Tuvalu - Foreign investment

The cash economy is not sufficiently developed to attract substantial foreign investment. In 1981, the government established the Business Development Advisory Board to promote local and foreign investment in the Tuvalu economy; in 1993, the board became the Development Bank of Tuvalu, the country's only commercial bank. UNCTAD reports that the annual flow of foreign direct investment (FDI) to Tuvalu for 1997 and 1998 was no more than $100,000, zero for 1999, $100,000 in 2000, and zero again in 2001. More important ate the government's returns on its outward investments through the Tuvalu Trust Fund (TTF) and the .tv Corporation, returns on which are used to meet government expenses and invest in infrastructural development, lessening dependence on external aid. Profits from the .tv Corporation, for instance, were used to pay the country's UN dues, build a school and improve roads. The TTF is the leading source of revenue, regularly supplying about one-fourth of the government's budget, and is reported to have increased from its original A $27 million capitalization in 1987 to over A $75 million in 2002.

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