Vanuatu - Economy
Vanuatu has a mixed traditional and modern economy. Agriculture supports about 65% of the population, but the service industry is playing an increasingly important role in the economy. Tourism has been developed since the 1980s and, together with financial services, has become an important foreign exchange earner. GDP grew by less than 3% a year in the 1990s. For the three years 2000 to 2002, GDP growth averaged 3% and inflation averaged 3%. During this period the islands had to deal with the extensive damage from two severe earthquakes, each followed by sizeable tsunamis: in November, 1999 on the northern island of Pentecote, and in January 2002, centered on the capital and surrounding areas. The absence of personal and corporate income taxes have made Vanuatu an offshore financial center, and the government also earns fees from a "flag of convenience" shipping registry.