The ATM comes to Tuvalu

The fourth-smallest country in the world is sinking and will soon disappear. The world had a solution: install ATM machines

It might have been the largest chocolate cake ever cut in Tuvalu, and with good reason. On April 15, a new machine was installed outside the National Bank of Tuvalu. No one had ever seen anything like it. Hit Enter, and it blew paper money out through a slot. It was known as an ATM machine.

Mr Siose Teo, the bank’s general manager, was beside himself with excitement. “It’s a great achievement,” he gushed, as the Prime Minister Feleti Teo sliced through the giant chocolate cake. “It’s a transformative switch. It will open doors for economic empowerment of the people of Tuvalu.”

He was referring to the 11,200 people who are citizens of Tuvalu.

Tuvalu is so little that it’s not even a dot on the map. However, if you blow up the Google screen by pressing the + button several times, you will see a dot somewhere in the Atlantic Ocean between Hawaii and Australia. 

Hit + a few more times, and the single dot will expand to reveal nine dots, and at greater magnification, 33. Of these islets, only one could be called large: a ring-shaped atoll somewhat like a long orange peel encompassing a lagoon and colourful reefs.  A mobike ride from one end to the other along the island’s only road takes about 20 minutes. The island is 20 metres wide at its narrowest and 400 metres at its widest. That, fortunately, is sufficient for a runway.

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You guessed right, we are at Funafuti International Airport, in the capital of Tuvalu. Its airline code is FUN and only three flights land here every week, all from Fiji. Each landing is celebrated with sirens and everyone comes out to cheer. On other days, children play rugby and men play board games on the runway, while flies buzz around dogs asleep nearby.

Now that there is an ATM, Tuvalu’s shoppers will take their first step into a cashless economy. Everything will be gloriously digital. Tuvaluans can use their newly acquired ATM cards to draw cash from the five newly installed ATMs, or swipe to pay at any of the 30 point-of-sale terminals.

There might not be that much to buy, though. Goods and groceries take at least three weeks to reach Funafuti’s little port. “When the stores run out of onions, we cook without onions for three weeks, when the next shipment will arrive from Australia,” says a resident.

Also, the wonderful benefits of not needing paper money will not extend to the 5000 or so Tuvaluans who do not live on Funafuti but on one of the other islands. They will wait for the weekly boat and travel seven hours across open seas to reach the cash-spitting machine that is propelling Tuvalu into the future.

This is a good place to ask the question: why does Tuvalu, the second-least populated country on the planet after Vatican City, even need an ATM?

An Asian Development Bank briefing from 2019 described Tuvalu’s banking sector as “effectively unregulated” (though they probably meant ‘ineffectively’). “Key reform priorities are instituting effective banking oversight and expanding access to financial services.” 

One of the remedies, it appears, was bringing in ATMs.

There is no question the ATM transformed everyone’s life when it was introduced 58 years ago. Muggers and pickpockets instantly went out of business since pockets were always empty.  Withdrawing and depositing money became effortless. Mainly, the ATM made shopping easier and over half a century we got used to it.

Then a new phenomenon emerged: banks worldwide began shutting down ATM machines, closing branches and downsizing their staff, claiming that they were “responding to changing customer preferences”. 

By withdrawing those services, they are gently guiding you—and billions of other consumers—towards digital banking. Behavioural economics has a term for it: nudging. 

Paying by UPI was even more fun than a debit card. Since I no longer saw actual money, there was a sense of buying something for nothing. I frequently found myself overshopping merely because it was cashless. It felt free.

A report from the American Psychological Association found that “our brains remember cash spending, but we are less able to recall spending on cards... making us spend as if it’s play money”.

“The true motive is corporate profit,” notes a report in The Guardian. “The nudge requires two parts. First, they must increase the inconvenience of cash, ATMs and branches. They seek to make people ‘learn’ that they want digital, and then ‘choose’ it.”

The happy residents of Tuvalu, however, have one problem larger than being on the fringes of the world’s digital economy. With most of its land just a metre above sea level, Tuvalu is prone to flooding. With sea levels rising, experts predict that there may be no Tuvalu left 50 years from now. Tuvalu is sinking.

Depressed and frustrated, Simon Kofe, Minister of Justice, Communication and Foreign Affairs, announced that the country would upload a digital version of itself to the metaverse and thus survive climate change.
The world and its leaders have made supportive noises but not offered anything significant to help the country stay above water.

They did install ATMs, though. The Tuvaluans can spend their final years shopping.

You can reach C Y Gopinath at cygopi@gmail.com
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The views expressed in this column are the individual’s and don’t represent those of the paper.

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