consumer Protection Strengthening Review price control regime with a view to Number of price-con- Competition Regime ensuring consistency with trade policy objec- Short-term trolled products inline with MCIC records MCIC GOK and Consumer tives while meeting intended public policy the Trade Policy objectives Protection objectives Implement policy measures to strengthen the Reduced number of con- Short-term MCIC reports MCIC GOK implementation and monitoring of Price Order sumer complaints Competition assessment Consider adoption of a comprehensive compe- Short-term undertaken and report MCIC website MCIC GOK tition policy framework endorsed by Cabinet Review and strengthen consumer protection New Consumer Protection enforcement legislative framework in line with Short-term MCIC website OAG GOK Act enacted the National Quality Policy (2017-2023) Implement consumer protection and aware- Consumer Perception ness programmes for effective implementa- Short-term MCIC website MCIC GOK Survey reports tion of legislation Standards and Quality Infrastructure Implement policy measures to strengthen National Quality Infrastructure in the follow- ing aspects in line with recommendations in the National Quality Policy (2017-2023): Strengthening Number and type of policy Sector annual Standards and Quality Promotion; Regulatory SPC, MFAT, DFAT, EU, National Quality Medium-term measures implemented in reports, MFMRD, MCIC Framework, Testing Laboratories; Certification; SDFT, EIF, WHO Infrastructure the National Quality Policy CA, MCIC website Accreditation, Metrology, Fisheries and Aquaculture, Food Safety; Agriculture and Environment; Tourism and Culture; Education and Human Development TPF 2017-2027 73 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Intellectual Property Rights Implement policy measures with view to strengthen National Intellectual Property Regime in the following aspects as recom- Number and type of policy Annual sector Strengthening mended in the National Intellectual Property measures implemented; reports, MCIC web- MCIC, MIA, MFAI, National Intellectual Strategy (2017-2023): Copyright; Trademarks; Medium-term WIPO, GOK, UNESCO National ICH inventories site and cultural KIANGO, KCCI Property Regime Industrial designs; Patents; Geographical indi- implemented mapping reports cations; Traditional Knowledge and Cultural Expressions; Capacity Building of IP-related institutions; Improving land use and planning to Review general land use plan for govern- General land use plan in MELAD annual Short-term MELAD GIZ/SPC, EU support private sec- ment-owned land place report tor development Undertake additional investment to increase MELAD annual land area for commercial purposes through Medium-term Size of new reclaimed land MELAD MFAT report land reclamation Streamline procedures to standardise land- Native land ordinance MELAD annual owners’ consent for obtaining land for public Short-term MELAD GOK, DTAF, MFAT amended and enacted. report use and private sector development Agriculture and Supply Capacity Strengthening Develop and effectively implement the coconut Strategy endorsed by sectoral linkages Medium-term MCIC report MCIC SPC, IBSA Facility sector development strategy Cabinet through agriculture Develop an Agricultural policy with emphasis Strategy endorsed by on increasing supply capacity, agribusiness Medium-term MELAD report MELAD FAO, IFAD Cabinet and commercial production Promote agribusiness and commercialisation of agriculture ,including production of local Increase in domestic trade Medium-term MCIC statistics MELAD FAO, IFAD fruits, livestock and vegetable and addressing for local produce transportation and logistics ,marketing etc. Review technical cooperation agreements Number of new technical on agriculture with development partners to programmes established Medium-term MELAD report MELAD Taiwan, FAO, SPC ensure greater focus on outer Islands with and implemented on outer potential for agricultural production islands 74 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Fisheries and Supply Capacity Implement National Fisheries Policies (2016- Maximising returns 2025) with an emphasis on ensuring food from sustainable Number and type of policy security , safety sustainable livelihood; long- Medium-term MFMRD report MFMRD GOK fisheries and marine measures implemented term conservation and strengthening of gover- resources nance in the sector Work with outer islands in promoting invest- Increase in number of ment in integrated catching and processing MFMRD, MIA, Short-term investments in the sector MFMRD GOK, PT&I and facilitating exports of value added fisher- records on the outer Islands ies products Implement non -discriminatory investment Policy incentives to attract investors in the type of incentives imple- Short Term MCIC Report MCIC,MFED GOK fisheries sector and marine resources like mented solar Salt Implement policy measures to support the Transhipment hub estab- World Bank, Japan, establishment of transhipment hub in Betio Medium-term MFMRD report MFMRD lished EIF, DFAT, MFAT, ADB and Kiritimati Develop airport facilities to support fish Improvement in airport World Bank, Japan, Medium-term MICTTD records MICTTD exports facilities EIF, DFAT, MFAT, ADB Invest in fishing vessels in order to meet SPS Medium-term Number of new vessels MFMRD records MFMRD GOK regulations for export markets like EU Implement policy measures to support the Number of aquaculture Short-term MFMRD records MFMRD GOK development of aquaculture projects implemented Developing Sustainable Tourism Improving revenue Increase awareness of Kiribati and the yield for Number of new tourism through sustainable Medium-term MICTTD records MICTTD PT&I tourism products products implemented tourism Implement measures to support the devel- Tourism cultural projects opment of the cultural tourism on the outer implemented, National MICTTD records/ Medium-term MICTTD/MIA GOK Islands in support of Kiribati vision for 20 years Cultural Plan endorsed MIA annual reports (KV20); and implemented TPF 2017-2027 75 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Build tourism and hospitality human resource Number of trained grad- Medium-term MLHRD reports MLHRD MFAT, DFAT capacity within Kiribati uates Support investment in high yield tourism prod- New tourism project Medium-term MICTTD records MICTTD SPTO ucts implemented Improve infrastructure connectivity and access Number of flight schedules Medium-term MICTTD records MICTTD SPTO ability to support tourism to the outer Islands Improved access to water Improve access to utility and social infrastruc- Medium-term and energy by industry MISE records MISE GEF ture to support tourism development players Implement investment policy incentives to Type and number of policy foster business development in the tourism Medium-term MICTTD records MICTTD/MFAI SPTO incentives implemented sector Review where KNTO sits within government set-up to ensure it can most effectively Tourism institutional coordinate and implement tourism policies Medium-term MICTTD records MICTTD GOK framework strengthened and compete for sufficient resources from government Develop a Tourism legislation to regulate the Tourism legislation enact- Medium-term MICTTD records OAG, MICTTD SPTO, sector ed. Labour Mobility and Decent Employment Implement National Labour Migration Policy which emphasises the promotion of decent Increasing domes- employment opportunities for domestic and Number of new overseas MEHR website, sec- tic and overseas Medium-term MEHR GOK overseas employment, including enhancing labour markets tor reports decent employment quality and adequate labour supply through training institutes Medium-term Number of New employers MFAI/MLHRD ILO Reduction in unemploy- Medium-term MFMRD DFAT ment rate Increase in number of Medium-term PSO MFAT overseas workers 76 TPF 2017-2027 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Increased recognition of Medium-term MOE, MCIC FFA overseas qualifications Strengthen the overall governance system in Medium-term Feedback from workers MEHR Reports MEHR GOK the recruitment of the overseas workers Implement an Education Policy with measures Improved English language that emphases on improvement of English Medium-term MOE reports MCIC SPC literacy Literacy at all levels Seabed Minerals Maximising eco- Implement Seabed Minerals Policy and legisla- MFMRD website, MFMRD, MFED, GOK, SPC, Number and type of policy nomic returns from tive framework with view to maximise revenue Medium-term MFMRD progress MELAD, MCIC, Commonwealth measures implemented seabed minerals from the sector report MFAI Secretariat Explore and exploit stake in the Clarion Clipperton Fracture Zone while maximising Number of exploration GOK, ISA, PPP Long-term Exploration reports MFMRD opportunities for capacity building and access trips (Bilateral Partners) to benefit sharing from the area Exploitation phase Exploitation reports MFMRD Domestic Supply chain Strengthening Establish an open integrated market for local Open integrated market MCIC, reports/MIA domestic supply Medium-term MCIC/MIA GOK, UNDP produce to enhance domestic trade established reports chains Support investment in, food, fruit processing Number and type of stor- MELAD, MFMRD and storage facilities like fish centres or ice Medium-term MFMRD UNDP, MFAT, DFAT age facilities acquired reports making machines to reduce post harvest loss Number and type of Strengthen the capacity of business associa- Capacity building pro- tions ,cooperatives and their networks on pro- grammes implemented, MELAD, MFMRD, Medium-term MCIC reports GOK, UNDP duction, supply chain management, and mar- number of producers MCIC/MIA reports keting to enhance producer market linkages trained, increase in domestic trade Implement awareness programmes to Number and type of encourage producers to take advantage of the Medium-term awareness programmes Sector reports MCIC reports GOK, UNDP existing government established incentives to implemented promote domestic trade TPF 2017-2027 77 Time Frame Medium-Term -6 Means of Potential Source of Performance Indicators Lead Agency Years -Long-Term Verification Funding over 6 Years Improved internet connec- Implement Policy measures to improve Medium-term tivity; Increase in number MICITD reports MICTTD ADB, World Bank inter-Island transport and ICT Connectivity of shipping voyages TPF Implementation ,Institutional Framework and Aid for trade Strengthen existing multi-stakeholder consul- Institutional NTAC minutes, TOR tative mechanisms to ensure trade concerns Trade related sub-commit- Framework and Aid Medium-term for new sub-com- MCIC GOK are properly mainstreamed by government for tee established for Trade mittees good trade development outcomes Explore and consider establishment of a Trade Act to support sustainability of key institutions Medium-term Trade Act enacted MCIC website OAG, MCIC GOK such as NTAC, etc. Strengthen collaboration and partnerships with international organisations and devel- Number of partnerships Medium-term MCIC reports MCIC GOK opment partners to maximise benefits of AFT established opportunities Enhance capacity of relevant stakeholders on Number of Aid for Trade development of technical Aid for Trade pro- Medium-term project proposals devel- MCIC reports MCIC,MFED GOK posals oped and funded Aid for Trade main- Mainstream Aid for Trade in bilateral donor streamed in various bilat- GOK, Development partnership arrangements and in the develop- Medium-term eral development partners’ MCIC reports MCIC/MFAI Partners ment partner forums and dialogues arrangement frameworks and meeting outcomes 78 TPF 2017-2027 80 TPF 2017-2027