Vanuatu Economy

Economy

This South Pacific island economy is based primarily on small-scale agriculture, which provides a living for 65% of the population. Fishing, offshore financial services, and tourism, with about 50,000 visitors in 2004, are other mainstays of the economy. Mineral deposits are negligible; the country has no known petroleum deposits. A small light industry sector caters to the local market. Tax revenues come mainly from import duties. Economic development is hindered by dependence on relatively few commodity exports, vulnerability to natural disasters, and long distances from main markets and between constituent islands. GDP growth rose less than 3% on average in the 1990s. In response to foreign concerns, the government has promised to tighten regulation of its offshore financial center. In mid-2002 the government stepped up efforts to boost tourism. Agriculture, especially livestock farming, is a second target for growth. Australia and New Zealand are the main suppliers of tourists and foreign aid.