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Analyzing Vanuatu’s economy and public finances through the lens of disaster resilience

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Vanuatu
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World Bank
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As Natural Disasters Threaten Vanuatu’s Economic Gains, Agriculture and Education Provide Opportunities

PORT VILA, April 11, 2022 – New World Bank research has highlighted the opportunities and economic benefits that greater investment in disaster resilience could provide for Vanuatu, while emphasizing the returns of agricultural innovation and improved education.

The report ‘Analyzing Vanuatu’s economy and public finances through the lens of disaster resilience’, produced in partnership with the Government of Vanuatu, reviews the country’s economic and fiscal performance and examines future prospects, including a specific focus on natural disasters. The new report has found that natural disasters have the potential to increase Vanuatu’s public debt by 13 percentage points, or roughly US$230 million, in comparison to a scenario where Vanuatu is fully disaster-resilient; risking vital – and hard-fought – development gains.

The report examines how large external shocks shape Vanuatu’s economy and highlights the overriding importance of disaster-resilience to the lives and incomes of ni-Vanuatu families and businesses, it looked at the important role seasonal workers play in the economy and for household incomes, reviewed the health and education sectors and identifies options to drive more disaster-resilient growth in Vanuatu’s agriculture and tourism sectors. This includes opportunities to shift Vanuatu’s agriculture sector from its current high-cost, low productivity cycle - with research suggesting that the sector could become a driver of resilient growth for the country.

“This new research highlights that economic and social resilience is central to the success of Vanuatu’s economy and provides information on important export opportunities for locally grown produce such as cocoa and kava that could make a real difference to ni-Vanuatu farmers,” said Annette Leith, World Bank Resident Representative for Vanuatu and Solomon Islands.

Examining Vanuatu’s education and health sectors, the report suggests prioritizing the provision of textbooks and teaching materials in the local language and proposes the reallocation of health funding to more preventative measures for controlling non-communicable diseases like diabetes and heart disease. These recommendations are in addition to the main emphasis on the impact that natural disasters have, and will continue to have, on the learning and health outcomes of Vanuatu’s population.

PRESS RELEASE NO: 2022/075/EAP

Contacts

In Sydney:
Hamish Wyatt
+61 450 517 534
hwyatt@worldbank.org

In Washington:
Kym Smithies
+1 202 4580 152