Vanuatu is in a slightly more mixed position. Revenues are actually fairly solid, thanks to our passport revenues. We had a VT 7 billion surplus last year (almost US $70 million), due in part to the fact that we couldn’t ramp up stimulus spending fast enough.
DIY has real limits when the ‘Y’ is as small and under-resourced as we are.
The government has spent considerable time and effort to retool the local economy to increase opportunities for agriculture-related business. They’ve had decidedly mixed results, but that could be said about virtually every major policy endeavour in the last two decades.
But as any fitness expert will tell you, you can put on good weight, or bad weight. Right now, we’re living on chips and beer, so to speak. Our revenues are cheap, intoxicating and unhealthy. Worse, we’re relying on income streams that could dry up overnight.
Even after years of financial reforms, we still can’t shake our high-risk status. Our banks are losing correspondent accounts. We face sanctions due to our tax blacklisting by the EC. We are going to lose our visa-free access to the Schengen countries. The only question is when.
I expect that sooner rather than later, we’ll be rueing the day we opened up our passport scheme to everyone and their dog, passed out forex licenses like candy, and gave a pass to our best buddies when due diligence was required.
With the transition to a more agriculture-driven economy in its nascent stages, the loss of tourism revenue has left us down, if not out.