Port Vila, Vanuatu: The Asian Development Bank's (ADB) new Vanuatu Economic Report 2009 shows that the island nation has become one of the fastest growing economies in the Pacific region primarily driven by tourism, construction, and aid inflows.

Jointly funded by ADB and the Australian Government, the Report outlines the state of the economy, and presents a road map for addressing key development challenges.

Vanuatu is estimated to have grown by nearly 4% in 2009, an unprecedented 7th consecutive year of growth. In 2010, economic growth is expected to accelerate to around 4.5%, due to gains in construction and tourism.

“Vanuatu has proven that reform leading to improved lives for the people of the Pacific is possible. However we can't point out these successes without recognising the challenges that still remain. This report sets out a good road map for continued progress in Vanuatu,” Bob McMullan, Parliamentary Secretary for International Development Assistance said.

“While Vanuatu's strong economic growth, and improvements to the environment for private sector growth have been impressive, more needs to be done to sustain growth,” said Eugenue Zhukov, Regional Director of ADB in Australia.

The Report points out that the development of a long-term agriculture policy, improved governance, and management of the natural environment remain among the key development priorities.

The Report warns that improved health and education services are needed to meet the expectations of Vanuatu's fast-growing population. Economic growth will also be supported by domestic shipping and improving access to sanitation and drainage facilities in the capital, Port Vila, and its surrounds. The ADB report says the Vanuatu Government's sound financial footing will help them address development challenges such as social service delivery and job generation in rural areas.

The Vanuatu Economic Report supports the Government's goal of promoting inclusive, sustainable growth through the development of its nascent private sector. Although still small, Vanuatu's private sector has the potential to grow strongly if constraints to doing business are removed.

The Vanuatu Economic Report 2009 was developed in close coordination with key development partners in line with the Government's poverty reduction strategy, Priorities and Action Agenda for 2006-2015, along with its Planning Long, Acting Short Programme.