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World > Oceania > Vanuatu > Economy (Notes)

Vanuatu - Economy (Notes)


ECONOMY
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. In addition, the government has maintained Vanuatu's preindependence status as a tax haven and international off-shore financial center. About 2,000 registered institutions offer a wide range of offshore banking, investment, legal, accounting, and insurance and trust-company services. Vanuatu also maintains an international shipping register in New York City. In 2002, following increasing international concern over money laundering, Vanuatu increased oversight and reporting requirements for its off-shore sector.

Coconut oil, copra, kava and beef account for more than 75% of Vanuatu's total agricultural exports and agriculture accounts for approximately 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 is a small country, with only a few commodities, mostly agricultural, produced for export. In 2003, imports exceeded exports by a ratio of nearly 3 to 2. However, this was partially offset by high services income from tourism, keeping the current account balance at $-28.4 million.

Vanuatu claims an exclusive economic zone of 680,000 square kilometers and possesses substantial marine resources. Currently, only a limited number of ni-Vanuatu are involved in fishing, while foreign fleets exploit this potential.

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 adopted a value-added tax, consolidated and reformed government-owned banks, and started a 10% downsizing in the public service. An important part of the reform installed career civil servants as Director Generals in charge of each ministry, helping to ensure continuity of service despite the frequent changes in government.


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Current Time - Ranking Positions
Notes and Commentary: People - Economy - Government and Political Conditions - Historical Highlights - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Current Time
Ranking Positions


Notes and Commentary
People
Economy
Government and Political Conditions
Historical Highlights
Foreign Relations
Relations with U.S.





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