Vanuatu

IRONICALLY, Father Walter Lini’s Van uatu, also a “Melanesian Growth Model”, is benefiting from the troubles in Fiji. The tourist industry began a long slide follow ing the revolt on Espiritu Santo led by Jimmy Stevens in 1980. But now tourism, an industry that fluctuates and turns with its host country’s fortunes, is beginning to

recover as many Australians opt for a safer tropical paradise.

Additional aircraft are being leased by the country’s airline to increase the num ber of visitors and, by the end of the year, it is expected that most hotels closed to re pair cyclone damage will be reopened.

When a severe cyclone struck in May, it caused 48 deaths and about $A35m worth of damage to agriculture and in frastructure. Aid donors quickly provided funds for a rehabilitation program esti mated at about s2om and, so far, 65 per cent of that money has been received from Australia, the UK and Japan.

The reconstruction of the damaged in frastructure may prove to have a hidden blessing as it could make a significant im provement to the country’s capital assets.

The potential for economic growth had been slipping before the cyclone struck.

Tourist numbers had been falling, dis couraged by the high exchange rate, the re duction in air services and the cost of flying to Vanuatu compared to similar destina

tions. Like its neighbours, Vanuatu was suffering from falling world prices for its copra, fish and beef.

However, the signing of agreements with both the US and the Soviets should net the country substantial foreign ex change earnings. Around 170,000 ni-Van uatu have almost 12,000 square km of land area, giving them one of the least densely populated countries. The country’s GNP is about sllsm, or $9OO per capita. It is es timated that only half the available arable land is used, so prospects for further growth are good.

Perhaps the most interesting of Vanu atu’s foreign exchange earning gambits is its International Finance Centre, a tax ha ven created by the British during condom inium rule in 1971. The finance centre has attracted a range of foreign banks and trust companies. The tax legislation is designed to make Vanuatu a pure tax haven in the mould of the Bahamas and Bermuda.

Vanuatu offers companies an environ ment free of foreign exchange control and a liberal set of company laws as well as a good range of financial and legal exper tise. Government revenue is raised from import and export duty. A 10 per cent tourist tax is charged on hotel and restau rants and a range of stamp duties and lic ence charges are levied on business.

The International Finance Centre now provides the Government with its third largest source of revenue and employs al most 300 ni-Vanuatu. The Government is also expected to garner about $300,000 in fees this year from the 70 ships on the country’s shipping register.