Vanuatu Roundup: Economic crisis, labour policy, tourism boom

Speaker in court over theft allegations

Vanuatu's Speaker of Parliament, Seoule Simeon, is set to appear in the Supreme Court on 19 November for a plea hearing concerning theft allegations linked to a government vehicle. The Magistrate Court has expressed satisfaction with the prosecution's investigation, thus committing the case onward to the Supreme Court. Simeon faces accusations of unlawfully diverting a government vehicle to Epi, an act deemed theft per the Penal Code. Notably, key witness Stanley John Fred has requested indemnity, suggesting he may provide vital testimony against Simeon, as reported by Post Courier. The allegations date back to the period between 2018 and 2020, and the outcome of the upcoming plea hearing is expected to significantly influence future legal proceedings in this matter.

Economic crisis

Vanuatu is grappling with a burgeoning economic crisis, as underscored by various recent analyses showing dramatic falls in essential economic metrics. Specifically, Value Added Tax (VAT) revenues have declined by 25% year-on-year, following the liquidation of Air Vanuatu. Additionally, government revenue recorded a shortfall of 23% from January to June, compounded by worries over diminishing funds from the Citizenship By Investment programme. According to The National, the World Bank’s forecasts indicate that the economy is approximately 3% smaller than it was in 2019, with per capita GDP plummeting to levels not seen in the last two decades. Looking ahead, projections remain bleak, with the International Monetary Fund (IMF) estimating only 2% annual economic growth until 2044, a rate insufficient to elevate living standards in light of population growth and imminent climate challenges.

Labour policy

In response to widespread issues faced by seasonal workers, including family disruptions, labour exploitation, and brain drain, the Vanuatu Government has unveiled its revised Labour Mobility Policy for 2024-2027. This policy is constructed upon five strategic pillars: 1. Legislative and Institutional Reform aimed at enhancing worker protection; 2. Improved data collection and coordination for insightful decision-making; 3. Strategies to support labour mobility management and facilitate returning workers' reintegration; 4. Child-centric social protection systems for families impacted by mobility; and 5. Enhanced worker welfare and benefits. As reported by Post Courier, Deputy Prime Minister Matai Seremaiah has stressed the necessity of building an environment conducive for returning workers to invest their skills locally, signifying the relevance of a Reintegration Strategy to foster sustainable economic growth.

Tourism boom

Vanuatu, an idyllic archipelago in the South Pacific, is undergoing a boom in its travel sector, spurred by a visa-free policy allowing entry for travellers from 117 nations, including significant markets like Australia, China, the UAE, the UK, and the US. This initiative simplifies access to the nation’s magnificent natural landscapes and rich cultural heritage. In 2022, Vanuatu welcomed nearly 39,000 visitors, contributing over $105 million to its tourism revenue. The country’s economy is heavily predicated on tourism, in addition to agriculture, fishing, and offshore financial services, Travel and Tour World reports. With crucial airports such as Bauerfield International and Santo International, Vanuatu maintains robust connections to regional destinations. Tourist attractions are plentiful, including the stunning Nanda Blue Hole, Champagne Beach, and the active Mount Yasur volcano.

2031 pacific games

In a stark warning, Antoine Boudier, President of Vanuatu's National Olympic Committee and Chair of the Vanuatu Chamber of Commerce, cautioned that the prospect of hosting the 2031 Pacific Games could lead Vanuatu into financial distress. He has advised the government to retract its bid in light of the nation’s precarious economic situation. Government officials took a month to deliberate on his strong caution, but ultimately, Boudier announced the withdrawal from the bid on the day of the vote in Palau, reports ABC.