Vanuatu (10/08)

For the most current version of this Note, see Background Notes A-Z.


Republic of Vanuatu

Area: Land--11,830 sq. km. (4,568 sq. miles) archipelago of 83 islands. Comparative area--about the size of Connecticut.
Cities: Capital--Port Vila (on the island of Efate), pop. 33,700. Other towns--Luganville (on the island of Espiritu Santo, also known as Santo).
Terrain: Mostly mountains of volcanic origin, narrow coastal plains.
Climate: Tropical or subtropical.

Nationality: Noun and adjective--ni-Vanuatu.
Population (2007 est.): 218,000.
Annual growth rate (2007 est.): 2.0%.
Ethnic groups: 94% ni-Vanuatu; 4% European; 2% other Pacific Islanders, Asian.
Religion: Predominantly Christian (84%).
Languages: Bislama (Pidgin), English (official), French (official), over 100 tribal languages.
Education: Enrollment in primary is 100% with rapid fall-off to 20% in secondary and upper secondary. Adult literacy rate (2007)--74% of those age 15 and older.
Health: Infant mortality rate (2007)--53/1,000. Life expectancy (2007)--63 yrs.
Work force (1999): 134,000. Agriculture--65%. Industry--5%. Service--30%.

Type: Parliamentary democracy.
Independence (from France and U.K.): July 30, 1980.
Constitution: July 30, 1980.
Branches: Executive--president (head of state), prime minister (head of government). Legislative--unicameral (52-member parliament). Judicial--Supreme Court.
Administrative subdivisions: 6 administrative districts.
Political parties: Melanesian Progressive Party (MPP); Union of Moderate Parties (UMP); National United Party (NUP); Vanua'aku Party (VP); Vanuatu Republican Party (VRP); the Confederation of Greens (CG); John Frum group; People's Progressive Party (PPP); National Community Association (NCA).
Suffrage: Universal over 18.
Independence Day: July 30.

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.

Vanuatu is a 'Y' shaped archipelago of 83 islands. It is located about 1,750 kilometers east of Australia. Fiji lies to the east, New Caledonia to the south, and the Solomon Islands to the northwest, all within the area of the South Pacific called Melanesia.

The two largest islands, Espiritu Santo (or Santo) and Malakula, account for nearly one-half of the total land area. They are volcanic, with sharp mountain peaks, plateaus, and lowlands. The larger islands of the remaining half also are volcanic but are overlaid with limestone formations; the smaller ones are coral and limestone. Volcanic activity is common with an ever-present danger of a major eruption, the last of which occurred in 1945. Rainfall averages about 2,360 millimeters (94 in.) per year but can be as high as 4,000 millimeters (160 in.) in the northern islands.

The population of Vanuatu is 94% indigenous Melanesian. About 33,700 live in the capital, Port Vila. Another 10,700 live in Luganville (or Santo Town) on Espiritu Santo. The remainder live in rural areas. Approximately 2,000 ni-Vanuatu live and work in New Caledonia. Although local pidgin, called Bislama, is the national language, English and French also are official languages. Indigenous Melanesians speak 105 local languages.

Christianity has had a profound influence on ni-Vanuatu society, and an estimated 90% of the population is affiliated with one of the Christian denominations. The largest denominations are Presbyterian, Roman Catholic, and Anglican. John Frum, a syncretic sect, also is important on Tanna Island.

The prehistory of Vanuatu is obscure; archaeological evidence supports the commonly held theory that peoples speaking Austronesian languages first came to the islands some 4,000 years ago. Pottery fragments have been found dating back to 1300-1100 B.C.

The first island in the Vanuatu group discovered by Europeans was Espiritu Santo, when in 1606 the Portuguese explorer, Pedro Fernandez De Quiros, spied what he thought was a southern continent. Europeans did not return until 1768, when Louis Antoine de Bougainville rediscovered the islands. In 1774, Captain Cook named the islands the New Hebrides, a name that lasted until independence.

In 1825, trader Peter Dillon's discovery of sandalwood on the island of Erromango began a rush that ended in 1830 after a clash between immigrant Polynesian workers and indigenous Melanesians. During the 1860s, planters in Australia, Fiji, New Caledonia, and the Samoa Islands, in need of laborers, encouraged a long-term indentured labor trade called "blackbirding." At the height of the labor trade, more than one-half the adult male population of several of the Islands worked abroad. Fragmentary evidence indicates that the current population of Vanuatu is greatly reduced compared to pre-contact times.

It was at this time that missionaries, both Catholic and Protestant, arrived on the islands. Settlers also came, looking for land on which to establish cotton plantations. When international cotton prices collapsed, they switched to coffee, cocoa, bananas, and, most successfully, coconuts. Initially, British subjects from Australia made up the majority, but the establishment of the Caledonian Company of the New Hebrides in 1882 soon tipped the balance in favor of French subjects. By the turn of the century, the French outnumbered the British two to one.

The jumbling of French and British interests in the islands brought petitions for one or another of the two powers to annex the territory. In 1906, however, France and the United Kingdom agreed to administer the islands jointly. Called the British-French Condominium, it was a unique form of government, with separate governmental systems that came together only in a joint court. Melanesians were barred from acquiring the citizenship of either power.

Challenges to this form of government began in the early 1940s. The arrival of Americans during World War II, with their informal demeanor and relative wealth, was instrumental in the rise of nationalism in the islands. The belief in a mythical messianic figure named John Frum was the basis for an indigenous cargo cult (a movement attempting to obtain industrial goods through magic) promising Melanesian deliverance. Today, John Frum is both a religion and a political party with a member in Parliament.

The first political party was established in the early 1970s and originally was called the New Hebrides National Party. One of the founders was Father Walter Lini, who later became Prime Minister. Renamed the Vanua'aku Pati in 1974, the party pushed for independence; in 1980, the Republic of Vanuatu was created.

The constitution created a republican political system headed by a president who has primarily ceremonial powers and is elected by a two-thirds majority in an electoral college consisting of members of Parliament and the presidents of Regional Councils. The president serves a 5-year term. The president may be removed by the Electoral College for gross misconduct or incapacity. The prime minister, who is the head of government, is elected by a majority vote of a three-fourths quorum of the Parliament. The prime minister in turn appoints the Council of Ministers, whose number may not exceed one-fourth of the number of parliamentary representatives. The prime minister and the Council of Ministers constitute the executive government.

Parliament is a 52-member unicameral house elected by all persons over 18 years old. Parliament normally sits for a 4-year term unless dissolved by majority vote of a three-fourths quorum or a directive from the president on the advice of the prime minister. The national Council of Chiefs, called the Malvatu Mauri and elected by district councils of chiefs, advises the government on all matters concerning ni-Vanuatu culture and language.

The Supreme Court consists of a chief justice and up to three other judges. Two or more members of this court may constitute a Court of Appeal. Magistrate courts handle most routine legal matters. The legal system is based on British law. The constitution also provides for the establishment of village or island courts presided over by chiefs to deal with questions of customary law.

Principal Government Officials
President--Kalkot Matas Kelekele
Prime Minister--Edward Natapei
Foreign Minister--Pakoa Kaltonga

Vanuatu does not have an embassy in Washington. Its mission to the United Nations is located at 800 East Second Avenue, Room 400B, New York, NY 10017. Vanuatu Maritime Services, which provides information on ship registration in Vanuatu, is located at 120 Broadway, Suite 1743, New York, NY 10271.

Government and society in Vanuatu tend to divide along linguistic--French and English--lines. Historically, English-speaking politicians such as Walter Lini and other leaders of the Vanua'aku Pati favored early independence, whereas French-speaking political leaders favored continuing association with the colonial administrators, particularly France.

On the eve of independence in 1980, Jimmy Stevens' Nagriamel movement, in alliance with private French interests and backed by American libertarians hoping to establish a tax-free haven, declared the island of Espiritu Santo independent of the new government. Following independence, Vanuatu requested assistance from Papua New Guinea, whose forces restored order on Santo. From then until 1991, the Vanua'aku Pati and its predominantly English-speaking leadership controlled the Vanuatu Government, and Walter Lini became widely considered as the nation's founding father.

In December 1991, and following a split in the Vanua'aku Pati, Maxime Carlot Korman, leader of the Francophone Union of Moderate Parties (UMP), was elected Vanuatu's first Francophone prime minister. He formed a coalition government with Walter Lini's breakaway VP faction, now named the National United Party (NUP). From 1995-2004 government leadership changed frequently due to unstable coalitions within the Parliament and within the major parties.

The president dissolved Parliament in May 2004 to forestall a vote of no confidence and called a special election that resulted in losses for most major parties. UMP's leader, Serge Vohor, returned as Prime Minister at the head of an unwieldy coalition government. Following controversy over Vohor's attempt to extend diplomatic relations to Taiwan, he was ousted by a vote of no confidence in December 2004 and replaced by Ham Lini, brother of Walter Lini. The new coalition included ten parties and featured the former opposition leader, Sato Kilman, as Deputy Prime Minister/Foreign Minister.

Elections were held on September 2, 2008, and a seven-party coalition elected Edward Natapei as Prime Minister with the former Prime Minister, Ham Lini, as Deputy Prime Minister.

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's 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.

Vanuatu maintains relations with more than 65 countries, including Russia, the People's Republic of China, Cuba, and Vietnam. However, only Australia, France, New Zealand, and the People's Republic of China maintain embassies, high commissions, or missions in Port Vila.

The government's main concern has been to bolster the economy. In keeping with its need for financial assistance, Vanuatu has joined the Asian Development Bank, the World Bank, the International Monetary Fund, and the Agence de Cooperation Culturelle et Technique.

The government encourages private enterprise, foreign investment, and producer cooperatives. Like other developing countries, Vanuatu is particularly interested in enterprises that add value to local primary products and that provide employment. In less lucrative sectors, the government sets up its own production companies or enters joint ventures with foreign investors.

Since 1980, Australia, the United Kingdom, France, and New Zealand have provided the bulk of Vanuatu's development aid. A number of other countries, including Japan, Canada, Germany, and various multilateral organizations, such as the Economic and Social Council for Asia and the Pacific, the UN Development Program, the Asian Development Bank, the European Economic Community, and the Commonwealth Development Corporation also provide developmental aid. The United States, Canada, Australia, New Zealand, the United Kingdom, and Japan also send volunteers. In March 2006 the United States Millennium Challenge Corporation signed a five-year $65.69 million Compact agreement with Vanuatu. Vanuatu retains strong economic and cultural ties to Australia, New Zealand, and France.

Membership in International Organizations
Vanuatu is a member of the United Nations and its specialized and related agencies, including the World Bank and the International Monetary Fund; Secretariat of the Pacific Community (SPC); Pacific Islands Forum (PIF); Non-Aligned Movement; Commonwealth, Group of 77; and Asian Development Bank (ADB).

The United States and Vanuatu established diplomatic relations in 1986. Between 1977 and 1987, Vanuatu received just under $3 million from the U.S. Agency for International Development (USAID), including projects focusing on assisting the transition to indigenous plantation management. In June 1994, the regional USAID office located in Suva, Fiji, was closed due to U.S. Government budgetary cutbacks. The U.S. military retains training links and conducts ad hoc assistance projects in Vanuatu.

In March 2006 the United States Millennium Challenge Corporation signed a five-year $65.69 million Compact agreement with Vanuatu. The Millennium Challenge Program is expected to increase average income per capita by 15% within five years and directly impact the lives of more than 65,000 of the rural poor in Vanuatu.

Vanuatu identified costly and unreliable transportation infrastructure as a major impediment to economic growth. To overcome this constraint, the Compact consists of up to eleven infrastructure projects--including roads, wharfs, an airstrip and warehouses--that will help poor, rural agricultural producers and providers of tourist related goods and services reduce transportation costs and improve access to transportation services. The Compact also includes institutional strengthening efforts and policy reform initiatives in Vanuatu's Public Works Department, including: provision of plant and equipment for maintenance; introduction of service performance contracts; establishment of local community maintenance schemes; and introduction of user fees.

The United States also remains a major financial contributor to international and regional organizations that assist Vanuatu, including the World Bank, UNICEF, WHO, the UN Fund for Population Activities, and the Asian Development Bank.

In 1989, the United States concluded a Peace Corps agreement with Vanuatu. The Peace Corps has met with a warm welcome there and currently has over 80 volunteers in-country. The United States also provides security training assistance.

Principal U.S. Embassy Officials
Ambassador--Leslie Rowe (resident in Port Moresby, Papua New Guinea) 
Deputy Chief of Mission--Bruce Kleiner
Peace Corps Country Director--Edwin Stice
Millennium Challenge Country Director--Chuck Sethness

The mailing address of the U.S. Embassy in Papua New Guinea is P.O. Box 1492, Port Moresby (tel: 675-321-1455; fax: 675-321-3423). The Embassy maintains a web site dedicated to relations with Vanuatu at