Editing Economy of Tuvalu (section)

==Tuvalu Trust Fund==
The [[Tuvalu Trust Fund]] (TTF) was established in 1987 by the [[United Kingdom]], [[Australia]], [[New Zealand]] with about A$27 million in capital.<ref name="NZAID"/> The TTF, a prudently managed overseas investment fund, has contributed roughly (A$79 million), 15% of the annual government budget each year since 1990.<ref name= NZAID/> With a capital value of about 3.5 times GDP, the TTF provides an important cushion for Tuvalu's volatile income sources from fishing and royalties from the sale of the dot-TV domain.

The IMF 2014 Country Report noted the market value of the TTF dropped during the [[Great Recession]], however by 2014 the total value of the fund had recovered to more than $A140 million (3.5 times GDP).<ref name="TTF2014">{{cite web |title= Tuvalu: 2014 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tuvalu|url= https://www.imf.org/external/pubs/ft/scr/2014/cr14253.pdf|publisher= International Monetary Fund Country Report No. 14/253|page=3 |date=5 August 2014|access-date=21 March 2016}}</ref> In 2018 the TTF amounted to about A$179 million.<ref name="IMFr2018">{{cite web|title= Tuvalu: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tuvalu |url= http://www.imf.org/en/Publications/CR/Issues/2018/07/05/Tuvalu-2018-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-46051|publisher= International Monetary Fund Country Report No. 18/209 |date=5 July 2018|access-date=5 September 2018}}</ref> In 2021 the TTF amounted to about A$192 million.<ref name="IMF2021">{{cite web|title= Tuvalu: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tuvalu |url= https://www.imf.org/en/Publications/CR/Issues/2021/08/04/Tuvalu-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-463361 |publisher= International Monetary Fund Country Report No. 21/176|date=August 2021|access-date=5 August 2021}}</ref> In 2021 the market value of the TTF rose by 12 percent to its highest level on record (261 percent of GDP). However, the volatility in global equity markets in 2022 resulted in the TTF’s value falling to A$191 million.<ref name="B2023-ttf">{{cite web|title= Tuvalu: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tuvalu|url= https://www.imf.org/en/Publications/CR/Issues/2023/07/19/Tuvalu-2023-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-536777|publisher= International Monetary Fund Country Report No. 2023/267|page=22|date=21 July 2023|access-date=24 September 2023}}</ref>

The capital of the Trust Fund is known as the “A Account”. The "B Account" or “Consolidated Investment Fund” (CIF) is a revolving “buffer account” that receives funds from the returns or “disbursements” of the "A Account". The operation of the Trust Fund through two accounts assists in stabilising the long-term financial situation of the Government of Tuvalu as well as addressing short-term budget needs. The "B Account", which belongs exclusively to the Government, holds income distributions from the "A Account" until funds are needed to be used for the national budget. It, therefore, serves as a buffer against the volatility of the ‘A Account’ returns, i.e., during years when there are no returns or low returns. Brian Bell, a member of the Tuvalu Trust Fund Advisory Committee from the inception of the Trust Fund in 1987 to 2002, describes the purpose of the Trust Fund as being:

:“The Tuvalu Trust Fund was aimed at providing a source of revenue to overcome a chronic budget deficit situation. The revenue is distributed to the Government from the A Account to the B Account. The amount needed is then drawn down into the consolidated revenue account as an additional source of revenue for expenditure on government services through the recurrent budget.”<ref name="BAB2001">{{cite web| last =Bell | first = Brian A.  | work= A contributed paper delivered to the AARES 45th Annual Conference 23–25 January 2001, Adelaide, South Australia |title= Trust Funds for improved governance and economic performance in developing countries|year =2001|url=http://ageconsearch.umn.edu/bitstream/125540/2/Bell.pdf| access-date=17 September 2013}}</ref>

The 20th-anniversary review of the Tuvalu Trust Fund described the performance as being that:
:“In the first twenty years of operation the Fund has grown to $106.6 million in Market Value as of 30 June 2007. The real rate of return on the Fund has averaged 6.2 percent per annum providing $65.7 million in revenue to Tuvalu. Of this $24.1 million has been used to help fund budget deficits, $29.2 million has been reinvested in the Fund and $12.4 million is held in the CIF awaiting drawdown as of 30 June 2007. The Government's subsequent reinvestments back into the Fund since inception raises Tuvalu's contributions to the Fund to $29.8 million including the initial contribution of $1.6 million. It makes Tuvalu the major contributor to the Fund, which is evidence of Tuvalu's commitment to the long term sustainability of the Fund.”<ref name="TTF2007">{{cite book|title= Tuvalu Trust Fund: 20th anniversary profile (1987-2007)|publisher= Tuvalu Trust Fund Board |date=2007}}</ref>