despite substantial

Concerns remain despite substantial reform in Vanuatu

THE Asian Development Bank says although Vanuatu has made sub stantial achievements under the Comprehensive Reform Programme (CRP), some problems and concerns remain.

Amongst these was the new Foreign Investment Act that included schedules that were contrary to the letter and spirit of the CRP.

It says that by reserving a wide range of areas for the indigenous population, the act

will discourage foreign investors.

“A planned government review of the (schedules needs to be completed quickly,”

ADB says.

Weaknesses in law enforcement contin ued to impose high transaction costs on business and the community as a whole, it says, and reform of the public sector would need to be consolidated.

Approximately 87 per cent of the pro jected 1998 budget deficit was a one-off expenditure arising from compensation payments to public servants dismissed fol lowing the 1994 strike, the Vanuatu National fund payout, and payments relat ed to the CRP funded by the ADB, the Bank says.

Achievements under the CRP include reducing the number of ministries from 34 to nine and a seven per cent cut in civil ser

vice employment.

Value-added tax has also been intro duced with the simplification and reduc tion of import duties and business licence fees.

Vanuatu has also established a legisla tive framework for improved governance, and begun a process to prepare a public investment programme including aid financed projects.

Progress in financial reform has been made by the restructuring of the National Bank and the Development Bank and the amendment of the Vanuatu National Provident Fund Act. ■