Copra is by far the most important cash crop (making up more than 35% of Vanuatu's exports), followed by timber, beef, and cocoa. Kava root extract exports also have become important.
Economic sectors
Financial sector
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.[4] 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.[5]
Vanuatu sells citizenship for about $150,000, and its passports allow visa-free travel throughout Europe. With demand from the Chinese market booming, passport sales may now account for more than 30% of the country's revenue.[6]
Vanuatu maintains an international shipping register in New York City.[citation needed]
Fishing industry
There is substantial fishing activity, although this industry does not bring in much foreign exchange.
Vanuatu claims an exclusive economic zone of 680,000 square kilometres (260,000 sq mi) and possesses marine resources.[citation needed] Some ni-Vanuatu are involved in fishing, along with foreign fleets.[7]
Mining industry
In contrast, mining activity is unsubstantial.[citation needed]
Agricultural sector
Exports include copra, kava, beef, cocoa and timber, and imports include machinery and equipment, foodstuffs and fuels.[citation needed]Copra, cocoa, kava and beef account for more than 60% of Vanuatu's total exports by value and agriculture accounts for 20% of GDP.[citation needed]
In addition to smaller productions of other agricultural products, like peanut (2.6 thousand tons) and cocoa (1.8 thousand tons).[8]
Tourism sector
Tourism is Vanuatu's fastest-growing sector, having comprised 40% of GDP in 2000.[citation needed] Industry's portion of GDP declined from 15% to 10% between 1990 and 2008. Government consumption accounted for about 27% of GDP.[citation needed]
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,[clarification needed] the economy was expected to grow by 3.9%, increasing to 4.3% in 2007.[citation needed]
Exports
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.[9]
Reform
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.[citation needed] The program was derailed when Barak Sope became prime minister. Under Prime MinisterEdward Natapei, reform programs were reintroduced.[citation needed]
Traditional economy
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.[10] The establishment of the Tangbunia Bank, to deal in customary wealth, was linked to this initiative.[11]
Economic statistics
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.[12]
^How selling citizenship is now big business. Sarah Treanor and Vivienne Nunis, business reporters, BBC News, Vanuatu. 10 October 2019. https://www.bbc.co.uk/news/business-49958628
