What is the Vanuatu vatu (VUV)?

Credit Ratings & Outlook

In the latest credit ratings from December 1970, Moody's gives Vanuatu a B2 rating, with a stable outlook. Fitch has a stable outlook with a B+ rating. Finally, S&P last issued a B+ rating, with a stable outlook.

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

GDP

In 2010 the total GDP was $698,753,388 in US Dollars, while the per capita GDP was $2,911. It grew by 3.05% over the previous year.

Unemployment

The latest unemployment rate for 2009 is 4.60%.

Consumer Price Index

The latest consumer price index for 2010 is 119.18.

Political Structure

The current head of the government is Prime Minister Sato Kilman, and the head of state is President Iolu Abil (in a ceremonial role).

Currency Details

The Vatu, denoted by VUV or sometimes Vt, is the official currency of Vanuatu. Introduced after independence in 1982, the currency replaced the New Hebrides Franc and the Australian Dollar.

The Vatu is a unit on its own and has never been split into hundredths or any other subdivisions. The currency holds such low value because it was designed to be similar in value to the CFP franc (XPF) that is used in New Caledonia and French Polynesia.

The Vatu’s value floats, but is presumed to be pegged to a fixed but confidential basket of currencies.

Sovereign Ratings for Vanuatu

Vanuatu is not rated.

What does it look like?

Political Structure

The government of Vanuatu is a parliamentary republic following a system of law created from former dual French and British systems. The government is comprised of three branches, namely the executive, legislative and judicial.

The parliament of Vanuatu is unicameral and has 52 members; these are elected every four years by popular vote. The leader of the main party in the parliament is usually elected Prime Minister and leads the government. The chief of state, the President, is chosen every five years by the parliament and the presidents of the six provincial governments. Forming a Coalition, however, has proved problematic at times, especially as seen with respect to the competition between England and France in backing up leaders sympathetic to their interests.

Prominent Figures

Chief of State President Iolu Johnson ABIL (since 3 September 2009) Head of Government Prime Minister Edward NATAPEI (since 22 September 2008); Deputy Prime Minister Ham LINI (since 22 September 2008) Cabinet Council of Ministers appointed by the prime minister, responsible to parliament Elections president elected for a five-year term by an electoral college consisting of parliament and the presidents of the regional councils; election for president last held 2 September 2009 (next to be held in 2014); following legislative elections, the leader of the majority party or majority coalition is usually elected prime minister by parliament from among its members; election for prime minister last held 22 September 2008 (next to be held following general elections in 2012) Election Results Iolu Johnson ABIL elected president, with 41 votes out of 58, on the third ballot on 2 September 2009

Key Economic Factors

Economic Overview:

As it is based in the South Pacific, the economy of Vanuatu revolves primarily around small-scale agriculture, which provides a living for approximately 65% of the island’s population. Other mainstays of the economy include fishing, offshore financial services and tourism (the last of which has 50,000 visitors in 2004). A small light industry sector caters to the local market. Tax revenues come mainly from import duties. Economic development is hindered by dependence on relatively few commodity exports, as well as the island’s vulnerability to natural disasters and its large distance from main markets. The government of Vanuatu has promised to tighten regulation of its offshore financial center, in response to foreign concerns. The island’s main targets for growth are tourism and agriculture (namely livestock farming). Vanuatu receives tourists and foreign aid the most from Australia and New Zealand.

Key Industries:

Food and fish freezing, wood processing and meet canning.

Agricultural Products:

Copra, coconuts, cocoa, coffee, taro, yams, coconuts, fruits, vegetables, fish and beef.

Import Commodities:

Machinery and equipment, foodstuffs and fuels. <

Export Commodities:

Copra, beef, cocoa, timber, kava and coffee.