24 TRADE & FINANCE
Vanuatu : discover what matters
Simeon Athy , Governor , Reserve Bank of Vanuatu
“ If you are looking for a safe environment to retire and or to start up a business offshore in a more relaxed , safe and highly modern business environment then Vanuatu is the country that you should consider ”
Brief country background
Vanuatu consists of a “ Y-shaped ” chain of more than 80 islands that is located about 1,750 km east of Australia , 500 km north east of New Caledonia and west of Fiji and south of Solomon Islands .
The country ’ s total land area is approximately 12,200 square kilometers and the territorial waters cover 450,000 square kilometers . Despite its small size ( population and land mass ), it is a developing nation with great investment opportunities .
The country gained its Independence from Britain and French in 1980 and selfgoverned itself under a Parliamentary democracy political system headed by a President , a Prime Minister ( the head of the government ) and 52 elected members of parliament .
Vanuatu is ranked amongst the top tourist destinations in the Pacific island region . Recently it was voted twice as the happiest place on earth by the Lonely Planet Index .
Vanuatu has a positive economic environment and outlook
Vanuatu ’ s economy is sound amidst the current challenging global economic conditions , thanks to the strong macroeconomic and policy buffers of the authorities . The IMF ’ s latest assessment of the country ’ s performance ( 2013 Article IV Consultation Review ) showed that despite the lower level of aid and public investments , the country ’ s per capita growth is higher compared to the other Pacific Islands . Inflation level is maintained within a 0-4 % range of annual growth of the CPI , country reserves are maintained well above the four months of import cover and the country ’ s public Debt to GDP ratio is low compared to the region and by international standards . 2014 real GDP growth is projected at 3.6 percent and is expected to gradually pick up in the years ahead , supported by the large donor infrastructure funded projects .
Government policy fully supports domestic investments and growth
There are a lot of untapped investment opportunities in the country ’ s agriculture sector , tourism industry , ICT and telecom sector and more . IMF in the same assessment above stressed that critical infrastructure investments both from the government and private sector are needed to enable the country develop these sectors to allow the country realize its full potential .
The Government recognises this critical area and has taken steps in recent years through the close cooperation and support from the donor communities to address them though its Policy Action Agenda . Earlier deregulation in the telecom and aviation sectors has boosted growth and improve the business environment but more remains to be done . A number of donor / government large infrastructure projects will kick off in 2015 and onwards that will improve the investment climate of the country . Vanuatu is currently ranked 59 in the ease of doing business ranking ,