Vanuatu_PDNA_Web

28 Tropical Cyclone Pam, March 2015
partners should confirm support to priority value chains where Vanuatu has a comparative
advantage—mainly those where local manufacturers have the possibility of adding value to
Vanuatu’s primary goods (e.g., agro-processing). In this respect, the EU could confirm its support of
€25 million toward rural development, including priority value chains already identified (coconut,
beef, and fruits and vegetables). Australia’s strategic refocus of development cooperation on aid for
trade could be followed by high-level bilateral discussions to identify and agree upon funding for
productive sectors that still lack significant support; cocoa, kava, and coffee value chains would be
ideal candidates.
Medium- to Long-term recovery needs for the commerce and industry sector
In terms of longer-term support directly linked to coping with risk from natural disasters, as explained
above, there is need for longer-term funding to support the development of an insurance market for
small businesses. Such an intervention will be based on the feasibility study proposed below.
Table 14. Mediumto
Long-Term
Activities and Needs
for Commerce and
Industry
Commerce and Industry
Program of Activity Value (VT 1,000) Responsible Agency
Support establishment of
microinsurance for small Not available
MTTCNVB/RBV
businesses
Note: The feasibility study would establish the initial need for support of the proposed market.
3.1.3 Tourism
Summary
Tourism is a significant contributor to Vanuatu’s GDP. Tourism expenditure as a percentage of GDP
increased from 26% in 2002 to 33% in 2010. 15 This translates to up to 4,000 direct jobs. 16 Moreover,
foreign exchange earnings generated by trade in tourism services represent the major contributor
to the surplus observed in the service accounts of the national balance of payment. This surplus
almost counterbalances the chronic deficit in the goods account, making the tourism sector key to
Vanuatu’s macroeconomic stability. 17
Tourism activities strongly contribute to the observed growth in GDP for the construction sector
as well as for the primary sector (for example livestock, fish, fruits and vegetables). 18 As a major
contributor to the country’s GDP, tourism activities provide significant revenues to the government
through VAT and import duties.
15
Data are from Reserve Bank of Vanuatu, 2012.
16
See the 2010 Millennium Challenge Account Survey, https://mcavanuatu.gov.vu/MCA%20CONTENTS/MCA%20
Environment%20and%20Social%20Assesment/MCA%20Vanuatu%20Tourism%20Survey%20Baseline%20
Study.pdf.
17
See figures of the balance of payment. There is a goods accounts and a surplus in services accounts. Most of
the surplus in services is due to tourism. See Vanuatu Government, “Trade Policy Framework,” 2012, 8, https://
gov.vu/DET001%20Trade%20Policy%20Framework%20-%20Englisha711.pdf?download=45%3Atrade-policyframework-english-vs.
18
Construction is largely driven by tourism, with major construction projects, such as the 80-room Ramada Hotel,
currently under way in Port Vila. Also, draft findings from an International Finance Corporation (IFC) agriculture study
show that locally sourced produce accounts for 38% of overall spend on hotels with restaurants (the rest is imported).