Countries and Regions

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Country Strategy and Program Update 2003-2005: Vanuatu

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I. Country Strategy

1. The Government of Vanuatu gives priority to (i) developing rural areas; (ii) lowering obstacles to private business; (iii) restoring good governance; (iv) improving participation of civil society in the affairs of government; and (v) closing the gap between the rich, poor, and disadvantaged¹. While Vanuatu has substantial long-term growth prospects due to its natural resources, the country suffers from low social and economic development indicators: an adult literacy rate of only about 34% (30% for women); gross domestic product (GDP) growth that has not kept up with the high rate of population growth; increasing unemployment; weak private sector investment; an overburdened legal sector; and substantial budget deficits.

2. The strategy of the Asian Development Bank (ADB) for Vanuatu supports the Government’s priorities by focusing on (i) building capacity for sound economic management and good governance; (ii) reducing poverty, particularly in rural areas; and (iii) creating an enabling environment for private sector development. Due to severe constraints, however, the strategy will yield results slowly. A summary statement of the strategy is in Appendix 1.

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