Tuvalu News

Australian Reporter Visits Tuvalu, Investigates .TV

NEER KORN

HIGH NET WEALTH?
There is no television service nor newspapers in Tuvalu, and its economy is still based largely on subsistence living. But this tiny nation, the world's fourth smallest, is about to make millions on the internet. And for doing nothing. Neer Korn travelled to the Pacific Island atoll investigating a story of proposed rags to riches.

The people of Tuvalu were not too familiar with the internet up until recently. The 10,000 inhabitants of the tiny Pacific nation some 1,000 km north of Fiji, with a total land area of 26 square kilometers made up of nine atolls - do without television or newspapers. Its capital, Funafuti, has not a single traffic light, and perhaps only a dozen cars roam its single unpaved road. Its international exchange boasts six lines. The few people that have internet connections make long-distance phone calls to a server in Fiji, their line dropping out frequently.
But in 1995 the Government of Tuvalu began to receive business proposals concerning the internet, and particularly to do with the suffix ".tv".

The government was to learn that the body which dishes out internet domain letters, thus giving United Kingdom .uk and Australia .au - had assigned Tuvalu "tv". And that this was considered to be of great value to media organizations. For example, rather than calling its website address the forgettable "disney.com" they could now become "disney.tv". All for paying a fee to the rightful owners - Tuvalu. Then there's "abc.tv", "news.tv", "childrens.tv", "coke.tv", "fox.tv" - a seemingly endless list of parties parties potentially interested in paying handsomely to brand themselves with these key letters, familiar in every language and every corner of the world.
There was money to be made.

The government invited tenders from interested parties. Five tenders flew to Tuvalu to make their case personally. Travelling on the only airline linking the country with its pacific neighbours, the notoriously unreliable Air Marshall, they landed on the air strip which covers one third of the capital. In the 30 degree Celsius year round heat they headed for the air conditioned comfort of the Vaiku Lagi, the country's only hotel.
One company, Information.ca, made an offer the government could not refuse: an advance payment of US$50 million - more than four times Tuvalu's annual GDP - followed by projected earnings of US$60 - 100 million dollars a year from Tuvalu's 65 percent share of revenues.

The signing ceremony took place last August in the dining room of the Vaiaku Lagi, overlooking the island's magnificent coral lagoon. "Our people are already dreaming about what to do with the money," the Prime Minister Bikenibeu Paeniu said. In fact, the offer was too good to be true, and the amounts have been dramatically revised downwards. But Tuvalu is still looking at a hitherto unthinkable increase in its income.

Everyone in Tuvalu has heard of the ".tv" agreement. It's a popular topic for discussion and many people wondered whether the promised $US100 million a year meant they would all be givn US$10,000 each. The dreams dreams of the people to which the prime minister refers are modest by our standards. Status symbol in in a country where a good wage is US$150 per month is a television set and VCR, videos being second only to church going as a popular past time. The greatest concern of customs officials is confiscation of pirated tapes. "I watched Titanic well before they showed it in Australia," says one young man with clear pride. Families wish is for white goods, perhaps a fridge or washing machine. "I wish I were able to buy a car," says David Paluka, a 25 year-old government worker, who currently rides around the island on a rickety motor bike, which at $3,000 is in itself out of many people's financial reach. While all dream of the money, they also recognize that national interest must come first, that the government has responsibility for desperately needed infrustructure projects.

The United Nations considers Tuvalu one of the world's least developed countries. Per capita annual GDP from under $2,000 per year to become among the world's highest. "Practically, as you see, we have nothing," says Deputy Prime Minister Kokea Malua. "The land has very poor quality and we have few resources." Tuvalu's ways are still relaxed and tropical. The pace is slow, and the people exudes a friendliness long forgotten in most Western cities; when you walk through the street late at night, the only danger is tripping over the many people sleeping outdoors, seeking sanctuary from the heat.

A future of poverty appeared inevitable when Tuvalu decided to split from Kiribati, with which it had made up the British colony of the Gilbert and Ellice Islands. They had been brought together by colonial convenience rather than any cultural or natural binds.The people of Tuvalu (which means "eight standing together", referring the country's eight inhabited islands) are Polynesians and those of Kiribati Melanesians; they speak different language.
The British were not pleased. Should Tuvalu break away, they warned, it would receive none of its previous assets, with the exception of a single ship servicing the nine islands (in some 600 square kilometers of ocean). It would have no claim to any royalties from the phosphate mines of the former colony, and its territory would include only those nine islands themselves and none of the uninhabited surrounding ones, now part of Kiribati's sizeable sea territory. But the Tuvaluans persisted and the 1974 referendum on the subject, observed by a UN team at Britain's insistence, received a resounding 92 percent "yes" response. Thus the Westminster styled democratic nation of Tuvalu was born, obtaining full independent nationhood status four years later, in 1978. Its meager population, outclassing in size only the Vatican, Monaco and Nauru, had the seemingly impossible task of setting up a country, without money nor infrastructure.

Tuvalu's existence has been possible because of the generosity of surrounding countries, several money making schemes and successive fiscally responsible administrations. It is a country which is relatively free of corruption, where a Rolls Royce or Rolex would be difficult to guise.

Testament to its responsible policies, Tuvalu boasts a literacy rate of 96 percent, with education consuming a significant proportion of its meager budget. Furthermore, its trust fund, set up by Australia, New Zealand and the United Kingdom, recognizing the long term needs of the nation, has grown impressively from some $24 million to $70 million in 12 years. Most of its income, and all its infrastructure, have been donated. Virtually all official buildings bear plaques expressing thanks to its donor nation. The airport, bank, post office, government offices, all single story oddly furnished modest structures, more in line with student union offices than government ones. Parliament House itself, a bare hut with openings in place of windows, also serves as a meeting house for celebrations and funerals.

"We are dependent mostly on aid," says Finance Minister Alesana Seluka, "but that is because we still haven't had enough time to develop our own natural resources. We have an agreement with the Americans for ten years to fish in our waters and bilateral agreement with Japan. On the average the last two or three years it earns $2 or $3 million each year, a very significant contribution to our economy. We would like to develop our own natural resources, to fish ourselves, rather than allow foreign investors to do it for us."

Revenue has also been earn through sale of stamps to eager philatelists and by selling rights to its air space to international phone companies (who invariably utilize these for phone sex services, not accessible in the devoutly Protestant country itself).

A significant portion of funding is received from Tuvaluans working overseas, separation of families being a common feature of their life. Several hundred men work for overseas shipping companies, being excellent mariners, most of their incomes sent directly to their families. Several hundred more work the phosphate mines of Nauru, although these are being gradually repatriated as this resource is nearly exhausted.

But poverty does not mean malnutrition. "People can go back to their own islands where they have land," says Malua. "They can work on their land and they can fish. You can look after yourself and your family in this manner. Nothing to do with money. We have a very wide extended family system here. We all help each other.
This is clearly visible throughout the capital, where doors are open and it is not unusual for two families to occupy a single room.

Yet the adverse social and health consequences of modernity are increasingly felt. One gets the impression that Tuvalu is on the brink of shedding its family and island based culture. Consumption of junk foods has resulted in a diabetes rate of one in seven, which rapidly rising. Seluka, who is also a medical doctor, laments "It's very devastating ... health problems, heart diseases and hypertension will increase. But what I'm worried about most as a medical man is the sanitation conditions. The government cannot keep up with the pressure of even building quarters for its own workers so people have taken their own initiative building sub-standard housing.
Funafuti is congested. Its population has quadrupled to 4,000 in the past 20 years as the residents of the outer islands come in search of work and those working in Nauru return home.

The President of the Church of Tuvalu, arguably the most influential man on the island, whose pastors, although unpaid, are the highest income earners in the country due to constant donations by devout followers concurs. "There is a change, before nearly everyone went to church but now you can see some people are slacking. There is influence from outside culture. Especially the young people drinking smoking, different styles of hair and dress. You can see these changes."

It is on Friday nights that this becomes most apparent, when the hotel's bar becomes the popular drinking hole for the young men, who consume copious cans of VBs and Fosters, staggering to a mix of western songs and traditional island tunes and erupting into occasional arguments. The jail houses two inmates awaiting trial for murder, the result of drunken brawls. The only bank had been robbed once.

While the people may dream of a cash handout the government's plan is to top up the coffers of its trust fund and set up a another one for the outlying island projects. Reliance on foreign aid is a barrier to a complete sense of independence. Education will remain the highest priority with hundreds of secondary and tertiary students gaining qualification through overseas scholarships. Tourism, though having clear potential in such an unspoiled region of the world, is almost non-existent. Although there are plenty of ideal locations, there are no resorts. And in the absence of reliable air service huge investments would be needed to attract more than the handful of tourists currently on the island at any one time.

How much Tuvalu will actually earn will become clearer over the next two months when the first auction of ".tv" names takes place. Seluka, one of the deal's skeptics, has not allowed for this money it drawing up this year's budget. The advance payment of $US50 million was to have been made by the last day of last year. By late November, however, there were signs of trouble Information.ca. They could not raise the money. "That was the purpose of our recent visit to Toronto", says Attorney General Feleiti Teo who just returned from meetings in Canada, "to see for ourselves what the company was worth and what options we could pursue to salvage the original deal. What he saw was differed considerably from the slick presentation made by Chapnick. "We came to know the exact nature of the company's operation. It's a pretty small set up compared to what we would have thought. It's a tiny internet company trying to make it big, there were only four or five staff, in offices certainly not as posh as we would have thought. "

But Information.ca has now secured the resources of much larger internet company and a new deal was signed a few weeks ago. "Under the new arrangement we get an up front payment, a smaller more realistic amount". (A government source put this at $10-12 million, still a sizeable amount equivalent to the Tuvalu annual GDP). "We retained the original revenue split and will be getting guaranteed minimum payments each year," Teo adds. "We are also getting a proportion of the company."

So far several companies have pre-registered on the Canadian company's internet site, including major players like Coca Cola. How much money will be made is still unknown. "I believe it could make a lot of money, because of its potential. How much? That all depends. But the potential is there and the interest is there. I would like to be optimistic, but its a pretty close call," says the Attorney General. The Canadians are not returning this reporters phone calls or emails on the matter.

Regardless of how much money Tuvalu comes derives, there is one pressing issue facing the country which no amount of money can solve. The highest point of Tuvalu is a mere 15 feet above sea level. In impassioned to the global warming conference in Buenos Aires late last year the Prime Minister said: "We are ... the most vulnerable of the most vulnerable of countries to the effect of sea level rise." It is a subject Paeniu raises at every opportunity. "The effects of climate change, I can tell you, are for real and a matter of life and death for us, inhabitants of these low lying islands. We would be gone even before we had the chance to prove to the developed countries the consequences of their actions."


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