Vanuatu Media Release

13 October 2009

Australia's Parliamentary Secretary for International Development Assistance Mr Bob McMullan (R) discusses the survey with Mr Ruben Markward Bakeo, Director of Agriculture, Vanuatu (C) and AusAID Chief Economist Dr Mark McGillivray (L) at the survey launch in Nuku'alofa on October 13 2009

Photo; AusAID

New report encourages Vanuatu to extend niche markets

A new economic report encourages Vanuatu to use its natural advantages to benefit from global trade opportunities in goods and services and to build economic resilience in the future.

The report, Pacific Economic Survey 2009, engaging with the world, examines ways Pacific island countries and Timor-Leste can broaden their economic bases to better withstand sudden shocks such as food and oil price rises and more recently the global recession.

The survey was prepared by the Australian Government's overseas aid agency, AusAID and specialists from the Pacific and Timor-Leste.

It says the external perception of Vanuatu as a tropical paradise gives it a marketing advantage especially with organically certified products, such as beef.

"Vanuatu has high-quality beef with exceptional flavour which is used in restaurants around the world," said AusAID Chief Economist, Mark McGillivray at the launch of the report in Tonga today.

"Organically certified products, especially when they are also processed in Vanuatu, have the potential to fetch premium prices in other countries and increase incomes for growers and producers."

"The challenge for Vanuatu is to expand the range of those products where it has a comparative advantage and seek greater access to overseas markets," said Dr McGillivray.

Pacific Economic Survey 2009 also singles out labour mobility and sound management of energy as areas that could be strengthened to help Pacific island countries withstand economic shocks.

"Labour mobility can lead to higher levels of remittances being sent back to home countries, which helps drive local economies," said Dr McGillivray. "The world always needs skilled workers. If Pacific islanders receive further education and training they will be better placed to seek work in the region and in other parts of the world."

"Improving energy management will also help countries manage external shocks more effectively."

"At present, the price paid for oil varies significantly across the Pacific," said Dr McGillivray. "Bulk buying and storage of oil will lead to lower costs and free up money for other uses such as the delivery of basic services."

"And while solar and wind power require substantial up-front investment costs, in certain circumstances these and other types of renewable energy will provide long-term solutions to energy needs especially in remote islands," said Dr McGillivray.