Economy of Vanuatu
 A market in Port Vila. | |
| Currency | Vanuatu vatu |
|---|---|
Country group | Developing/Emerging |
| Statistics | |
| GDP | |
GDP growth |
|
GDP per capita | |
| 2.863% (2018 est.)[2] | |
All values, unless otherwise stated, are in US dollars. | |
Vanuatu's economy is primarily agricultural; 80% of the population is engaged in agricultural activities that range from subsistence farming to smallholder farming of coconuts and other cash crops.[3]
Copra is by far the most important cash crop (making up more than 35% of Vanuatu's exports), followed by timber, beef, and cocoa. Kava root extract exports also have become important.
Economic sectors
[edit]Financial sector
[edit]In addition, the Vanuatu government has maintained the country's pre-independence status as a tax haven and international financial center. About 2,000 registered institutions offer a wide range of offshore banking, investment, legal, accounting, and insurance and trust company services. On the Tax Justice Network's 2011 Financial Secrecy Index, Vanuatu received a "secrecy score" of 88/100, though its marginal market share placed it near the bottom of the weighted list.[4] Vanuatu was one of three Pacific island nations (along with Nauru and Palau) which four major international banks placed a U.S. dollar transaction ban on in December 1999.[5] Vanuatu sells citizenship for about $150,000, and its passports allow visa-free travel throughout Europe. With demand from the Chinese market booming, passport sales may now account for more than 30% of the country's revenue.[6] Vanuatu maintains an international shipping register in New York City.[citation needed]
Fishing industry
[edit]There is substantial fishing activity, although this industry does not bring in much foreign exchange. Vanuatu claims an exclusive economic zone of 680,000 square kilometres (260,000 sq mi) and possesses marine resources.[citation needed] Some ni-Vanuatu are involved in fishing, along with foreign fleets.[7]
Mining industry
[edit]In contrast, mining activity is unsubstantial.[citation needed]
Agricultural sector
[edit]Exports include copra, kava, beef, cocoa and timber, and imports include machinery and equipment, foodstuffs and fuels.[citation needed] Copra, cocoa, kava and beef account for more than 60% of Vanuatu's total exports by value and agriculture accounts for 20% of GDP.[citation needed]
Vanuatu produced in 2018:
- 374 thousand tons of coconut;
- 53 thousand tons of root and tubers;
- 16 thousand tons of banana;
- 13 thousand tons of vegetable;
In addition to smaller productions of other agricultural products, like peanut (2.6 thousand tons) and cocoa (1.8 thousand tons).[8]
Tourism sector
[edit]Tourism is Vanuatu's fastest-growing sector, having comprised 40% of GDP in 2000.[citation needed] Industry's portion of GDP declined from 15% to 10% between 1990 and 2008. Government consumption accounted for about 27% of GDP.[citation needed]
Vanuatu has commodities, mostly agricultural, produced for export. In 2000, imports exceeded exports by a ratio of nearly 4 to 1. This was offset by high services income from tourism, which kept the current account balance fairly even. After a downturn in 2001 and 2002 due to a decrease in tourism funding,[clarification needed] the economy was expected to grow by 3.9%, increasing to 4.3% in 2007.[citation needed]
Exports
[edit]Luganville, the second largest city, is a hub for exports with 64.3% of domestic exports leaving it compared to 35.7% for the capital of Port Vila, whereas imports show the opposite trend with 86.9% entering through the capital and 13.1% through Luganville.[9]
Reform
[edit]In 1997 the government, with the aid of the Asian Development Bank, committed itself to a 3-year comprehensive reform program. During the first year of the program the government has adopted a value-added tax, consolidated and reformed government-owned banks, and started a 10% downsizing in the public service.[citation needed] The program was derailed when Barak Sope became prime minister. Under Prime Minister Edward Natapei, reform programs were reintroduced.[citation needed]
Traditional economy
[edit]The government declared 2007 to be "the Year of the Traditional Economy" (Bislama: kastom ekonomi), encouraging the trade of sea shells and pig tusks and discouraging cash transfers. By the end of the year, they extended the experiment in to 2008.[10] The establishment of the Tangbunia Bank, to deal in customary wealth, was linked to this initiative.[11]
Economic statistics
[edit]Vanuatu scored 32.06 (versus a worldwide score of 42.94, lower scores translating to higher risk) on the June 2013 Euromoney Country Risk rankings.[12]
All "$" units are US Dollar.
GDP: purchasing power parity - $1.237 billion (2012 est.)
GDP - real growth rate: 2.6% (2012 estimate)
GDP - per capita: purchasing power parity - $4900 (2012 est.)
GDP - composition by sector:
agriculture:
20.6%
industry:
11.7%
services:
67.6% (2012 est.)
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 2.8% (2012 est.)
Labor force: 115900 (2007)
Labor force - by occupation: agriculture 58%, industry 10%, services 32% (2010 est.)
Unemployment rate: 1.5% (2010)
Budget:
revenues:
$188.2 million
expenditures:
$207.4 million, including capital expenditures of $700 000 (2012 est.)
Industries: food and fish freezing, wood processing, meat canning
Industrial production growth rate: 12% (2011 est.)
Electricity - production: 52 GWh (2008)
Electricity - production by source:
fossil fuel:
90%
hydro:
0%
nuclear:
0%
other:
10% (2012)
Electricity - consumption: 40.22 GWh (2008)
Electricity - exports: 220 kWh (2008)
Electricity - imports: 0 kWh (2008)
Agriculture - products: copra, coconuts, cocoa, coffee, kava, taro, yams, fruits, vegetables, fish, beef
Exports: $280 million (f.o.b., 2012 est.)
Exports - commodities: copra, beef, cocoa, timber, kava, coffee
Exports - partners: Thailand 57.3%, Japan 21.8% (2011)
Imports: $242 million (f.o.b., 2012)
Imports - commodities: machinery and equipment, foodstuffs, fuels
Imports - partners: China 26.7%, Singapore 21.2%, Australia 13.6%, New Zealand 7.2%, Fiji 6.7%, Japan 5.4% (2011)
Debt - external: $307.7 million (2011)
Economic aid - recipient: $27.5 million (2002)
Currency: 1 vatu (VT), no subdivisions
Exchange rates: vatu (VT) per US$1 – 94.03 (2012), 96.91 (2010), 111.79 (2004), 122.19 (2003), 139.2 (2002), 145.31 (2001), 129.76 (December 1999), 129.08 (1999), 127.52 (1998), 115.87 (1997), 111.72 (1996), 112.11 (1995)
Fiscal year: calendar year
See also
[edit]References
[edit]- ^ a b "Vanuatu - The World Factbook". CIA World Factbook. Central Intelligence Agency. Archived from the original on 9 January 2021. Retrieved 2 December 2023.
- ^ a b c d "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 21 October 2019.
- ^ The Case for a Legislative Budget Office in Vanuatu. Social Science Research Network (SSRN). Accessed 18 July 2017.
- ^ "2011 Results - Financial Secrecy Index". Archived from the original on 2013-08-28. Retrieved 2013-08-12.
- ^ "WORLD BANKS ISOLATE THREE PACIFIC COUNTRIES: NAURU, PALAU AND VANUATU ACCUSED OF MONEY LAUNDERING - December 21, 1999". Archived from the original on 2013-09-28. Retrieved 2013-09-22.
- ^ How selling citizenship is now big business. Sarah Treanor and Vivienne Nunis, business reporters, BBC News, Vanuatu. 10 October 2019. https://www.bbc.co.uk/news/business-49958628
- ^ Leeman, Bernard (July 27, 2017). "Long-distance learning: building a university on a South Pacific island". Times Higher Education.
- ^ Vanuatu production in 2018, by FAO
- ^ Trade deficit widens, economy looks good - Vanuatudaily.com[dead link]
- ^ Vanuatu spurns cash for sea shells and pigs- The Telegraph, 2007-12-25
- ^ "Paying in pig tusks in Vanuatu", Andrew Harding, BBC, July 4, 2007
- ^ "Euromoney Country Risk". Euromoney Institutional Investor PLC. Retrieved 21 September 2013.
