Kiribati and Tuvalu, both low lying atoll island states, have relatively small land surfaces with 810.5 square km for Kiribati and 24.4 square km for Tuvalu. Due to their Exclusive Economic Zones they have vast maritime space, 3.5 million square km for Kiribati and 750,000 square km for Tuvalu (Asian Development Bank 2002a, 2002b; Connell 2003, 92). Population sizes are small: an estimated 97,000 for Kiribati, and just 10,000 people in Tuvalu. Problematic, however, is the high percentage of young population^[8] and rapid urban growth^[9] which leads to density and environmental problems in both capital islands, Tarawa and Funafuti. As small island economies these countries face challenges such as small market size, distance from markets or main centres, higher transportation costs, and because of their remote location, both sea freight charges and costs to passengers are high.

Distances and high transport costs are a disadvantage for island economies, as it makes tourism difficult and circular labour migration costly (World Bank 2006). Both countries’ economic growth is concentrated on their public sectors (Asian Development Bank 2002a,b) with consequentially small private sectors; the Tuvalu private sector contributes approximately 30 per cent to GDP, with only 15 per cent business participation (Conway 2006); private sector employment in Kiribati accounts for 25 per cent in total (Asian Development Bank 2002a). Added to the economic challenges are environmental challenges, such as low rainfall, lack of natural resources, the occurrence of cyclones in Tuvalu, and the threat of sea level rise.

Existing migration schemes for Kiribati and Tuvalu are small. In contrast to many other Pacific nations, Kiribati and Tuvalu do not have the privilege of free access to one of the Pacific Rim countries. Under the Pacific Access Quota, however, both countries are granted entry for 75 people each to New Zealand. This access has a number of strict conditions, such as applicants having to hold a job offer at the time of application (New Zealand Immigration 2007). Since 2006 New Zealand has offered a ‘seasonal working scheme’, allowing some Pacific Islands, including Tuvalu and Kiribati to apply for contract work in vineyards and orchards.

In view of the relatively vulnerable economic circumstances and the restriction of free movement, it can be said that the seafarer scheme has turned out to be very successful for both countries, making a significant contribution to the Kiribati and Tuvaluan economies. Remittances make an estimated contribution of 15 to 20 per cent to Kiribati’s and 50 per cent to Tuvaluan’s national income. Kiribati currently receives remittances of AUD$12-13 million dollars (Borovnik 2006); Tuvalu AUD$3-4 million (Boland and Dollery 2005).