World Country Guide

Business Profile

Economy
Agriculture and fishing occupy 40 per cent of the working population. Fruit and vegetables are grown for domestic consumption while coffee, coconuts, copra, beef and fish are the main export commodities. The sale of fishing licences to foreign fleets is another important source of revenue. There is also a sizeable timber industry, originally encouraged by the Government but now strictly regulated in the wake of international pressure. The industrial sector is mostly concerned with food processing and construction. Identified mineral resources, including manganese, gold and copper have yet to be exploited on a commercial scale.
While mineral deposits may be of future value to the Vanuatu economy, the Government’s recent efforts to diversify the economy have been focused on the service sector. The most important of these is tourism – backed by the construction of new hotels and airport improvements, allied to a focus on ‘ecotourism’ – and ‘offshore’ financial services. Tourism is worth about US$55 million to the economy annually. A ‘flag of convenience’ shipping register was also created. Despite these efforts, the economy is still vulnerable to its geographical circumstances; a severe earthquake followed by a tsunami in late 1999 caused considerable damage to several islands. Meanwhile, offshore finance has run into trouble. In April 2002, Vanuatu was one of seven countries ‘named and shamed’ by the Organisation for Economic Cooperation and Development (OECD) and threatened with sanctions for its failure to take adequate measures against money-laundering. Since then, the Vanuatu authorities have tightened their financial services regulatory regime. Foreign aid remains essential to sustain the economy, which is currently growing at 2 per cent annually. In 2002, Vanuatu signed up to the newly-established regional trade bloc created under the Pacific Island Countries Trade Agreement (PICTA). Australia, New Zealand, Japan, the UK and France are the principal donors. These countries, plus Bangladesh, are also the country’s principal trading partners.

Business
A casual approach to business prevails. Shirts and smart trousers will suffice – ties are only necessary for the most formal occasions. Business is conducted in Pidgin English or French. Office hours: Mon-Fri 0730-1130 and 1330-1630.

Commercial Information
The following organisations can offer advice: Vanuatu Chamber of Commerce, PO Box 189, Port Vila (tel: 27543; fax: 27542; e-mail: atarivile@vanuatu.gov.vu); or Vanuatu Investment Promotion Authority, 1st Floor, Pilioko House, Port-Vila (tel: 24096; fax: 25216; e-mail: cde@vanuatu.com.vu; website: www.investinvanuatu.com).