ADB's Work in Vanuatu
Financing the Future
Since 1981, the Asian Development Bank and Vanuatu have been working together to build the economy and make the whole country—from the capital city to the most remote outer islands—more resilient.
In Vanuatu, there was a longstanding tradition of burying money in tin cans rather than putting it in the bank. People would sometimes lose their savings this way or their money would be damaged beyond use.
People resorted to saving money this way because they had few alternatives. Most of the country’s population live in rural areas on remote outer islands. Access to banks and other financial services traditionally has been severely limited as there are few bank branches, poor road infrastructure, and unreliable shipping services.
In 2004, ADB and Vanuatu partnered to get people’s savings out of the tin cans in the garden and into banks, while at the same time offering other financial services such as microfinance to people living on the country’s remote outer islands.
The project, in coordination with the National Bank of Vanuatu, opened more than 4,000 new accounts for rural customers with the equivalent of more than $6 million in deposits. Mobile banking services were also launched with 40 agents and more than 7,800 registered customers. In addition, financial literacy training programs were provided to more than 6,000 people.
Rural banking is just one of the challenges facing Vanuatu but the country has overcome many obstacles and has posted strong economic growth in recent years, driven primarily by tourism, construction, and aid inflows from development partners. Revenue is also generated from the export of copra, beef, cocoa, and kava.
ADB and Vanuatu have been working together to build the country’s economy and spread prosperity since 1981. The first loan to the country was approved in 1982 and helped establish the Development Bank of Vanuatu. This was the first time ADB assisted a development bank in the South Pacific.
In the 1980s, ADB helped to stabilize Vanuatu’s government finances, develop the country’s agriculture and ports, and provide vocational training. By the 1990s, the work of the partners expanded to include support for interisland shipping, the copra and cocoa industries, and urban infrastructure.
In 2010, ADB and the World Bank opened a joint office in the capital city of Port Vila. This provided on-the-ground support for key initiatives, including the Vanuatu Interisland Shipping Support Project, which is improving infrastructure in Port Vila and outer islands and establishing a shipping system for remote islands. The office has also supported the work being done as part of the Port Vila Urban Development Project, which is improving road networks and drainage systems in and around the capital.
In March 2015, Tropical Cyclone Pam struck Vanuatu. Immediately after the extremely destructive category 5 cyclone, ADB approved a grant from the Asia Pacific Disaster Response Fund. This was followed by the approval of two cyclone recovery projects for the reconstruction of the country’s roads and schools. Secondary schools in Tafea Province are being rebuilt and made more resilient to disaster and climate change risks.
In 2016, ADB expanded its office in Vanuatu to provide closer support to projects related to energy, transport, water, urban infrastructure, and development of the country’s private sector, including agribusiness and tourism.
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.