Vanuatu - Services

The services sector is the largest broad economic sector in the Vanuatu economy, contributing 60.4 percent of GDP in 1999. The makeup of this sector is suggested by data from 1995, which showed that the most important service subsectors, in order, were wholesale and retail trade, government services, transport, storage and communication, finance and insurance, real estate, and hotels and restaurants. Although the last of these subsectors is mostly generated by tourism, a considerable amount of the income generated in other subsectors also relates to tourism. Specific amounts were not available.

The sector that is often thought to have the greater future potential in the Pacific is tourism, and it has been heavily promoted in Vanuatu in recent years. Visitor arrivals have doubled in the 2 decades since independence in 1980, rising from about 25,000 per year at that time to about 50,000 in the late 1990s. Tourism in Vanuatu is still a small industry compared to Fiji, but larger than neighboring Solomon Islands. The majority of tourists (about 60 percent) come from Australia, with smaller numbers from New Zealand and New Caledonia. So far, relatively few have come from the largest potential markets of Japan, North America, and Europe.

Tourism is largely focussed on the capital, Port Vila, on the island of Efate. There are several international standard hotels in Port Vila, but in the rest of the country tourist facilities are rare, despite the great potential of some islands. With over 100 indigenous cultural groups, one of the main attractions of Vanuatu is its cultural diversity, represented in different housing styles, dances, and art-forms, especially carvings. There are also the typical Pacific attractions of beaches, diving and a tropical climate.

The national airline Air Vanuatu links Port Vila to Noumea, Brisbane, Sydney, Auckland, Nadi and Honiara, and other airlines serve the capital as well, including Air Pacific, Aircalin (New Caledonia) and Solomon Airlines.

Vanuatu is one of several tax havens in the South Pacific. The Offshore Financial Centre (OFC) was established in 1971 and has been maintained since independence. This provides a tax haven for offshore banks, trust companies, insurance companies, and shipping companies. It has been estimated that the OFC employs about 400 people. OFC pays registration fees to the government, which contribute about 2.5 percent of the overall gross domestic product, according to Ambrose and Siwatibau. Local banking services are provided by the National Bank of Vanuatu, ANZ (Australia New Zealand) Bank, Bank of Hawaii, and Westpac.

Like many Pacific countries, retail services are somewhat limited. In Port Vila there are medium-sized shops and supermarkets, but in most of the country there are only small shops with a very limited range of goods.

Also read article about Vanuatu from Wikipedia

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