Vanuatu as a nearby country can benefit from Fiji growing economy which is an opportunity for Vanuatu to strengthen through its bilateral cooperation with Fiji. The spill over effect on its tourism, trade, labour mobility and investment will continue to impact Vanuatu’s economy.

Fiji trade between Vanuatu has seen tremendous increase since 2005 through the MSG trade agreement. However, Vanuatu exports to Fiji is very small which requires private sector and the government engagement in pursuing this opportunity. The merchandise trade between the two countries will see more imports from Fiji however this does not undermine Vanuatu’s potential on its comparative advantage on its niche market. There are few products such as beef, kava, coffee, coconut oil and nuts that is highly favourable for Fiji high end market that is yet to explore.

Investment opportunity in Fiji is a potential for Vanuatu and would require the mission and the Vanuatu investment promotion authority (VIPA) to profile potential niche sectors and its investment destination. One of the investment destiny that could be a target would be the second town of Vanuatu. The island has huge potential to expand on its developments because of its low cost of production, vast land mass and growing population. Fiji investment at the local market is growing its multi-business companies which may expand into the region as the business grows its brand and grow its production and services into the region including Vanuatu. Fiji investment in Vanuatu from 2010 – 2017 had established twenty-three (23) projects engaging in various business from distribution (Wholesale & Retail business) to Manufacturing and processing industries.

Tourism is an opportunity Vanuatu could also take advantage in terms of outbound operator business investing in Fiji connecting long haul tourists to Vanuatu, considering Fiji as its tourist destination while visiting Vanuatu on a short stay. The long haul tourism is a potential niche market for Vanuatu which could be explored further, already Vanuatu daily flights is an advantage connecting Fiji Airways long haul flights from Europe, Americas and Asia.

Labour mobility and movement of skilled ni-Vanuatu professionals, tradesmen and customer services employment is increasing in Fiji labour market. This is an advantage for Vanuatu not only to increase its consular services and revenue collection but also promoting such specific sectors of interest that the Fiji government is offering to Vanuatu complementing the Melanesian Spearhead Group skill movement scheme.

Vanuatu has the opportunity and advantage being a close neighbour and market and had seen tangible benefits on trade, tourism, investment and labour mobility as a result of Fiji development amplification that has ripple effect on Vanuatu’s economic development. A constructive approach in pursuing this opportunity that is yet to explore is an advantage for Vanuatu.

Vanuatu is situated in the South Pacific Ocean and is made up of 83 islands stretching over 1,300 kilometres. Port Vila is the capital town and is the economic centre to most of its population offering employment opportunities, education and health services. The Population is over 280,000 people and over 75% of its population lives in rural areas in the outskirts of urban centres and to the remote islands. There are six provinces (Tafea, Shefa, Malampa, Penama, Sanma and Torba) and three municipalities (Port Vila, Luganville and Lenakel). The country continues to depend on subsistence farming. The economic sectors are relatively small and depends on small scale industrial sector, services sector and agriculture sector. The economy is based on agriculture, fishing, tourism, construction and offshore financial services.

Vanuatu’s economy report shows gradual improvement especially in the period of 2016-2017 respectively after the devastating cyclone Pam in 2015 as it picks up. Despite the decrease recorded by national account of a lower growth of 1.6%, most of the improvement is contributed and supported by the current infrastructure developments, agriculture and tourism pickup. The merchandise trade of goods and services continues to remain a deficit as imports outweighs the exports, but the economy continues to expand showing positive growth and has grown by 3.5% since 2016 reflecting a strong performance for the last six years.

However, most export commodities price remain high especially for copra and coconut oil and other commodities such as beef, kava, cocoa and other primary products with mixed performances. On the other hand, trade in services continues to increase t driving the growth in 2017. Services trade includes tourism, telecommunication, education, health, distribution, transportation, construction, finance, Professional businesses, Sports & Recreation and environment services contributing to the overall economy of Vanuatu.

In stimulating the economy, the Vanuatu government launched its fifteen-year National Sustainable Development Plan in 2016 which includes the economy pillar, emphasising on better formulation of economic and productive sectors policies in order to grow and increase Vanuatu’s economic activities, contributing to employment creation and growth. The Sectors policies in particular contributing to achieving this pillar are; Trade Policy Framework focuses on increasing trade and aid for trade, Industry Policy targeting value addition of primary products, Tourism Strategic plan towards developing and improving tourism products and standards, Productive overarching sector policy on agriculture, fisheries, forestry and livestock to support increase and sustainability of food security.

For further information on Vanuatu’s economic performance, you can see the Vanuatu Statistics website on vnso.gov.vu or the Reserve Bank of Vanuatu website on www.rbv.gov.vu.

The tourism industry is increasing rapidly in Vanuatu which includes tourist arrivals and cruise tourist. The tourism sector in Vanuatu is contributing and driving the economy in terms of employment creation, trade and investment. Vanuatu Travel and tourism is significant to its economic activity because of its direct and indirect economic impact on the economy and the lives of the people.

An impact report on the tourism impact research reported in 2017 on travel and tourism shows Vanuatu tourism GDP contributes 17.2% to its economy, which primary reflects the economic activities generated by industries such as hotels, travel agents, airlines, restaurants, leisure industries and other passenger transportation services supported by tourists' industry. The report stated that travel and tourism had created 10,000 jobs in 2016 which is about 13.6% of total employment in Vanuatu which is anticipated to increase base on the current tourism investment and developments in Vanuatu.

The High Commission in Fiji continues to support the tourism industry and especially in the region particularly Fiji has seen increasing number of travellers and flights between both countries. Vanuatu would also see an opportunity emanating from the current Fiji government reform on taxation policy and infrastructure development encouraging transiting passengers traveling to other Pacific island countries through Fiji without paying departure tax of FJD$200 especially for long-haul passenger staying for less than seventy-two (72) hours. This could be seen as an advantage for the Pacific island countries including Vanuatu as the region not missing out from this niche market.

For travellers' information you can visit our immigration information page regarding travelling information and tourist visa. And tourist activities and leisure you can visit our Vanuatu Tourism Office website on www.vanuatu.travel.

For further information on Vanuatu government tourism Products, investment, standards and developments, you can visit the Department of Tourism website on tourism.gov.vu.

Fiji is a strategic location for Vanuatu trade in goods and services as a close market for its goods and services trade which makes an advantage for Vanuatu. Both countries are seen as being in the centre of trading connecting the big economies in the Pacific region including Australia and New Zealand to the world in communication and transportation (by air and sea) routes. Despite the imbalance of merchandise trade between both countries which seen Fiji as the third country of Vanuatu merchandise imports lest Vanuatu seen its advantage on the niche market.

International trade in both goods and services plays a major role in Vanuatu’s economic trade and development. Vanuatu’s international trade (exports & imports) contributes significantly to the country’s GDP, demonstrating Vanuatu’s continuous dependency on trade for economic growth and development. With that in mind Vanuatu trade policy and trade related policies advocates on Vanuatu comparative advantages on its goods and services in order to increase trade using existing trade frameworks in the region taking advantage to increase its trade.

Vanuatu is a member to the World Trade Organisation (WTO) in 2012 and is obliged to its international trade rules and principles. The international trade rules encourage regional integration implementing reciprocal trade preferential rules that are of advantage to its partners within the same region. The regional economic integration policy is manifested in the region that have seen Vanuatu becoming a member to the Pacific Island Countries Trade Agreement (PICTA) including Trade in Services, the recent Pacific Agreement on Closer Economic Relation Plus (PACER+) trade agreement signed in 2017 and the revised Melanesian Spearhead Group trade agreement (MSGTA).

These Preferential trade arrangement policies have been negotiated by governments in the region to reduce or remove tariffs or duties on goods traded across each country with the view to expanding trade and market in the region. Vanuatu comparative advantage on its merchandise trade related products, services, investment and labour movement is based on its niche market taking advantage utilising the trade arrangements.

The mission stance to pursue this interest and linking opportunities to private sectors through its connection and collaboration effort in achieving the government sustainable development goals. The mission is aim at pursuing the development cooperation on trade signed between Vanuatu and Fiji focusing on specific sectors of trade and development into the future.

For further information regarding the regional trade agreements, you can access or download a copy of the agreement here

• Melanesian Spearhead Group Trade Agreement
• Pacific Island Countries Trade Agreement (PICTA)
• PICTA Trade in Services Agreement
• Pacific Agreement on Closer Economy Relation (PACER) Plus

Other trade and trade related information can be downloaded on these websites:

• www.msgsec.info
• www.forumsec.org
• www.wto.org