Vanuatu‟s overwhelmingly rural population is dispersed across more than 80 islands, which stretch longitudinally over 650km of ocean in the southwest Pacific. Vanuatu has a relatively small, open economy with many development and structural constraints. But the nation also possesses some important advantages including a strong traditional culture which promotes social stability and family welfare; and fertile land, natural resources and pristine environment. The economy is based primarily on subsistence or small-scale agriculture, which provides a living for over 70% of the population. Fishing, offshore financial services, and tourism, are other mainstays of the economy. Development is hindered by dependence on relatively few primary commodity exports, vulnerability to natural disasters, and long distances from main markets and between constituent islands. Nevertheless, in the last few years there has been strong economic growth, positive government revenues and good debt management. GDP increased in 2007 by an estimated 6.6%, marking the fifth consecutive year of positive growth. This reflected strong expansion in tourism, real estate, and finance, as well as an improved contribution from agriculture. However, the economy remains fragile, with a growing population scattered across many, often isolated island communities. GDP per capita remains at levels similar to those of 20 years ago, with growth having failed to exceed the high population increase of 2.6 per cent per annum. To date the rural population has seen relatively few benefits of economic growth and internal migration continues to fuel the expansion of urban squatter settlements and unemployment.

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