Vanuatu

VANUATU

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS VANUATUANS
DEPENDENCIES
BIBLIOGRAPHY

Republic of Vanuatu

[French]République de Vanuatu
[Bislama] Ripablik blong Vanuatu

CAPITAL: Port-Vila

FLAG: Red and green sections are divided horizontally by a gold stripe running within a black border and widening at the hoist into a black triangle on which is a pig's tusk enclosing two crossed yellow mele leaves.

ANTHEM: Yumi, Yumi, Yumi (We, We, We).

MONETARY UNIT: As of 1 January 1981, the vatu (vt) replaced at par value the New Hebridean franc as the national currency. There are coins of 100 vatu and notes of 100, 500, 1,000, and 5,000 vatu. vt1 = $0.00895 (or $1 = vt111.79) as of 2004.

WEIGHTS AND MEASURES: The metric standard is used.

HOLIDAYS: New Year's Day, 1 January; May Day, 1 May; Independence Day, 30 July; Assumption, 15 August; Constitution Day, 5 October; National Unity Day, 29 November; Christmas Day, 25 December; Family Day, 26 December. Movable religious holidays include Good Friday, Easter Monday, and Ascension.

TIME: 11 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Vanuatu, formerly the Anglo-French condominium of the New Hebrides, is an irregular Y-shaped chain of some 80 islands, with a total land area of about 12,200 sq km (4,710 sq mi) and a total coastline of 2,528 km (1,571 mi). Comparatively, the area occupied by Vanuatu is slightly larger than the state of Connecticut. Of the 70 inhabited islands, the largest is Espiritu Santo; the island of Éfaté is the administrative center. The island chain is about 800 km (500 mi) long and lies about 1,000 km (600 mi) w of Fiji and 400 km (250 mi) ne of New Caledonia. Vanuatu and France both claim Matthew and Hunter islands, which lie between Vanuatu and New Caledonia; one of the islands has been occupied by French forces.

Vanuatu's capital city, Port-Vila, is located on the island of Éfaté.

TOPOGRAPHY

The islands are of coral and volcanic origin; there are active volcanoes on several islands, including Ambrym, Lopevi, and Tanna. Most of the islands are forested and mountainous, with narrow coastal strips. The highest peak, Tabwemasana, on Espiritu Santo, rises 1,878 m (6,161 ft) above sea level. The islands are generally well watered. Being formed in a geologically active area, the islands experience occasional earthquakes. Though these are generally minor, a 6.8 magnitude earthquake was recorded at 90 miles (140 km) north of Luganville, Espiritu Santo, on 5 February 2005.

CLIMATE

The tropical oceanic climate is moderated by southeastern trade winds, which blow between the months of May and October. Winds are variable during the remainder of the year, and cyclones may occur. Average midday temperatures in Port-Vila range from 25°c (77°f) in winter to 29°c (84°f) in summer. Humidity averages about 74%, and rainfall on Éfaté is about 230 cm (90 in) a year.

FLORA AND FAUNA

Despite its tropical forests, Vanuatu has a limited number of plant and animal species. There are no indigenous large mammals, poisonous snakes, or spiders. The 19 species of native reptiles include the flowerpot snake, found only on Éfaté. There are 11 species of bat (3 unique to Vanuatu) and 61 species of land and water birds. While the small Polynesian rat is thought to be indigenous, the large species arrived with Europeans, as did domesticated hogs, dogs, and cattle. The wild pig and fowl appear to be indigenous.

The region is rich in sea life, with more than 4,000 species of marine mollusks. Coneshell and stonefish carry poison fatal to humans. The giant East African snail arrived only in the 1970s but already has spread from the Port-Vila region to Luganville.

ENVIRONMENT

Vanuatu's population growth has caused concern for the environment in several areas. Water pollution in urban areas is a problem due to inadequate sanitation systems. A majority of the country's population does not have access to a reliable supply of safe drinking water. The nation's logging industry threatens the forests and contributes to the problem of soil erosion. The reefs on Vanuatu's coasts, which are the home of the country's marine life, are threatened by inappropriate fishing methods and siltation. In 1987, the government formed the National Advisory Committee on the Environment (NACE) to address the nation's developing environmental concerns.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 5 types of mammals, 7 species of birds, 2 types of reptiles, 5 species of fish, and 10 species of plants. The estuarine crocodile, hawksbill turtle, Fiji banded iguana, and insular flying fox are threatened species.

POPULATION

The population of Vanuatu in 2005 was estimated by the United Nations (UN) at 218,000, which placed it at number 172 in population among the 193 nations of the world. In 2005, approximately 3% of the population was over 65 years of age, with another 42% of the population under 15 years of age. There were 104 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 2.6%, a rate the government viewed as too high. A high fertility rate, 4.3 births per woman, contributed to the high rate of population growth. The projected population for the year 2025 was 304,000.

The overall population density was 18 per sq km (46 per sq mi). The population is unevenly distributed, with the vast majority of Vanuatuans living in some 2,000 small villages. The most populous islands are Éfaté, Espiritu Santo, and Malekula.

The UN estimated that 21% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 4.09%. The capital city, Port-Vila, had a population of 34,000 in that year.

Luganville on Espiritu Santo, the only other large town, had a population of 10,738.

MIGRATION

Vanuatu's earliest known settlers probably migrated from the northwestern Pacific about 3,000 years ago. They were followed a thousand years later by migrants from the Solomon Islands. Tradition describes a series of subsequent incursions. In the 19th century, thousands of New Hebrides islanders were recruited as indentured laborers for plantation work in Australia, Fiji, New Caledonia, and Samoa. This migration gradually died down after the establishment of the Anglo-French Condominium, although voluntary emigration to New Caledonia continued until independence. In recent years, adverse economic conditions have encouraged emigration to Fiji, New Zealand, and the United States. The net migration rate in 2005 was estimated as zero migrants per 1,000 population. Worker remittances in 2002 amounted to $31 million. The government views the migration levels as satisfactory.

ETHNIC GROUPS

Approximately 98% of the total population are of Melanesian origin. French constitute about 4% of the population. The remaining 2% is made up of Vietnamese, Chinese, and other Pacific Islanders.

LANGUAGES

More than 100 languages and dialects are spoken in Vanuatu. Melanesian, the principal language, is related to Fijian and New Caledonian speech. Pidgin English, known as Bislama or Bichelama, is recognized by the constitution as the lingua franca, although English and French are also official languages. The national anthem is in Bislama, which is also used in parliamentary debate, with the proceedings reported in English and French as well. Children often speak as many as four languages and every aspect of public life—including education, law, and the media—is complicated by language problems.

RELIGIONS

A majority of the population is considered to be Christian, though many include indigenous customs with their practice. The Anglican, Presbyterian, and Roman Catholic churches first began missionary work in the New Hebrides during the 19th century. More recently, the Seventh-Day Adventists and other nontraditional Protestant groups have been active in mission work. While most of the mission schools have been handed over to the government, missionaries have continued to make important contributions to education and health.

According to the latest estimates, about 48% of the population were Presbyterians, 15% were Roman Catholics, 12% were Anglican, 7.6% followed indigenous beliefs, 6.2% were Seventh-Day Adventist, 3.8% were members of the Church of Christ, and 15.7% were designated as other. Muslims are also active within the country. There are small groups of Jehovah's Witnesses and Mormons. Since 1940, the John Frum Movement (political party and indigenous religion based on a rejection of the white Christian's beliefs but not his goods) has flourished, mainly on Tanna and provides a remarkable example of religious development in a situation of cultural challenge and transition. Membership, however, is only about 5% of the population.

The constitution allows for religious freedom while making a commitment to traditional values of Christian principles. Some subsidies are offered to Christian churches and the government maintains good relations with the Vanuatu Christian Council through the Ministry of Home Affairs.

TRANSPORTATION

During World War II, Vanuatu became an important Allied base, and many roads and airstrips were built by the US forces. In 2002, there were 1,070 km (665 mi) of roads, of which 256 km (159 mi) were paved. In 2003, there were 8,350 passenger cars and 4,450 commercial vehicles registered for use.

There were 30 small usable airfields serving all the main islands in 2004, of which 3 had paved runways as of 2005. The chief airports are Bauerfield, on Éfaté, and Pekoa, on Espiritu Santo; both have been upgraded to handle jet aircraft. Air Vanuatu, the national airline operated by Ansett Airlines of Australia, maintains regular service to Australia; an internal airline, Air Melanesiae, links 22 airfields on various islands. Other external service is provided by Air Pacific, UTA, Polynesian Airlines, Solair, and Air Nauru. Port-Vila and Luganville are the chief seaports. In 2001 (the latest year for which data was available), 97,500 passengers were carried on scheduled domestic and international flights. Small ships provide frequent interisland service. Vanuatu maintains a policy of open registry for merchant ships, allowing foreign ship-owners to avoid the higher costs and regulations of registration under their own flags. As of 2005, there were 52 ships in the Vanuatuan merchant fleet of 1,000 GRT or more, with a total capacity of 1,192,474 GRT.

HISTORY

Although the Portuguese navigator Pedro Fernandes de Queir established a short-lived settlement on Espiritu Santo in 1606, little more is known about the history of the New Hebrides until French and British explorers arrived in the late 18th century. Captain James Cook discovered, named, and charted most of the southern islands in 1774. The next century brought British and French missionaries, planters, and traders, and for many years the islanders suffered from the depredations of the recruiting ships and from other lawless acts by Europeans in the region.

By the Anglo-French Convention of 1887, a joint naval commission was established, with a resident commissioner to protect the lives and interests of the islanders. In 1906 following a London conference, the Anglo-French Condominium was established, largely to settle land claims and to end difficulties caused by lack of clear local jurisdiction. Indigenous political activity developed after World War II, with increasing native concern over land alienation and European dominance.

In 1975 a representative assembly replaced the nominated advisory council under which the New Hebrides had been governed; 29 assembly members were elected by universal suffrage, nine members represented economic interests, and four members represented the traditional chiefs. In 1977 the National Party (Vanuaaku Pati), which held 21 of 42 assembly seats, demanded independence and staged a boycott of the legislature; in response, at a conference in Paris, self-government was agreed on for 1978, to be followed by a 1980 referendum on independence. After considerable difficulty, a constitutional conference in 1979 finally agreed on an independence constitution. In the November 1979 elections for a newly constituted, fully elective assembly, the National Party, led by Father Walter Lini, obtained 26 of the 39 seats.

In May 1980 however, a dissident francophone group, based on Espiritu Santo, attempted to break away and declared an independent government of Vemarana, under Jimmy Stevens and the Nagriamal Party. Attempts made during June to resolve the differences between the new central government and the rebels failed, and UK and French troops were sent to Luganville on 24 July. No shots were fired, but the soldiers remained until Vanuatu's formal declaration of independence on 30 July 1980. They were then replaced at the new government's request by forces from Papua New Guinea, who were assisted by the local police in putting down the rebellion.

Since independence, Vanuatu (Our Land Forever) has followed a nonaligned foreign policy. It became the first South Pacific nation to join the nonaligned movement, and in January 1987 it signed a controversial fishing agreement with the USSR. In May 1987 Vanuatu announced a ban on all military ships and aircraft in a dispute over a proposed Libyan diplomatic mission. The dispute ended with the expulsion of two Libyan diplomats. Relations with the French government remained strained throughout much of the Lini government's rule, though they improved at the end of 1989 with the signing of the Matignon Accord relating to New Caledonia.

In December 1988 President George Ati Sokomanu attempted to dismiss the Lini government by ordering the dissolution of the country's parliament. Sokomanu appointed Barak Sope as prime minister. Lini refused to surrender office and reconvened parliament. Sope and several supporters were arrested and charged with inciting mutiny. Sope was sentenced to six years' imprisonment.

Fr. Lini lost a parliamentary vote of confidence in September 1991 and he was replaced by Donald Kalpokas. In December 1991 the francophone Union of Moderate Parties (UMP), led by Maxime Carlot Korman, won the largest bloc of seats and formed a coalition government with the National United Party (NUP), led by Lini. Strains between the coalition members led to Lini joining the opposition in August 1993, but Carlot Korman's government survived the defection.

Parliamentary elections were again held in 1995, with the UMP winning slightly more seats than the Vanuatu Party (VP), led by Donald Kalpokas. Rialuth Serge Vohor was prime minister from November 1995 until a no-confidence vote in parliament forced his resignation on 7 February 1996. Maxime Carlot Korman was elected prime minister, forming a coalition, and parliament appointed Kalpokas deputy prime minister. The coalition was considered to be weak, however. On 30 September 1996 Korman was ousted by a no-confidence motion. Vohor was reelected as prime minister. The Vohor government repealed the Ombudsman's Act, but President Jean Marie Leye refused to declare this piece of legislation as law. Leye, in the face of dissent and political crises, took action to dissolve parliament. The ruling coalition refused to step down, questioning the constitutional right of Leye to do this. The Court of Appeal ruled in January 1998 that Leye's actions were legal, thus opening the way for a new general election. In the election held 6 March 1998 the VP of Kalpokas improved its earlier performance, but could not claim a majority. Kalpokas rejoined forces with Fr. Lini and the NUP and coalesced with minority party legislators to gain a clear majority. Kalpokas was elected prime minister. Willie Jimmy was named deputy prime minister on 19 October 1998. Kalpokas resigned to avoid a no-confidence vote in late 1999, and Barak Sope of Melanesian Progressive Party (MPP) became prime minister. In 1999, the government introduced a Comprehensive Reform Program, to combat corruption and abuse of power by government officials. It included a revamping of state administration, an increase in private sector development, a reduction in the public service sector, and the enactment of a leadership code of conduct.

At the South Pacific Forum in June 1999 Vanuatu supported a proposed Pacific Free Trade Area (FTA) that would initially include 14 countries in the region. The South Pacific Forum set up the Pacific Kava Council to work at protecting the regional rights to kava and its uses. The kava plant's reputed relaxation properties had attracted the attention of producers of herbal medicines. The establishment of kava plantations in Central America threatened the Pacific Islands' production. Vanuatu joined with other small island developing states (SIDS) through the United Nations SIDSnet, an Internet project linking over 40 island nations worldwide to address issues like the economic hurdles of isolation and small markets. The United Nations Environment Program (UNEP) issued a report assessing the ecological and population threats faced by SIDS, Vanuatu included. The UN's Intergovernmental Panel on Climate Change announced its predictions on the consequences of global warming. Vanuatu was mentioned as already affected by inundation of low-lying areas and coastal regions by rising oceans.

In April 2001, Barak Sope was ousted as prime minister in a vote of no confidence, and Edward Natapei became prime minister. The new government undertook investigations into Sope's business dealings, and in November, Sope was charged with two counts of forgery. He was sentenced to three years' imprisonment but was subsequently pardoned by President Fr. John Bani. Natapei was reelected prime minister in May 2002, after parliamentary elections held on 30 April, in which his Vanua'aku Party took 15 seats and the Union of Moderate Parties took 14 seats.

Presidential and legislative elections were held in 2004. The controversial prime minister Serge Vohor, who took office in July 2004, was ousted following a no-confidence vote that December; Vohor had attempted to switch Vanuatu's diplomatic recognition of China to Taiwan. Ham Lini became prime minister in December 2004. In April and May 2004, Alfred Masing Nalo was elected president, but was later removed from office after the Supreme Court invalidated the result of the election. Kalkot Matas Kelekele was elected president in August 2004. The next presidential election was to be held in 2009, and the next prime minister election was scheduled to take place after the general elections in 2008.

GOVERNMENT

Under the independence constitution adopted in 1979 and effective in 1980, Vanuatu is an independent republic within the Commonwealth of Nations. The head of state is the president (Kalkot Matas Kelekele since August 2004); the head of government is the prime minister (Ham Lini since December 2004). The unicameral legislature consists of 52 members (39 before 1987, and 50 before 1998) elected by universal adult suffrage to four-year terms. The cabinet is responsible to parliament, and the president is chosen by an electoral college for a five-year term. The electoral system includes a degree of proportional representation. A Council of Chiefs chosen by their peers in the chiefs' district councils advises the government on the protection of Vanuatuan languages and culture.

POLITICAL PARTIES

The country saw six political parties be represented in parliament in the April 2002 elections: the Union of Moderate Parties (UMP, Serge Vohor); the National United Party (NUP, led by Father Walter Lini until his death in February 1999; thereafter by Dinh Van Than; leadership in 2005 was in question); the Vanua'aku Party (VP, Edward Natapei); Melanesian Progressive Party (MPP, Barak Sope); the Vanuatu Republic Party (VRP, Maxime Carlot Korman), and the Vanuatu Green Party (VGP, Moana Carcasses). Also represented in Vanuatu are the Jon Frum Movement (Song Keaspai); the Friend Melanesian Party (FMP, Albert Ravutia); and the Tan Union (TU, Vincent Boulekone). In the July 2004 elections, the NUP took 10 seats, UMP took 8, the VP won 8, VRP 4, MPP 3, VGP 3, and other candidates held 16 seats. The next parliamentary elections were to be held in 2008.

LOCAL GOVERNMENT

Vanuatu is divided into six provinces (Malampa, Penama, Sanma, Shefa, Tafea, Torba). There are municipal councils in Port-Vila and Luganville, and community councils elsewhere. Espiritu Santo and Tanna have special regional councils.

JUDICIAL SYSTEM

Despite the great difficulty in unifying laws based on the very different English and French traditions, Vanuatu has sought to establish a single system based on British criminal procedure and the French penal code. The constitution establishes a Supreme Court, with a chief justice and three other judges, as well as an appeals court. Village and island courts have jurisdiction over customary and other matters.

The judiciary is independent of the executive and free from military influence. The constitution guarantees a range of procedural due process protections including the presumption of innocence, fair public trial, habeas corpus, and the prohibition against double jeopardy.

ARMED FORCES

The nation maintains close links with Papua New Guinea, where Vanuatuan cadets train for a mobile defense force under the auspices of the Australian Ministry of Defense, which also helps to train skilled manpower for national development tasks.

INTERNATIONAL COOPERATION

Vanuatu joined the United Nations on 15 September 1981 and participates in ESCAP and several nonregional specialized agencies, such as the FAO, the World Bank, UNESCO, UNIDO, and the WHO. It also belongs to the Asian Development Bank (which opened a regional office in Port-Vila in 1984), the ACP Group, G-77, the Pacific Island Forum, the South Pacific Regional Trade and Economic Cooperation Agreement (Sparteca), the Alliance of Small Island States (AOSIS), and the Commonwealth of Nations. The country holds observer status in the WTO.

Vanuatu has taken an active role in Pacific affairs, campaigning for a nuclear-free zone and advocating independence for New Caledonia. Vanuatu has established diplomatic relations with a number of OECD countries, as well as China, Cuba, Vietnam, and Libya. The country is part of the Nonaligned Movement.

In environmental cooperation, Vanuatu is part of the Convention on Biological Diversity, CITES, the London Convention, the Kyoto Protocol, the Montréal Protocol, MARPOL, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Vanuatu has a mixed traditional and modern economy. Agriculture supports about 65% of the population, but the service industry is playing an increasingly important role in the economy. Tourism has been developed since the 1980s and, together with financial services, has become an important foreign exchange earner. GDP grew by less than 3% a year in the 1990s. For the three years 2000 to 2002, GDP growth averaged 3% and inflation averaged 3%. During this period the islands had to deal with the extensive damage from two severe earthquakes, each followed by sizeable tsunamis: in November, 1999 on the northern island of Pentecote, and in January 2002, centered on the capital and surrounding areas. The absence of personal and corporate income taxes has made Vanuatu an offshore financial center, and the government also earns fees from a "flag of convenience" shipping registry.

The GDP growth rate was 2.8% in 2004, up from 1.6% in 2003; in 2005, the economy was expected to grow by 2.8%. The inflation rate has fluctuated slightly, but at 1.8% in 2004, it did not pose a problem to the economy. Strong economic development is hindered by the geographic isolation of the country, its vulnerability to natural disasters, and its dependency on relatively few export commodities.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Vanuatu's gross domestic product (GDP) was estimated at $580.0 million. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $2,900. The annual growth rate of GDP was estimated at 1.1%. The average inflation rate in 2003 was 3.1%. It was estimated that agriculture accounted for 26% of GDP, industry 12%, and services 62%.

According to the World Bank, in 2001 remittances from citizens working abroad totaled $16 million or about $76 per capita and accounted for approximately 6.8% of GDP.

LABOR

About 80% of the population is engaged in peasant labor either for subsistence or producing cash crops such as copra. As of 2002, there were approximately 25,000 persons participating in the formal economy as wage earners. In 2000 (the latest year for which data was available), agriculture accounted for 65% of the labor force, with industry at 5% and the services sector at 30%. There was no unemployment data available. The wage-labor force is concentrated in Port-Vila and Luganville.

For persons engaged in government enterprises, port work, construction, and certain other jobs, the terms of employment and wages are set by legislation. The nation's first trade unions were formed in 1984. In 2002 there were seven trade unions; the largest two were the Oil and Gas Workers' Union and the Vanuatu Airline Workers' Union. Union membership has fallen from 4,000 in 1994 to less than 1,000 in 2002.

The law prohibits children under 12 from working. Children between 12 and 18 may work under restricted hours and conditions. The Labor Department effectively enforces these laws. In 2002, the minimum wage was $143 per month for all workers. This does not provide an adequate living and most families subsidize this amount with subsistence farming. The law mandates a 44-hour maximum workweek. The Employment Act provides health and safety standards but these are not effectively enforced.

AGRICULTURE

About 9% of the land is cultivated. While most crops, including yams, taro, manioc, sweet potato, and breadfruit, are raised for local consumption, cash crops like copra, cocoa, and coffee have been increasingly important. Production of coconuts totaled 240,000 tons in 2004. Copra exports have been declining as a share of total exports, from 43% in 1995 to 8% in 2002. Vanuatu maintained an agricultural surplus of $2.6 million in 2004, with Bangladesh and Japan as the leading markets.

In 1983, Vanuatu's first agricultural census was taken, with British assistance. A land alienation act passed in 1982 limits land ownership to indigenous owners and their descendants, but expatriates can lease land for up to 75 years.

ANIMAL HUSBANDRY

Hogs and fowl form part of the village economy. Vanuatu is ideal for cattle, and large numbers are raised on plantations; in 2005 there were an estimated 152,000 head of cattle, up from around 124,000 in 1990. The growing meat-packing industry produces frozen, chilled, and tinned beef; production of beef totaled about 3,300 tons (dressed carcass weight) in 2005. The beef industry is centered on the island of Espiritu Santo, where the country's main abattoir is located. Beef is exported primarily to Japan, with a lesser amount going to New Caledonia.

FISHING

Although the South Pacific Fishing Co., a joint Vanuatuan government and Japanese venture, has facilities at Luganville that freeze and export both tuna and bonito to Japan and the United States, the full fishery potential has not been realized. Fishing is focused on domestic consumption; exporting fish requires a government permit. Vanuatu's catch was 31,394 tons in 2003; exports totaled $1.9 million that year.

FORESTRY

About 37% of the total land area is forest or bushland. Total roundwood production in 2004 was 119,000 cu m (4.2 million cu ft), with 76% burned as fuel. Sawnwood production totaled 28,000 cu m (988,000 cu ft) that year, and exports of forest products were valued at $3 million. The government approved the establishment of a large commercial forestry plantation on Espirito Santo in 1987.

MINING

Vanuatu had few known minerals, although gold deposits have been discovered. A small manganese mine on Éfaté ceased exports in 1980.

ENERGY AND POWER

Temporary generators established throughout the islands by the United States during World War II (1939–45) have mostly deteriorated. Total installed capacity was about 12,000 kW in 2002, all of it conventional thermal. Electricity production in 2002 totaled 42 million kWh, all of it from fossil fuels. Consumption of electricity that year was 39 million kWh.

All hydrocarbon needs were met by imports. In 2002, imports and demand for refined petroleum products each averaged 610 barrels per day. There were no imports or consumption of natural gas or coal in 2002.

INDUSTRY

The industrial sector is small: in 1990 it contributed about 12.3% to GDP; in 1996, 13% and in 2001, 11.5%. The leading industries are fish and food freezing, wood processing, and meat canning. The small manufacturing sector, accounting for 5.5% of GDP in 1990 and 5% in 2001, is geared to toward domestic consumption. Indigenous crafts include basketry, canoe building, and pottery. In 1990, National Breweries, a joint venture with Sweden, began producing Tusker beer and Pripps Lager.

In 2003, the main contributor to the GDP was the transport and communications sector (32.4%); agriculture came in second with 19.3%. Manufacturing and construction had the smallest share in the economy, with 3.6% and 2.5% respectively.

SCIENCE AND TECHNOLOGY

There is no advanced technology apart from overseas aid programs.

DOMESTIC TRADE

A large part of the population still relies on barter. In Port-Vila, European businesses dominate commercial life; there are hotels, supermarkets, fashion shops, and patisseries, as well as Australian steak houses and small Chinese restaurants. Some Vanuatuans have entered the cash economy in urban areas. There is a very small light industry section that supplies the local markets. The nation's numerous cooperative societies handle most of the distribution of goods on the islands. A value-added tax applies to most goods and services.

Normal business hours in the capital are 7:30 to 11:30 am and 1:30 to 4:30 pm, Monday through Friday. Banks in Vanuatu are open on weekdays from 8 to 11:30 am and 1:30 to 3 pm.

FOREIGN TRADE

In 2000, exports totaled $23.2 million and imports amounted to $86.7 million. Service receipts have helped offset the traditionally adverse trade balances. A commodities marketing board exports copra and cocoa, and cooperatives play a major role in foreign trade. Most of Vanuatu's export commodities are foodstuffs, including oil seeds, (34%), vegetables (15%), wood (13%), meat (12%), cocoa (4.7%), and fish (1.3%).

In 2004, exports totaled $205 million (FOB—Free on Board), while imports grew to $233 million (CIF—Cost and Freight). Most of the exports went to Thailand (47%), Malaysia (18.4%), Japan (7.5%), Belgium (5.4%), and China (4.9%). Imports included machinery and transport equipment, food and live animals, basic manufactures, and mineral fuels, and primarily came from Taiwan (24%), Australia (16.5%), Japan (11.4%), Singapore (8.5%), New Zealand (7.2%), Fiji (6.3%), and the United States (4.4%).

Country	Exports	Imports	Balance
World	23.2	86.7	-63.5
Bangladesh	5.0	…	5.0
Japan	2.8	4.4	-1.6
United Kingdom	2.4	0.1	2.3
China, Hong Kong SAR	1.4	1.8	-0.4
Australia	1.4	38.5	-37.1
New Caledonia	1.4	5.0	-3.6
Fiji	1.3	7.9	-6.6
French South Antartic Territories	0.8	…	0.8
New Zealand	0.7	10.0	-9.3
Netherlands	0.7	0.1	0.6
(…) data not available or not significant.

Current Account			-41.3
Balance on goods		-65.0
Imports	-91.8
Exports	26.8
Balance on services		40.6
Balance on income		-11.8
Current transfers		-5.1
Capital Account			-4.7
Financial Account			39.6
Direct investment abroad		-0.7
Direct investment in Vanuatu		15.5
Portfolio investment assets		2.1
Portfolio investment liabilities		…
Financial derivatives		…
Other investment assets		51.8
Other investment liabilities		-29.1
Net Errors and Omissions			-5.0
Reserves and Related Items			11.3
(…) data not available or not significant.

BALANCE OF PAYMENTS

Continuing trade deficits have been offset by aid from the United Kingdom and France, but this assistance is being steadily reduced.

The US Central Intelligence Agency (CIA) reported that in 2000 the purchasing power parity of Vanuatu's exports was $22.8 million while imports totaled $87.5 million resulting in a trade deficit of $64.7 million.

The International Monetary Fund (IMF) reported that in 2001 Vanuatu had exports of goods totaling $20 million and imports totaling $78 million. The services credit totaled $119 million and debit $73 million.

Exports of goods and services totaled $38 million in 2004, up from $27 million in 2003. Imports grew from $91 million in 2003, to $112 million in 2004. The resource balance was consequently negative, and on a downward path—from -$64 million in 2003 to -$74 million in 2004. A different trend was registered for the current account balance, which improved from -$28 million in 2003, to -$15 million in 2004. Foreign exchange reserves (excluding gold) grew to $62 million in 2004, covering more than six months of imports.

BANKING AND SECURITIES

Vanuatu's banking system includes a Central Bank, local retail banks, and a Development Bank that provides loans for agricultural projects, housing, and industrial development. The country's Financial Centre, a tax haven created by the British in 1971, is the third-largest source of government revenue. Favorable regulatory and tax structures have stimulated foreign interest in Vanuatu as an international financial center; more than 600 offshore companies and banks were registered in Port-Vila in 1985. Local banks require no minimum deposits for vatu accounts and a minimum of us$5,000, or the equivalent in major specified currencies, for foreign currency holdings. Vanuatu has no double taxation agreements with other countries, ensuring maximum confidentiality for international financial transactions. In late 1999, a number of foreign bank-including Deutsche Bank, Banker's Trust, and the Bank of New York-banned trading in us with Vanuatu because of suspected illegal activity being carried on through the Vanuatu financial center. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $55.3 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $245.6 million. The money market rate, the rate at which financial institutions lend to one another in the short term, was 5.5%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6.5%.

There is no stock exchange.

INSURANCE

Insurance coverage is available through agents of overseas companies, mainly British and French.

PUBLIC FINANCE

The US Central Intelligence Agency (CIA) estimated that in 2003 Vanuatu's central government took in revenues of approximately $52.6 million and had expenditures of $54.3 million. Revenues minus expenditures totaled approximately -$1.7 million. Total external debt was $83.7 million.

The International Monetary Fund (IMF) reported that in 1997, the most recent year for which it had data, central government revenues were vt6,858 million and expenditures were vt7,023 million. The value of revenues was us$59 million and expenditures us$61 million, based on a official exchange rate for 1997 of us$1 = vt115.87 as reported by the IMF. Government outlays by function were as follows: general public services, 33.8%; public order and safety, 8.4%; economic affairs, 26.3%; housing and community

Revenue and Grants	6,858	100.0%
Tax revenue	5,718	83.4%
Social contributions	…	…
Grants	653	9.5%
Other revenue	487	7.1%
Expenditures	7,023	100.0%
General public services	2,372	33.8%
Defense	…	…
Public order and safety	587	8.4%
Economic affairs	1,846	26.3%
Environmental protection	…	…
Housing and community amenities	259	3.7%
Health	655	9.3%
Recreational, culture, and religion	35	0.5%
Education	1,269	18.1%
Social protection	…	…
(…) data not available or not significant.

amenities, 3.7%; health, 9.3%; recreation, culture, and religion, 0.5%; and education, 18.1%.

TAXATION

Vanuatu has no income, corporation, or sales tax. Government revenues are derived from indirect taxes, which include stamp taxes, an excise tax on locally produced alcoholic beverages, a 10% hotel tax, and a rent tax. In 2000 the OECD listed Vanuatu as one of 38 uncooperative tax havens. In 2002, it was one of seven that remained on the list. In May 2003, however, Vanuatu was removed from the blacklist, having promised an OECD representative to make the required reforms.

CUSTOMS AND DUTIES

Vanuatu imposes tariffs on both an ad valorem and specific basis. Tariff rates average 15–20%; however, rates for luxury goods could reach 200%. Printed matter is exempt. A 5% service tax is also charged on all imported goods. Export duties are levied on the country's primary products.

FOREIGN INVESTMENT

The government encourages all forms of foreign investment, especially if there is joint local participation. There are no major foreign ownership restrictions, and duty exemptions are available on application to the Ministry of Finance. In late 1999 Vanuatu's Department of Trade announced that, to be considered, all foreign investment proposals must be accompanied by us$38,000. This action was taken because of the high number of project proposals approved that have not been implemented. According to statistics published by UNCTAD, foreign direct investment (FDI) in Vanuatu was us$30.2 million in 1997, but dropped to us$20.4 million in 1998, and averaged us$20.275 for the three years following (1999 to 2001).

ECONOMIC DEVELOPMENT

The British independence settlement provided grants of £23.4 million to Vanuatu, including £6.4 million in budgetary aid (with additional grants provided annually), £4 million for technical aid, and £13 million for development projects aimed at promoting national economic self-sufficiency. Projects under the five-year development plan for 1982–86 included harbor development, agricultural training, and road improvements. Aid for other infrastructural development is provided by Australia, New Zealand, the UN, and the EU. Government development projects emphasize local participation and preservation of Vanuatu's cultural heritage. In 1995, Vanuatu received us$45.8 million in aid from international sources. In 2000, Vanuatu was listed on the OECD's list of "uncooperative" tax havens. In 2002, it was one of only seven jurisdictions still on the list of not having take corrective action. In May 2003, however, Vanuatu was the first of the seven to be removed from the blacklist having agreed, after discussions with OECD representatives, to institute the necessary reforms. Vanuatu remains one of the top 10 "flags of convenience" registries.

The economy of Vanuatu recovered in 2003 and 2004, and the trend is expected to continue in coming years, although not at exceptional rates. The economic growth will primarily be driven by the beef industry, and by a rising output in the forestry industry.

The tourism industry is also expected to bring increasing foreign exchange in the country, although the country's main airline might be facing problems in the future (due to increasing oil prices).

SOCIAL DEVELOPMENT

The majority of the people cling to traditional village life. The extended family system ensures that no islanders starve, while church missions and the social development section of the Education Ministry concentrate on rural development and youth activities. The government incorporates family planning into its overall maternal and child health program. A provident fund system provides lump-sum benefits for old age, disability, and death. Workers contributed 4% of earnings and employers contribute 6% of payroll. Pensions are provided at the age of 55.

Women are still largely confined to traditional cultural roles, and most marriages include a "bride-price" that encourages men to consider their wives as possessions. Women generally do not own land. Village chiefs usually act to reinforce the subordinate roles of women and are thus viewed as a primary obstacle to female advancement. There are no female leaders in Vanuatu's civic, business, or religious institutions. A disproportionate number of women lost their jobs due to cutbacks in government employment. Violence against women, especially domestic abuse, is common. Most cases of violence against women go unreported because women are afraid of further abuse and do not understand their rights. As of 2004, there were no governmental agencies to support victims of domestic violence.

Human rights are generally well respected in Vanuatu.

HEALTH

Malaria is the most serious of the country's diseases, which also include leprosy, tuberculosis, filariasis, and venereal diseases. Safe water was available to 87% of Vanuatu's population.

Medical care is provided by 94 hospitals, health centers, and clinics administered by the Ministry of Health, assisted by the World Health Organization and a number of voluntary agencies. Local training schemes in basic community nursing are provided by Port-Vila hospitals and local clinics train health and sanitation orderlies. In 2004, there were an estimated 11 physicians and 235 nurses per 100,000 people.

Only 12% of married women were using contraception. In 2005, the infant mortality rate was estimated at 55.16 per 1,000 live births. In the same year the estimated birth rate (24.8 per 1,000 people) far exceeded the general mortality rate (8.3 per 1,000 people). The fertility rate was 3.1 children per woman. Average life expectancy was an estimated 62.85 years in 2004. The immunization rates for children under one were as follows: diphtheria, pertussis, and tetanus, 74%; polio, 74%; measles, 53%; and tuberculosis, 86%.

HOUSING

In urban areas only the emerging middle class can afford government-built housing. Other migrants to the towns buy plots of land and build cheap shacks of corrugated iron and waste materials, principally near Port-Vila and Luganville. The vast majority of villagers still build their own homes from local materials. The majority of dwellings are traditional Melanesian houses with earth or coral floors, no glass windows, and palm, bamboo, or cane walls and roofing. The most widely used exterior construction material was bush. In 1998, 87% of the population had access to safe drinking water. In 2001, there were 89 construction approvals granted for residential housing.

EDUCATION

Primary education is available for almost all children except in a few remote tribal areas. Education is provided in either English or French. Full secondary education is provided by the Anglophone Malapoa College and the French Lycée at Port-Vila; limited secondary education is also available in five English postprimary schools and three French mission schools.

In 2001, about 75% of children between the ages of four and five were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 94% of age-eligible students. In 2001, secondary school enrollment was about 27% of age-eligible students. It is estimated that about 96.2% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 23:1 in 2003; the ratio for secondary school was about 16:1. In 2003, private schools accounted for about 3.8% of primary school enrollment and 20.6% of secondary enrollment.

For postsecondary education, especially medical and technical training, selected students go principally to Fiji, Australia, and New Zealand. The adult literacy rate for 2004 was estimated at about 74%. As of 2003, public expenditure on education was estimated at 6.3% of GDP, or 28.6% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library is housed in the Vanuatu Cultural Center in Port-Vila. The Port-Vila Public Library, also a part of the Cultural Center, has a fairly well-stocked library of both French and English books and periodicals and houses fine collections of Melanesian art and artifacts, as well as a valuable stamp collection; it is the only public library service in the country. The secondary schools also have libraries, and there is a small library in the parliament building. Éfaté has a small museum displaying South Pacific artifacts and current works of art. The Vanuatu Cultural Center maintains a National Museum. There is a private fine arts museum are located in Port-Vila.

MEDIA

Vanuatu is linked by telegraph and telex to Hong Kong; Paris; Noumea, New Caledonia; and Sydney, Australia. An earth satellite tracking station came into service in 1979. In 2003, there were 6,500 mainline phones and 7,800 mobile phones in use nationwide. Radio Vanuatu (founded 1966) broadcasts daily in English, French, and Bislama. As of 2002, there were four radio stations and one television station, all operated by the state. In 1997 there were 254 radios and 10 television sets per 1,000 population. In 2003, there were 7,500 Internet subscribers served by 512 Internet hosts. The weekly government newspaper, The Vanuatu Weekly, appears in English, French, and Bislama. In 2002, it had a circulation of 1,700. In 2005, there were also four privately owned weekly papers. The constitution provides for free speech and a free press; however, in practice these provisions are not always honored, threatening opposition groups and media representatives with revocations of licenses and permits.

ORGANIZATIONS

There are a great number of European organizations, but the cooperative movement has had the greatest local impact. Cooperative units have organized a training center in Port-Vila for such skills as accounting, management, law, and marketing. Cooperatives receive British aid and government support but remain firmly independent. There is an active Vanuatu Credit Union League offering educational opportunities as well as financial services to members.

National youth organizations include the Vanuatu National Youth Council and the Vanuatu National Union of Students. There are several active sports associations promoting amateur competition for all ages in a variety of pastimes, including cricket, tennis, tae kwon do, and track and field. Many sports clubs are affiliated with the national Olympic Committee. The Vanuatu Association of Women Graduates promotes higher education opportunities for women. There are national chapters of the Red Cross Society, and UNICEF, and Habitat for Humanity.

TOURISM, TRAVEL, AND RECREATION

The most popular recreations in Vanuatu include marine sightseeing, deep-sea fishing, sailing, and beachcombing for shells. Citizens from most nations do not require visas. However, a valid passport and onward/return ticket are necessary. The number of tourist arrivals reached 50,400 in 2003, almost 58% of whom came from Australia. Tourist receipts totaled $71 million the same year. There were 10,793 rooms in hotels and other establishments with 28,235 beds and an occupancy rate of 35%. The average length of stay was nine nights.

The US Department of State estimated the daily cost of staying in Port Vila at $258 in 2005. Other areas ranged from $33 to $166 per day.

FAMOUS VANUATUANS

Father Walter Hayde Lini (1943–99), ordained as an Anglican priest in 1970, served as prime minister in Vanuatu from 1980 to 1991.

DEPENDENCIES

Vanuatu has no territories or colonies.

BIBLIOGRAPHY

Bennett, Michelle. Vanuatu. 4th ed. London, Eng.: Lonely Planet, 2003.

Bolton, Lissant. Unfolding the Moon: Enacting Women's Kastom in Vanuatu. Honolulu: University of Hawaii Press, 2003.

Craig, Robert D. Historical Dictionary of Polynesia. Lanham, Md.: Scarecrow Press, 2002.

Leibo, Steven A. East and Southeast Asia, 2005. 38th ed. Harpers Ferry, W.Va.: Stryker-Post Publications, 2005.

Lindstrom, Lamont. Knowledge and Power in a South Pacific Society. Washington, D.C.: Smithsonian Institution Press, 1990.