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Country profile - Vanuatu

Vanuatu flag

Vanuatu - a string of more than 80 islands once known as the New Hebrides - achieved independence from France and Britain in 1980.

Most of the islands are inhabited; some have active volcanoes.

Vanuatu is mountainous and much of it is covered with tropical rainforests. Like most of the area, it is prone to earthquakes and tidal waves. Most of the people live in rural areas and practice subsistence agriculture.

Vanuatu has been spared the unrest which has befallen neighbouring countries such as the Solomon Islands and Fiji, although the largest island, Espiritu Santo, experienced a brief insurrection in 1980.

Local traditions are strong. Women, for example, often have lower social standing than men and have fewer educational opportunities.

The economy has been unable to grow fast enough to meet the needs of Vanuatu's expanding population.

The main sources of revenue are agriculture and eco-tourism. Both depend on the weather, and when, as in 1999, cyclones and persistent rain hit Vanuatu, both suffer.

Tax revenue is derived from import duties, and neither personal income nor company profits are taxed.

Vanuatu tightened up its tax and regulatory systems after the Organisation for Economic Cooperation and Development warned that it could face sanctions if lax taxation regimes were exploited by criminals for money-laundering.

Australia, a key donor, has pushed for good governance and economic reform in the islands.

Additional information