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The traditional livelihoods of fishing and agriculture have been overshadowed in recent years by revenues from tourism and offshore banking. For example, until the 1980s copra was still the most important export product, accounting for 70% of total export revenues. By 1993, this had dropped to 37% and now, in 2017, it accounts for only 1% of revenues.

Agriculture, livestock, forestry and fisheries

The main sector of the economy has traditionally been agriculture, both the export-oriented plantations, mainly owned by the French and British, where coconuts, yams, fruits and vegetables are grown. This sector also certainly includes small businesses aimed at self-sufficiency.

About two thirds of the total working population is in one way or another involved in the agricultural sector. Vanuatu generally has very fertile land, 40% of which could be used for agriculture. Currently, only about half of the land is used for this purpose, most of it for subsistence.

Kopra is the dried flesh of the coconut, half of which is produced on large plantations on Santo and Malekula. The main foreign customers are the Netherlands, Belgium and France, which use the copra in soap, margarine and industrial products. There are about 100 to 160 coconut palms on one hectare, from which 50 to 80 coconuts are harvested every year. The cyclones and the strongly fluctuating prices on the world market are threats for the copra production.

Of increasing importance is livestock farming. Meat is currently Vanuatu's second export product. The national herd numbers more than 150,000 animals, of which more than half are found on Santo. The cattle often graze in the coconut plantations between the trees. Most of the meat is exported to Japan and 20% of the annual production is canned.

Increasingly important for the economy is also the production of kava, the national liquor, which is also drunk throughout the Pacific. Kava is mainly produced on the islands of Pentecost, Epi and Tanna. In fact, many households in northern Pentecost no longer grow their own fruit and vegetables, but buy them from the kava revenues. Kava is also called "aelan bia" (island beer) in Bislama and is made from the roots of a shrub (40 species), the Piper methysticum. Kava is also used as a medicine. It is not yet scientifically clear what the effects of lifelong use of Kava are.

Although 35% of the country is covered with rainforest, forestry is of little economic importance. This is partly due to the hilly terrain, the lack of commercially interesting types of wood and the relatively small trees. On a few islands, forestry is carried out on a commercial basis, mainly for the wood industry. About half of the total production comes from international companies. The rest is produced by an increasing number of small local companies.

In 1994, the government made a decision to completely suspend logging in order to protect the environment. Australia also supports this measure financially by encouraging environmentally responsible forestry.

The sea fishery for mainly tuna, in which there is a lot of employment, is mainly in Japanese hands. The local fishing industry is growing steadily and brings in substantial export income. Deep-sea fish is canned for the Asian market. The most important ports are Vila and Santo. The national airline is Air Vanuatu.

Mining, industry and trade

Manganese ore mining accounts for 60,000 tonnes annually. Other ore resources are too small to be exploited profitably. The industrial activities are of little importance and mainly concern the processing of agricultural products. There are meat and fish canneries. Small handicraft companies make baskets, boats and tableware.

Australia, New Zealand, France and Great Britain provide large-scale development aid. Instead of monetary aid, the emphasis is increasingly on support from experts in particular fields. The trade balance is chronically negative. Imports include rice, vehicles, petroleum, machinery, building materials, food and beverages, and clothing. Main import partners are China, Singapore, United States, Australia, New Zealand and Japan. Exports include copra, cocoa, canned meat and fish and wood. Main export partners are customers: Thailand Ivory Coast and Japan.

Tax Haven and financial centre

Vanuatu's third source of income, after agriculture and tourism, comes from its status as a financial centre and tax haven. Since 1971, foreign companies and individuals have enjoyed the tax benefits and other services provided by the banks in the capital Vila. There are already more than 2000 foreign companies registered in Vanuatu.

Furthermore, more than 500 foreign ships currently sail under the flag of Vanuatu.


O'Byrne, D. / Vanuatu
Lonely Planet

Stanley, D. / South Pacific Handbook

CIA - World Factbook

BBC - Country Profiles

Last updated May 2024
Copyright: Team The World of Info