Wednesday, 29 June 2016

Economy of Vanuatu

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.
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.

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, the economy was expected to grow by 3.9%, increasing to 4.3% in 2007.
Vanuatu claims an exclusive economic zone of 680,000 square kilometres (260,000 sq mi) and possesses marine resources. Some ni-Vanuatu are involved in fishing, along with foreign fleets.

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.

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. 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.

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. The program was derailed when Barak Sope became Prime Minister. Under Prime Minister Edward Natapei, reform programs have been reintroduced.

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. The establishment of the Tangbunia Bank, to deal in customary wealth, was linked to this initiative.

Vanuatu maintains an international shipping register in New York City.

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