Level Playing Field

Vanuatu is part of Melanesia and the Melanesian culture dictates that the more fortunate should care and provide for the less fortunate.  Within the "Kastom" culture of  Vanuatu the status of a person is measured by their generosity. 

As Vanuatu is a relatively poor country, a foreign investor will almost always be more wealthy than the Ni-Vanuatu people they work with.  Based on the culture, the Ni-Vanuatu expect the foreign investor to share the wealth.  This principle is institutionalized within government regulations and is found in most interactions between Ni-Vanuatu and foreign investors. 

An example is the business license.  A foreign investor will pay 10 times the amount for a business license as a Vanuatu citizen.  The Government is changing the business license tariff and this may eliminate this point making it equal between foreign businesses and local businesses.  We hope it is implemented and this will then represent a significant first step toward improving the investment climate.  We will update this page when the new tariff takes effect. 

A more subtle example is minimum wage.  The minimum wage is set very high by regional standards.  It is double the minimum wage in Fiji.  The minimum wage is strictly enforced for foreign investors but local employers often pay much less.  A house girl working for a expatriate employer for minimum wage can afford to employ a house girl for her own home and family. 

The inequities make it seem that a foreign investor would be driven from business by legislatively advantaged local business men but this is not actually the case.   Ni-Vanuatu businesses have a difficult time achieving long term success for the same reasons above.  When they get the capital to open a business they have heavy expectations placed on them to share with family and friends and their culture dictates that they must abide.  Many seemingly successful Ni-Vanuatu start-up businesses fail when they need more capital for maintenance or additional capital investment.  They have difficulty saving for this eventuality without alienating their family. 

The end result is a system that neither serves the foreign investor or the local citizen effectively.