Vanuatu push for local input

VANUATU will be encouraging more short-term, cash producing projects in the future.

The country’s Finance Minister, Sethy Regenvanu, said 100 many past develop ment projects had not lived up to their expectations. The government was con cerned about the level of loan charges, which had more than doubled since 1988 to reach Vt 427 million (US$3.Bl mil lion). That figure does not include loans for education projects, Parliament, Tele com, the Development Bank, agricul tural extensions and the Santo port projects on which repayments were not yet due.

Regenvanu said the country had to encourage more local participation in the economy. The opening of the new Commercial Bank of Vanuatu this year would be a step in that direction. By bringing more into the cash economy, the Government could increase customs revenue without raising tariffs and also provide more social benefits. Revenue from customs duties and business licences totalled Vt42o million in 1990.

The minister said in Parliament he would be concentrating economic policy in foreign earnings within Vanuatu (especially from tourism), foreign earn ings from exports, and creation of jobs.

Government reserves stood at about VtGOO million between 1980 and 1985, but the collapse of tourism in 1986 and

three cyclones almost eliminated these.

Regenvanu said a balanced budget would continue to be a high priority. The Government would be seeking new income sources, improving existing rev enue collections, spending only when revenue was available, enforcing strong financial control and limiting new loans.

The country still faced the problems of an inadequate infrastructure, a very small industrial base, over-dependence on copra for rural cash income and a lack of skilled manpower.

But tourism had recovered and the Finance Centre was making an import ant economic contribution. Gross dom estic product was now growing at about five per cent a year, inflation was down from 16 per cent to about six per cent, commercial banks loans were up 23 per cent last year and domestic savings had grown by 10 per cent in each of the past tw : o years. Regenavanua added that the balance of payments had been in surplus for 1989 annd 1990, while the decision to base the vatu on a secret basket of currencies had hailed speculation in the currency and made it more stable.

The minister said the subsidies being given to the Vanuatu Commodity Mar keting Board V 1970 million last year could not be maintained. “Clearly the Government needs to give serious atten tion to this problem,” he said. □