Economics Explained

The World's Smallest National Economy Will Soon Disappear

Jun 20, 2023
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INSIGHT

Existential Threat From Rising Seas

  • Tuvalu's islands average only 2 metres above sea level and face steady sea-level rise of ~3.9mm/year.
  • Persistent flooding and saltwater intrusion risk making the islands economically and physically uninhabitable.
INSIGHT

Shipping Costs Inflate Living Expenses

  • Tuvalu pays high import costs because small boats burn large amounts of fuel per container, making essentials extremely expensive.
  • Dependence on global oil prices and remote shipping drives high local cost of living despite low incomes.
ANECDOTE

Seafaring Jobs Fuel The Economy

  • Many Tuvaluans work as seafarers on international ships, sending nearly all earnings home because food and lodging are provided abroad.
  • This migrant labour has become a major and reliable source of foreign income for the country.
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