Vanuatu_PDNA_Web

2 Tropical Cyclone Pam, March 2015
1.1 Disaster Risk Profile of Vanuatu
Vanuatu is considered to be the world’s most vulnerable country to natural hazards. This is due
to a combination of Vanuatu’s exposure to both geophysical and hydrometeorological hazards,
and its limited financial and technical capacity to prepare for and respond to the associated risks.
Geographically, Vanuatu is located in the Pacific Ring of Fire and at the center of the Pacific cyclone
belt. This results in a relatively high frequency of volcanic eruptions, cyclones, earthquakes,
tsunamis, storm surges, coastal and river flooding, and landslides. In addition, the country suffers
from extreme events associated with climate variability, including sea-level and temperature
extremes and droughts (UNU-EHS 2014).
Consequently, Vanuatu is expected to incur, on average, US$48 million per year in losses due to
earthquakes and tropical cyclones. In the next 50 years, Vanuatu has a 50% chance of experiencing a
loss exceeding US$330 million, and a 10% chance of experiencing a loss exceeding US$540 million. 4
1.2 Socioeconomic Context of Vanuatu
Vanuatu is
expected to incur,
on average,
US$48 million per
year in losses due
to earthquakes
and tropical
cyclones.
Vanuatu is an archipelago of 83 volcanic islands (65 of them inhabited) covering a total area of
about 12,200km 2 , of which approximately a third is land. Vanuatu’s population of approximately
253,000 people is almost evenly distributed among the six administrative provinces: Malampa,
Penama, Sanma, Shefa, Tafea, and Torba. An estimated three-quarters of households engage in
primarily subsistence livelihoods in rural areas.
Vanuatu faces many of the geographic and structural challenges common to other countries in the
Pacific. Remoteness, in conjunction with small size and internal dispersion, imposes additional costs
of trade and transportation, and means that domestic markets tend to be too small for industries to
benefit from economies of scale. The same factors also push up the cost and complexity of providing
public services and fulfilling the basic functions of government.
Despite these challenges, Vanuatu has taken advantage of opportunities to support growth and
private sector development in recent years. It has become one of the faster-growing economies in
the Pacific region, with growth mainly driven by tourism, construction, and aid inflows. However,
Vanuatu remains vulnerable to external shocks (due in part to its narrow economic base) and natural
disasters. Moreover, the cost of basic infrastructure services remains relatively high, which adversely
affects the environment for doing business and reduces connectivity. While extreme hardship is
very rare in Vanuatu, the challenge of ensuring that the benefits of growth are distributed broadly
across the population is ongoing. Gross domestic product (GDP) per capita is estimated at around
US$3,300, which is below the average for Pacific Island countries.
Because of the high cost structure, low tax revenues, and limited space for additional borrowing,
Vanuatu has found it difficult to provide substantial funding for basic public services and infrastructure.
However, the government has recently embarked on a new infrastructure development program
financed with a mix of development grants and loans. The government’s focus on infrastructure
investments and better access to basic services should help relax some of the binding constraints to
economic growth, while also directly benefitting the population.
4
The calculation is based on modelling from PCRAFI (2011).