ECONOMY
Vanuatu's economy is primarily agricultural; 80% of the population is engaged in agricultural activities that range from subsistence farming to smallholder farming of coconuts and other cash crops. Copra is by far the most important cash crop (making up more than 35% of the country's exports), followed by timber, beef, and cocoa. Kava root extract exports also have become important. In addition, the government has maintained Vanuatu's preindependence status as a tax haven and international off-shore financial center. About 2,000 registered institutions offer a wide range of offshore banking, investment, legal, accounting, and insurance and trust-company services. Vanuatu also maintains an international shipping register in New York City. In 2002, following increasing international concern over money laundering, Vanuatu increased oversight and reporting requirements for its off-shore sector.
Coconut oil, copra, kava and beef account for more than 75% of Vanuatu's total agricultural exports and agriculture accounts for approximately 20% of GDP. Tourism is a key driver of the economy and contributed 20% of GDP in 2006.
Vanuatu claims an exclusive economic zone of 735,893 square kilometers and possesses substantial marine resources. Currently, only a limited number of ni-Vanuatu are involved in fishing, while foreign fleets exploit this potential.
Vanuatu economic growth of 3.4% in 2006 was broad-based and highly driven by the services sector especially tourism. Other sectors which contributed significantly were construction (15.7%), wholesale and retail sector (12.4%), and the real estate and business service sector (11.2%). The agricultural sector showed improved performance due to better domestic prices for copra. Other sectors including cocoa, beef, and kava continued to support the growth.
The Recognized Seasonal Employer (RSE) program is an agreement that allows unskilled Vanuatu laborers, such as fruit pickers and farm workers, to work in New Zealand. Starting from June 2007, RSE is anticipated to bring over 20 million vatu into Vanuatu's economy.
GDP (2006): $343.6 million.
Per capita income (2005): $1,576.
Real growth rate (2006): 4.0%.
Avg. inflation rate (2006): 1.8%.
Natural resources: Forests, agricultural land, marine resources.
Agriculture: Products--copra, cocoa, coffee, cattle, timber.
Industry: Types--copra production, beef processing, sawmilling, tourism, financial services.
Trade (2003): Exports--$135.27 million: coconut oil, copra, kava, beef. Major markets--EU 44.9%, Australia 12.1%, Japan 6.8%, New Caledonia 4.6%. Imports--$181.4 million: machines and transport equipment, food and live animals, basic manufactures, mineral fuels. Major suppliers--Australia 42.5%, New Zealand 13.0%, Fiji 8.6%, Singapore 6.2%.
Exchange rate (2005 avg.): 109.25 vatu=U.S.$1.
