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Country profile - Vanuatu


Vanuatu is an archipelagic nation of 83 islands that stretch over 1300km of the South Pacific ocean from Torres island in the north to Aneityum in the far south. 68 of the 83 islands are inhabited. The total land mass is 12,189km2, of which the two largest islands, Espiritu Santo and Malekula, make up half. The archipelago sits on the western edge of the Pacific plate next to the 8,000m deep New Hebridean trench, and is steadily being pushed to the north west, 10cm a year, by the Indo-Australian plate. This movement is punctuated by regular earthquakes and volcanic eruptions. Vanuatu has three active volcanoes, one of which, Lopevi, erupted in June this year, deluging villages and food gardens on the eastern side of the neighbouring island with volcanic ash. As well as hazards from below ground Vanuatu is also the most hurricane-prone country in the South Pacific. On average, any locality can expect to be hit by hurricane-force winds every other year, usually between January and April.

Most people live in rural villages and more than 75% of the population is involved in agriculture, which continues to be the main source of revenue for households and the nation. However, tourism is becoming more important and the number of people leaving villages for life in town is also increasing rapidly: 22% of the population is now urban.

Heavily dependent on foreign aid - more than 60% of government expenditure is funded by donors - investment in public services in Vanuatu has been steadily shifting away from natural resource use to services such as education and health. At the instigation of donors, a Comprehensive Reform Programme was introduced in 1996 to reduce government expenditure and, as a result, State investment in agriculture and agriculture-related services was cut by 80%. The government extension and advisory service for farmers, which at its height employed more than 500 forestry and cash crop advisors throughout the islands, now has less than 50 staff. A phoenix may yet rise from the ashes: a Chinese project to build an agricultural college on the northern island of Santo, at a cost of $5million, was formally launched in April this year.

Copra and other crops for cash

Growing conditions in the shallow but rich volcanic soils are excellent. Traditionally, farmers practise shifting cultivation of vegetable gardens, growing yam, taro and sweet potato in cleared patches of forest. Now, with the growing population, pressure on land has increased and the fallow period is shortening. Disputes over land are increasingly common and the need to exploit natural resources sustainably has never been greater. Copra, dried coconut kernel, has been Vanuatu's most important export. In the 1980s, the government helped producers construct drying houses which could dry copra to the internationally required standard, and for a time it seemed that this paid off. However, in the early 1990s a dive in the world price of copra, followed by the collapse of the trading system meant that many farmers gave up copra drying altogether. Copra prices have risen slightly this year, but only to levels roughly comparable to those of 20 years ago.

Other cash crops have also had their day in Vanuatu. The Commonwealth Development Corporation invested heavily to set up large scale plantations of arabica coffee on Tanna island and cocoa on Malekula. Both these plantations are all but abandoned. With their demise the market for smallholder-grown beans also disappeared, although a new lease for cocoa production has just been agreed between the government and a local entrepreneur who hopes to begin production and export of organic Pacific cocoa in the wake of the drop in cocoa exports from West Africa.

Exploitation of Vanuatu's forests began in 1826 when an explorer-trader discovered highly-prized sandalwood on the island of Erromango. 150 years later a new type of exploitation began with the arrival of hardwood merchants from Malaysia and Indonesia who systematically logged out virtually all the accessible valuable timber in the country. The Vanuatu government had very limited success in adding value to the timber before it left as most of it was shipped out as raw logs. Subsequent initiatives to set up community-owned mobile sawmills have had better results in helping local people to profit from sustainable management of what forest is left on Santo island. Similar schemes are now being established on the southern, forested and relatively under-populated islands of Aneityum and Erromango.

Fish and pharmaceuticals

Fisherman in dugout canoe - Pele, Vanuatu (Susie Emmett)
Fisherman in dugout canoe - Pele, Vanuatu
Susie Emmett

Offshore, Vanuatu has riches beneath the waves, although once again foreign interests have been quick to exploit them. The Japanese fishing fleet had a base in the islands for canning of tuna and bonito fish. This year the southern Pacific Chinese fishing fleet has announced plans to develop two bases where their boats can dock to transfer their catches to mother ships. Meanwhile the local fish trade has struggled. A ten year multi-million euro programme of work backed by the European Union to develop artisanal fisheries by investing in boats, outboard engines and community cold storage facilities ended with few long-term achievements. A less ambitious scheme, whereby a privately-owned ice boat from the capital makes regular weekly calls at coastal villages to buy the day's catch and return to supply the market in the capital, is having more success.

Farming pharmaceuticals was, until recently, the great money-earning hope for many of the islands. Kava, Piper methysticum, is a shrubby plant from which a traditional, mildly narcotic drink is extracted. Vanuatu has the greatest diversity of kava in the Pacific and pharmaceutical analysis confirmed what many islanders had believed for generations, that kava has many medicinal properties. More than 40 active substances or kava-lactones were identified in the plant, and soon the export to European pharmacuetical companies of dried kava roots rose sharply. When the international herbal product companies began to market kava for its stress-relieving properties, demand soared and many islands enjoyed their best incomes ever; it seemed that Vanuatu had finally found a valuable export crop the world wanted. However the boom did not last. First, demand levelled allowing the price to fall and last year, with the announcement of a study in Germany which associated kava with liver damage, products containing kava were banned from sale in the United States and Europe. Kava exports from Vanuatu crashed. A recent study commissioned by the European Union Centre for the Development of Enterprise concludes there is no justification for the ban on the sale of kava products imposed by European countries. However, there is as yet no public sign that the study is leading to a change of attitude in European health agencies.

Vanuatu has great cultural, physical and agricultural diversity. With a fast-growing, urbanising population the country needs to find the means to make best use of its natural resources. But, remote from global markets, with a narrow economic base and vulnerable to natural disasters, Vanuatu still has a long way to go.

Statistical information
  • Country: Vanuatu
  • Capital: Port Vila
  • Land area: 12,190 sq km
  • Population: 202,000 (2001 est.)
  • Ethnic groups: ni-Vanuatu (98%)
  • Languages: Bislama, English, French and over 100 local languages
  • Population growth: 2.2% (2001 est.)
  • Urbanisation: 22%
  • GDP: US$229.7 million
  • GDP per capita: US$1095 (PPP - 2001 est.)
  • GDP composition by sector: agriculture 26%, industry 12%, services 62% (2000 est.)
  • Labour force by occupation: agriculture 65%, services 30%, industry 5% (2000 est.)
  • Land use: arable land 2.5%, permanent crops 7.5%, other 90%
  • Agricultural products: copra, beef, vegatables, fruit, kava, cocoa, taro, yams
  • Major industries: food and fish processing, wood processing, tourism
  • Natural resources: forests, inshore and offshore fisheries, limited silver and other minerals
  • Export commodities: copra, timber, beef, cocoa, kava, coffee
  • Major Export Partners: EU 33%, Japan 23%, US 12%, Other Asian 10% (1996 - 2000)

Date published: September 2003


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