Vanuatu: Asian Development Bank Member Fact Sheet 2017

Abstract

Vanuatu’s economy is stabilizing after the devastation of Tropical Cyclone Pam—a Category 5 cyclone that struck in March 2015—and political instability that resulted in a change of government in early 2016. Economic growth in Vanuatu is being driven by a construction boom due to disaster reconstruction and major new infrastructure projects. Tourism—which has recovered strongly and continues to have significant growth potential—and aid inflows also contribute to the country’s economic progress. However, key constraints to implementing development assistance persist. These include Vanuatu’s remoteness, small market size, underdeveloped institutions, and limited absorptive capacity. The rural economy is primarily agrarian and operates at a subsistence level, aside from some copra, beef, cocoa, and kava produced for export. In 1980, Vanuatu gained independence from France and the United Kingdom after 76 years of joint administration, and the Asian Development Bank (ADB) began supporting Vanuatu in 1981. ADB has since committed loans and grants totaling $177.99 million, and technical assistance projects worth $23.05 million.