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Vanuatu Vanuatu ( or ; ), officially the Republic of Vanuatu (french: link=no, République de Vanuatu; Bislama: ''Ripablik blong Vanuatu''), is an island country located in the South Pacific Ocean. The archipelago, which is of volcanic origin, is ea ...
's
economy An economy (from Greek language, Greek οίκος – "household" and νέμoμαι – "manage") is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consum ...
is primarily agricultural; 80% of the population is engaged in agricultural activities that range from
subsistence farming Subsistence agriculture occurs when farmer A farmer (also called an agriculturer) is a person engaged in agriculture Agriculture is the science, art and practice of cultivating plants and livestock. Agriculture was the key development ...
to smallholder farming of
coconut
coconut
s and other cash crops. Copra is by far the most important cash crop (making up more than 35% of Vanuatu's exports), followed by
timber Lumber, also known as timber, is a type of wood Wood is a porous and fibrous structural tissue found in the Plant stem, stems and roots of trees and other woody plants. It is an organic materiala natural composite material, composite o ...

timber
,
beef Beef is the culinary name for meat Meat is animal flesh that is eaten as food. Humans have hunted and killed animals for meat since prehistoric times. The advent of civilization allowed the domestication of animals such as chickens, she ...
, and cocoa.
Kava
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. 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. 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. Vanuatu maintains an international shipping register in
New York City New York City (NYC), often simply called New York, is the List of United States cities by population, most populous city in the United States. With an estimated 2019 population of 8,336,817 distributed over about , New York City is also the L ...

New York City
.


Fishing industry

There is substantial fishing activity, although this industry does not bring in much foreign exchange. Vanuatu claims an exclusive economic zone of and possesses marine resources. Some ni-Vanuatu are involved in fishing, along with foreign fleets.


Mining industry

In contrast, mining activity is unsubstantial.


Agricultural sector

Exports include copra, kava, beef, cocoa and timber, and imports include machinery and equipment, foodstuffs and fuels. Copra, cocoa, kava and
beef Beef is the culinary name for meat Meat is animal flesh that is eaten as food. Humans have hunted and killed animals for meat since prehistoric times. The advent of civilization allowed the domestication of animals such as chickens, she ...
account for more than 60% of Vanuatu's total exports by value and agriculture accounts for 20% of Gross domestic product, GDP. Vanuatu produced in 2018: * 374 thousand tons of
coconut
coconut
; * 53 thousand tons of root and tubers; * 16 thousand tons of banana; * 13 thousand tons of vegetable; In addition to smaller productions of other agricultural products, like peanut (2.6 thousand tons) and cocoa (1.8 thousand tons).


Tourism sector

Tourism is Vanuatu's fastest-growing sector, having comprised 40% of GDP in 2000. Industry's portion of GDP declined from 15% to 10% between 1990 and 2008. Government consumption accounted for about 27% of GDP. 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, the economy was expected to grow by 3.9%, increasing to 4.3% in 2007.


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.


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. The program was derailed when Barak Sope became Prime Minister. Under Prime Minister Edward Natapei, reform programs were reintroduced.


Traditional economy

The government declared 2007 to be "the Year of the Traditional Economy" ( bi, 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. The establishment of the Tangbunia Bank, to deal in customary wealth, was linked to this initiative.


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. All "$" units are US Dollar. GDP: purchasing power parity - $1.237 billion (2012 est.) GDP - real growth rate: 2.6% (2012 Approximation, estimate) GDP - per capita: purchasing power parity - $ (2012 est.) GDP - composition by sector:
''agriculture:'' 20.6%
''industry:'' 11.7%
''services:'' 67.6% (2012 est.) Population below poverty line: NA% Household income or consumption by percentage share:
''lowest 10%:'' NA%
''highest 10%:'' NA% Inflation rate (consumer prices): 2.8% (2012 est.) Labor force: (2007) Labor force - by occupation: agriculture 58%, Industrial sector, industry 10%, Tertiary sector of economic activity, services 32% (2010 est.) Unemployment rate: 1.5% (2010) Ease of Doing Business Rank: 60th Budget:
''revenues:'' $188.2 million
''expenditures:'' $207.4 million, including capital expenditures of $700 000 (2012 est.) Industries: food and fish freezing, wood processing, meat canning Industrial production growth rate: 12% (2011 est.) Electricity - production: 52 GWh (2008) Electricity - production by source:
''fossil fuel:'' 90%
''hydro:'' 0%
''nuclear:'' 0%
''other:'' 10% (2012) Electricity - consumption: 40.22 GWh (2008) Electricity - exports: 220 kWh (2008) Electricity - imports: 0 kWh (2008) Agriculture - products: copra,
coconut
coconut
s, cocoa, coffee, kava, taro, yam (vegetable), yams,
coconut
coconut
s, fruits, vegetables, fish,
beef Beef is the culinary name for meat Meat is animal flesh that is eaten as food. Humans have hunted and killed animals for meat since prehistoric times. The advent of civilization allowed the domestication of animals such as chickens, she ...
Exports: $280 million (f.o.b., 2012 est.) Exports - commodities: copra,
beef Beef is the culinary name for meat Meat is animal flesh that is eaten as food. Humans have hunted and killed animals for meat since prehistoric times. The advent of civilization allowed the domestication of animals such as chickens, she ...
, cocoa,
timber Lumber, also known as timber, is a type of wood Wood is a porous and fibrous structural tissue found in the Plant stem, stems and roots of trees and other woody plants. It is an organic materiala natural composite material, composite o ...

timber
, kava, coffee Exports - partners: Thailand 57.3%, Japan 21.8% (2011) Imports: $242 million (f.o.b., 2012) Imports - commodities: machinery and equipment, foodstuffs, fuels Imports - partners: China 26.7%, Singapore 21.2%, Australia 13.6%, New Zealand 7.2%, Fiji 6.7%, Japan 5.4% (2011) Debt - external: $307.7 million (2011) Economic aid - recipient: $27.5 million (2002) Currency: 1 vatu (VT) = 100 centimes Exchange rates: vatu (VT) per US$1 – 94.03 (2012), 96.91 (2010), 111.79 (2004), 122.19 (2003), 139.2 (2002), 145.31 (2001), 129.76 (December 1999), 129.08 (1999), 127.52 (1998), 115.87 (1997), 111.72 (1996), 112.11 (1995) Fiscal year: calendar year


See also

*Fishing in Vanuatu


References

{{DEFAULTSORT:Economy Of Vanuatu Economy of Vanuatu,