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The four mainstays of the economy are agriculture, tourism, offshore financial services, and raising cattle. There is substantial fishing activity, although this industry does not bring in much foreign exchange. Exports include copra, kava, beef, cocoa, and timber, and imports include machinery and equipment, foodstuffs, and fuels. In contrast, mining activity is unsubstantial. While manganese mining halted in 1978, there was an agreement in 2006 to export manganese already mined but not yet exported. The country has no known petroleum deposits. A small light-industry sector caters to the local market. Tax revenues come mainly from import duties and a 12.5% VAT on goods and services. Economic development is hindered by dependence on relatively few commodity exports, vulnerability to natural disasters, and long distances between constituent islands and from main markets. Agriculture is used for consumption as well as for export. It provides a living for 65% of the population. In particular, production of copra and kava create substantial revenue. Many farmers have been abandoning cultivation of food crops, and use earnings from kava cultivation to buy food.[27] Kava has also been used in ceremonial exchanges between clans and villages.[34] Cocoa is also grown for foreign exchange.[35] In 2007, the number of households engaged in fishing was 15,758, mainly for consumption (99%), and the average number of weekly fishing trips was 3.[36] The tropical climate enables growing of a wide range of fruits and vegetables and spices, including banana, garlic, cabbage, peanuts, pineapples, sugarcane, taro, yams, watermelons, leaf spices, carrots, radishes, eggplants, vanilla (both green and cured), pepper, cucumber, and many others.[37] In 2007, the value (in terms of millions of vatu – the official currency of Vanuatu), for agricultural products, was estimated for different products: kava (341 million vatu), copra (195), cattle (135), crop gardens (93), cocoa (59), forestry (56), fishing (24), coffee (12).[38] Tourism brings in much-needed foreign exchange. Vanuatu is widely recognized as one of the premier vacation destinations for scuba divers wishing to explore coral reefs of the South Pacific region.[39] Tourism increased 17% from 2007 to 2008 to reach 196,134 arrivals, according to one estimate.[40] The 2008 total is a sharp increase from 2000, in which there were only 57,000 visitors (of these, 37,000 were from Australia, 8,000 from New Zealand, 6,000 from New Caledonia, 3,000 from Europe, 1,000 from North America, 1,000 from Japan. (Note: figures rounded to the nearest thousand)).[41] Tourism has been promoted, in part, by Vanuatu being the site of several reality-TV shows. The ninth season of the reality TV series Survivor was filmed on Vanuatu, entitled Survivor: Vanuatu—Islands of Fire. Two years later, Australia's Celebrity Survivor was filmed at the same location used by the U.S. version. In mid-2002, the government stepped up efforts to boost tourism. Financial services are an important part of the economy. Vanuatu is a tax haven that until 2008 did not release account information to other governments or law-enforcement agencies. International pressure, mainly from Australia, influenced the Vanuatu government to begin adhering to international norms to improve transparency. In Vanuatu, there is no income tax, withholding tax, capital gains tax, inheritance tax, or exchange control. Many international ship-management companies choose to flag their ships under the Vanuatu flag, because of the tax benefits and favourable labour laws (Vanuatu is a full member of the International Maritime Organization and applies its international conventions). Vanuatu is recognized as a "flag of convenience" country.[42] Several file-sharing groups, such as the providers of the KaZaA network of Sharman Networks and the developers of WinMX, have chosen to incorporate in Vanuatu to avoid regulation and legal challenges. In response to foreign concerns the government has promised to tighten regulation of its offshore financial centre. Vanuatu receives foreign aid mainly from Australia and New Zealand. Commercial agriculture, North Efate Raising cattle leads to beef production for export. One estimate in 2007 for the total value of cattle heads sold was 135 million vatu; cattle were first introduced into the area from Australia by British planter James Paddon.[43] On average, each household has 5 pigs and 16 chickens, and while cattle are the "most important livestock", pigs and chickens are important for subsistence agriculture as well as playing a significant role in ceremonies and customs (especially pigs).[44] There are 30 commercial farms (sole proprietorships (37%), partnerships (23%), corporations (17%)), with revenues of 533 million vatu and expenses of 329 million vatu in 2007.[45] Earthquakes can negatively affect economic activity on the island nation. A severe earthquake in November 1999, followed by a tsunami, caused extensive damage to the northern island of Pentecost, leaving thousands homeless. Another powerful earthquake in January 2002 caused extensive damage in the capital, Port Vila, and surrounding areas, and was also followed by a tsunami. Another earthquake of 7.2 struck on 2 August 2007.[46] The Vanuatu National Statistics Office (VNSO) released their 2007 agricultural census in 2008. According to the study, agricultural exports make up about three-quarters (73%) of all exports; 80% of the population lives in rural areas where "agriculture is the main source of their livelihood"; and of these households, almost all (99%) engaged in agriculture, fisheries and forestry.[47] Total annual household income was 1,803 million vatu. Of this income, agriculture grown for their own household use was valued at 683 million vatu, agriculture for sale at 561, gifts received at 38, handicrafts at 33, and fisheries (for sale) at 18.[47] The largest expenditure by households was food (300 million vatu), followed by household appliances and other necessities (79 million vatu), transportation (59), education and services (56), housing (50), alcohol and tobacco (39), clothing and footwear (17).[48] Exports were valued at 3,038 million vatu, and included copra (485), kava (442), cocoa (221), beef (fresh and chilled) (180), timber (80), and fish (live fish, aquarium, shell, button) (28).[49] Total imports of 20,472 million vatu included industrial materials (4,261), food and drink (3,984), machinery (3,087), consumer goods (2,767), transport equipment (2,125), fuels and lubricants (187) and other imports (4,060).[50] There are substantial numbers of crop gardens – 97,888 in 2007 – many on flat land (62%), slightly hilly slope (31%), and even on steep slopes (7%); there were 33,570 households with at least one crop garden, and of these, 10,788 households sold some of these crops over a twelve-month period.[51] The economy grew about 6% in the early 2000s.[52] This is higher than in the 1990s, when GDP rose less than 3%, on average. One report from the Manila-based Asian Development Bank about Vanuatu's economy gave mixed reviews. It noted the economy was "expanding", noting that the economy grew at an impressive 5.9% rate from 2003 to 2007, and lauded "positive signals regarding reform initiatives from the government in some areas" but described certain binding constraints such as "poor infrastructure services". Since a private monopoly generates power, "electricity costs are among the highest in the Pacific" among developing countries. The report also cited "weak governance and intrusive interventions by the State" which reduced productivity.[52] Vanuatu was ranked the 173rd safest investment destination in the world in the March 2011 Euromoney Country Risk rankings.[53] Communications Mobile phone service in the islands is provided by TVL and Digicel. A government broadband network has been constructed, to provide email, telephone, internet and video conferencing facilities to government offices throughout the country.[54] Vanuatu became the 185th member of the World Intellectual Property Organization (WIPO) in December 2011.[55] Culture and society Culture Main article: Culture of Vanuatu Wooden slit drums from Vanuatu, Bernice P. Bishop Museum Vanuatu culture retains a strong diversity through local regional variations and through foreign influence. Vanuatu may be divided into three major cultural regions. In the north, wealth is established by how much one can give away. Pigs, particularly those with rounded tusks, are considered a symbol of wealth throughout Vanuatu. In the centre, more traditional Melanesian cultural systems dominate. In the south, a system involving grants of title with associated privileges has developed.[56] Young men undergo various coming-of-age ceremonies and rituals[57] to initiate them into manhood, usually including circumcision. Most villages have a nakamal or village clubhouse which serves as a meeting point for men and as a place to drink kava. Villages also have male- and female-only sections. These sections are situated all over the villages; in nakamals, special spaces are provided for females when they are in their menstruation period. There are few prominent ni-Vanuatu authors. Women's rights activist Grace Mera Molisa, who died in 2002, achieved international notability as a descriptive poet. Music Main article: Music of Vanuatu A women's dance from Vanuatu, using bamboo stamping tubes. A women's dance from Vanuatu, using bamboo stamping tubes. The traditional music of Vanuatu is still thriving in the rural areas of Vanuatu. Musical instruments consist mostly of idiophones: drums of various shape and size, slit gongs, stamping tubes, as well as rattles, among others. Another musical genre that has become widely popular during the 20th century in all areas of Vanuatu, is known as string band music. It combines guitars, ukulele, and popular songs. More recently the music of Vanuatu, as an industry, grew rapidly in the 1990s and several bands have forged a distinctive ni-Vanuatu identity. Popular genres of modern commercial music, which are currently being played in the urban areas include zouk music and reggaeton. Reggaeton, a variation of rap/hip-hop spoken in the Spanish language, played alongside its own distinctive beat, is especially played in the local nightclubs of Port Vila with, mostly, an audience of Westerners and tourists. Languages Main article: Languages of Vanuatu The national language of the Republic of Vanuatu is Bislama. The official languages are Bislama, French and English. The principal languages of education are French and English. The use of English or French as the formal language is split along political lines. Bislama is a pidgin language, and now a creole in urban areas. Essentially combining a typically Melanesian grammar with a mostly English vocabulary, Bislama is the only language that can be understood and spoken by the majority of Vanuatu's population as a second language. In addition to this lingua franca, 113 indigenous languages are still actively spoken in Vanuatu.[56] The density of languages, per capita, is the highest of any nation in the world[58] with an average of only 2,000 speakers per language. All vernacular languages of Vanuatu (i.e., excluding Bislama) belong to the Oceanic branch of the Austronesian family. In recent years, the use of Bislama as a first language has considerably encroached on indigenous languages, whose use in the population has receded from 73.1 to 63.2 percent between 1999 and 2009.[59] Religion Main article: Religion in Vanuatu Christianity is the predominant religion in Vanuatu, consisting of several denominations. The Presbyterian Church in Vanuatu, adhered to by about one-third of the population, is the largest of them. Roman Catholic and Anglican are other common denominations, each claiming about 15% of the population. Others are the Seventh-day Adventist Church, the Church of Christ,[60] Neil Thomas Ministries (NTM), as well as many other religious groups and denominations. Because of the modernities that the military in World War II brought with them when they came to the islands, several cargo cults developed. Many died out, but the John Frum cult on Tanna is still large, and has adherents in the parliament. Also on Tanna is the Prince Philip Movement, which reveres the United Kingdom's Prince Philip.[61] Villagers of the Yaohnanen tribe believed in an ancient story about the pale-skinned son of a mountain spirit venturing across the seas to look for a powerful woman to marry. Prince Philip, having visited the island with his new wife Queen Elizabeth, fit the description exactly and is therefore revered and even held as a god around the isle of Tanna.[62][63] Cuisine Main article: Cuisine of Vanuatu The cuisine of Vanuatu (aelan kakae) incorporates fish, root vegetables such as taro and yams, fruits, and vegetables.[14] Most island families grow food in their gardens, and food shortages are rare.[14] Papayas, pineapples, mangoes, plantains, and sweet potatoes are abundant through much of the year.[14] Coconut milk and cream are used to flavor many dishes.[14] Most food is cooked using hot stones or through boiling and steaming; very little food is fried.[14] The national dish of Vanuatu is the lap lap.[64] Health and education Vanuatu has a tropical climate and over 80% of the population lives in rural, isolated villages with access to their own gardens and food supplies. These geographically isolated communities have minimal access to basic health and education services. Churches and non-government organizations provide a minimal level of support to many rural villages. Vanuatu government health and education services are hard pressed to deal with the rapid increase of urban and peri-urban populations in informal and squatter settlements around Port Vila and to a lesser extent in Luganville.[65] Health services in Port Vila and Luganville provide reasonable health care, often supported and enhanced by visiting doctors.[39] Education is not compulsory, and school enrollments and attendance are among the lowest in the Pacific. A 1999 estimate for the literacy rate of people aged 15–24 years was about 87% and a 2006 estimate for adult literacy was 78%, although the actual figures are likely to be much lower. The rate of primary school enrolment rose from 74.5% in 1989 to 78.2% in 1999 and then to 93.0% in 2004 but then fell to 85.4% in 2007. The proportion of pupils completing a primary education fell from 90% in 1991 to 72% in 2004[65] and up to 78% in 2012. Port Vila and three other centres have campuses of the University of the South Pacific, an educational institution co-owned by twelve Pacific countries. The campus in Port Vila, known as the Emalus Campus, houses the University's law school. |
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