V’s economy is mainly agricultural with over 80-percent of the residents engaged in agricultural activities ranging from subsistence farming to small stake farming of coconuts and a variety of additional cash crops.
Copra is the most important cash crop, responsible for over 35% of the nation’s exports. Timber, beef and cocoa and Kava root extract exports have become vital to the country’s economy as well.
Tourism is Vanuatu’s fastest-growing segment and accounts for 50% of GDP.
V claims an economic zone of almost 700,000 square kilometers which includes marine resources. Many ni-Vanuatu are engaged in fishing as are foreign fleets.
The hub for exports is Luganville, the country’s second-largest city. Sixty-five percent of exports leave through Luganville where 35% leave through Port Vila, the capital.
In 2007, the government declared the Year of the Traditional Economy and encouraged the exchange of seashells and pig tusks as it discouraged cast transactions. The government extended the experiment to 2008 and the Tangbunia Bank was connected to this effort.
As reported by Index Mundi’s Vanuatu Economy Profile 2018, Vanuatu scored 32.06 of a worldwide score of 42.94 in the June 2013 Euromoney Risk rankings.
GDP $1,237 billion
GDP — real growth rate: 2.6%
GDP — per capita
GDP by sector:
Labor force by occupation:
Unemployment rate: 1.5%
Currency: 1 vatu = 100 centimes
Economic Diversification in Vanuatu
The nation’s economy is ruled by tourism. Tourism’s growth is sustained by the second most important contributor, construction. Together, they have driven financial grown over the last two decades. The benefit to ni-Vanuatu has not been equitable. Development has been centered in Vanuatu’s most populated island, Efate and few tourists go outside Port Vila. Just as the benefits have not been distributed equitably, the medium and large business segments of Vanuatu’s private sector consists of foreign-owned businesses.
A conversation about the importance of inclusive, sustainable financial grown started before Cyclone Pam and continued. A primary focus of the conversation has been the development of industries other than tourism. “The Conversation” has had several articles pointing out how the country’s disproportionate dependence on tourism makes the nation vulnerable to economic shock and limits the extent of possible growth.
A balance between economic opportunities and labor mobility opportunities works with the production of low yield, high-value crops including coffee, honey, chocolate and coconut oil. The government is working on making tourism more inclusive through improved connections between tourism and agriculture. The provision of agricultural goods to resorts is one starting point.
While tourism will remain vital to Vanuatu’s economic future, the government also acknowledges travel is a tool by which the country can pay for imports and achieve self-sufficiency.
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