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Economy of Vanuatu

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Title: Economy of Vanuatu  
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Economy of Vanuatu

A market in Port Vila
Vanuatu Exports Treemap (2009)

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 the country's exports), followed by timber, beef, and cocoa. Kava root extract exports also have become important. Vanuatu also maintains an international shipping register in New York City.

Copra, cocoa, kava and beef account for more than 60% of Vanuatu's total exports by value and agriculture accounts for 20% of GDP. Tourism is Vanuatu's fastest-growing sector, having comprised 40% of GDP in 2000. Industry's portion of GDP declined from 15% to 10% between 1990 and 2000. Government consumption accounted for about 27% of GDP.

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.[1]

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.[2] 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.[3]

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.[4] The establishment of the Tangbunia Bank, to deal in customary wealth, was linked to this initiative.[5]

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.[6]

GDP: purchasing power parity - $1.237 billion (2012 est.)

GDP - real growth rate: 2.6% (2012 estimate)

GDP - per capita: purchasing power parity - $4,900 (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: 115,900 (2007)

Labor force - by occupation: agriculture 58%, industry 10%, services 32% (2010 est.)

Unemployment rate: 1.5% (2010)

Ease of Doing Business Rank: 60th[7]

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, coconuts, 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) = 100 centimes

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

References

  1. ^ Trade deficit widens, economy looks good - Vanuatudaily.com
  2. ^ http://www.financialsecrecyindex.com/2011results.html
  3. ^ http://pidp.org/archive/1999/December/12-21-up1.htm
  4. ^ Vanuatu spurns cash for sea shells and pigs - The Telegraph, 2007-12-25
  5. ^ "Paying in pig tusks in Vanuatu", Andrew Harding, BBC, July 4, 2007
  6. ^ "Euromoney Country Risk". Euromoney Country Risk. Euromoney Institutional Investor PLC. Retrieved 21 September 2013. 
  7. ^ "Doing Business in Vanuatu 2010".  
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