| A SUPPLEMENT TO EUROMONEY/AUGUST 1996 Time to get better knownWhen prime minister Maxime Carlot Korman took power in Vanuatu in February, he inherited what should in theory be one of the brightest economic stars in the Pacific. Vanuatu not only plays host to the longest-established offshore financial centre in the region, but also boasts some of the biggest tourist attractions. These factors together with political stability have ensured steady growth. Last year, GDP rose by an estimated 2.5%. This year, according to the Reserve Bank of Vanuatu, it is projected to increase by 3%. There is plenty of other potential. More than 2,500 companies are now registered under the favourable terms of the International Companies Act. Together with offshore banking, insurance and the trust business, these directly contribute over Vt280 million ($200 million) to government revenue. Nevertheless Vanuatu remains heavily reliant on overseas aid. Last year, according to the Reserve Bank of Vanuatu, it totalled Vt3.5 billion, some 15% of GDP. This year it is likely to be at a similar level. And although the budget is balanced, financial constraints could hinder development. "Vanuatu has fantastic potential, but it hasn't been promoted enough," says Garry Tunstall, managing director of ANZ, Vanuatu's largest bank in terms of assets. |