Regions and Countries

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p. 3 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Vanuatu : I. Country Performance Assessment

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B. Poverty Assessment

9. Cultural safety nets that have existed through a strong customary tradition of social relationships have served to ensure absolute poverty did not exist in most of this largely subsistence society. However, this situation is now changing. As people become increasingly dependent on the cash economy, traditional social networks are breaking down. Many families are having difficulty fulfilling customary expectations; others are opting out of the traditional system altogether. Geographic remoteness and isolation mean that smaller communities are finding it increasingly difficult to maintain any form of economic and social access to the wider society. As a result of their isolation, and governance problems in recent years, remote communities have been experiencing deterioration in both quality and quantity of government services. This is manifested in inadequate transport and communications infrastructure, declining health and education services, and inequitable distribution of government services and development benefits generally. For example, in 1996, just prior to the introduction of the CRP, almost three-quarters of the health budget was spent on urban rather than rural services, thus benefiting only 20 percent of the population, a pattern repeated for many government services¹. These inequities in service delivery are weakening rural systems and accelerating urbanization.

10. With GDP per capita of around $1,100, poverty problem has not been regarded as being serious. Nevertheless, people in most outer islands live merely on subsistence level and the growing urban drifting is creating new urban poor groups. As the real GDP growth has failed to support the rapid population growth of over three percent during the last three years, the poverty situation has worsened. According to official statistics, Vanuatu, with Human Poverty Index of 46.4 in 1999, is ranked the third poorest country among the ADB member countries in the Pacific. The vast majority of Vanuatu people are in the subsistence or informal sector, and the search for employment, cash income, and education has resulted in a concentration of the population on the main islands of Efate and Santo. Moreover, as the income-earning is heavily centered on businesses owned by major investors, the level of income earned by ordinary local households remains very low, leaving the per capita GDP index as largely irrelevant to the whole population.²

1. See United Nations and Vanuatu: Sustainable Human Development in Vanuatu, United Nations, Suva, 1996.
2. The average cash income for a rural family is estimated to be only $780 per annum.
3. Siwatibau, S. Gender, Population and Development Sector Review for Vanuatu, 1996.

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