Kiribati (pronounced Kiribas) is a small Pacific Island nation, with a population of 110,000 spread over 33 islands, totalling only 810 square kilometres. It is a safe, peaceful and politically stable country, with a strongly egalitarian society. Its economy suffers from the challenges common to Pacific nations – remoteness, scattered geography and the small size of the market – which make it difficult to compete in the regional economy and drive up the cost of service delivery and infrastructure development. It depends heavily on ocean resources, from which 80% of the population live, and remittances. The economy is dominated by the state, although there is a growing private sector. It is highly vulnerable to external economic conditions, in particular to international food and fuel prices and fluctuations in fish stocks. High oil prices have been a cause of poor economic performance in recent years.
Kiribati is classified as a least developed country, but with a tradition of social solidarity that protects against acute poverty. The country is on track to achieve the MDGs on universal primary education, child mortality and maternal health, but is lagging on MDG1 on eradicating poverty. Environmental degradation is a critical concern. The country’s development agenda is set out in the Kiribati Development Plan 2008-2011, which affirms a commitment to the MDGs and focuses on six policy areas: human resource development; economic growth and poverty reduction; health; environment; governance; and infrastructure. A task force has been establish to monitor the development plan, but hard data remains scarce.
Kiribati received around US$50 million in ODA in 2007, which was equivalent to 68% of GDP and 60% of the budget. The major donors were Australia, New Zealand and Japan. With a small number of donors, donor coordination is mainly informal in nature, and there are issue regarding the transparency and predictability of donor finance. The government has so far found it challenging to assert leadership over aid coordination. Kiribati has not yet participated in Paris Declaration monitoring.