KEY RESULTS 

• Since 2013, the year after Vanuatu's accession to the World Trade Organization (WTO), the Enhanced Integrated Framework (EIF) has invested approximately USD 6.5 million in Vanuatu to strengthen institutional capacity for trade, revive the tourism sector and enhance trade facilitation.
• The EIF supported the formation of the National Trade Development Committee (NTDC), established under the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu (“people of Vanuatu”) Business, now known as the Ministry of Trade and Commerce (MTC). The NTDC platform is the active engine of trade coordination in the country that puts the Government in the driving seat. It is now sustainable beyond EIF funding, with support from the Government of Vanuatu and the Government of Australia.
• In 2017, the Government of New Zealand, in partnership with the EIF, co-funded the rehabilitation of new seafront spaces in Port Vila, after they were destroyed by Cyclone Pam in March 2015. The area remains a popular attraction for tourists and locals, creating stronger connections to the local economy.
• In 2018, the EIF, in partnership with the Government of Australia, co-funded an internationally lauded trade facilitation system upgrade by establishing the Vanuatu Electronic Single Window (VeSW). As a result, the Government managed to reduce the time taken for the issuance of biosecurity certificates from six days to ten minutes and thus, achieved a 95% reduction in paperwork and an 86% reduction in physical trips required for the certification processes. These reforms contributed to cutting down CO2 emissions by 5,827 kilograms.
• In 2021, with EIF and Japanese funding, together with support from the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Universal Postal Union (UPU), Vanuatu Post was assisted in automating customs clearance processes for small postal packages; volumes of which have boomed due to worldwide increases in e-commerce. The innovative system now helps to streamline the customs clearance processes.

The Republic of Vanuatu is an archipelagic nation of 83 islands located in the South Pacific Ocean. Its economy is based on agriculture, fishing, tourism and offshore financial services. Sixty-five percent of its approximately 340,000 people (as of 2024) are employed in agriculture – which is largely subsistence or small-scale. Due to its small land and population size, geographic isolation and exposure to climate change and other natural disasters, the country is vulnerable to economic shocks. 

Since 2015, Vanuatu has experienced devastating infrastructural and economic impacts including through Tropical Cyclone Pam, Cyclone Harold, a volcanic eruption and the COVID-19 pandemic. Regardless, Vanuatu persisted confidently with its goal of graduating from the least developed country (LDC) status in 2020, for which it had qualified in 2012, but was delayed due to the country's vulnerabilities. According to Ambassador Sumbue Antas, Vanuatu's Ambassador and Permanent Representative to the WTO:

Vanuatu's partnership with the EIF began in 2007, when the Integrated Framework (IF), the precursor programme to the EIF, supported a country-owned Diagnostic Trade Integration Study (DTIS) published in 2008. The IF subsequently supported the implementation of some of the priority actions identified in the DTIS. This was done through capacity-building of the Department of Trade and the establishment of the Trade and Development Unit, both of which have also contributed towards the WTO accession. The first project implemented through the EIF played a critical role in kickstarting the post-WTO accession process in 2013, and in particular in bringing together civil society, the private sector and the Government in a common agenda.

Institutions for enhancing trade development 

The EIF supported the formation of the NTDC. The NTDC’s purpose is to coordinate trade policy decision-making. It was formed by the Council of Ministers in 2012, following the endorsement of the policy and institutional frameworks that guide Vanuatu’s approach to mainstreaming.

The NTDC meets three times a year and comprises government bodies, the private sector, civil society and donor partners. Besides discussing the trade development agenda, ongoing projects and funding, the NTDC provides a platform for sectors producing goods and services to assess the trade situation and emerging issues. The Committee promotes good governance by ensuring Aid-for-Trade funding is spent appropriately and effectively. The NTDC is instrumental as the primary trade platform to discuss and make recommendations to the Government on areas of need to support the private sector, for example; to quote Ms Ruth Amos, Head of the Vanuatu Bureau of Standards:

From 2013, the EIF has also supported the capacity development of the MTC for policy formulation, implementation and assessment. It has further strengthened the Ministry’s abilities to mainstream trade in the Priorities and Action Agenda (PAA) and the Planning Long, Acting Short sectorial policies and strategies document. This informed the 2006-2015 PAA Update, which was published in 2012. 

In 2019, the Trade Development Division became the Vanuatu Aid-for-Trade Management Unit (VAMU), located within the office of the Director General of the MTC, and which functions as the Government's implementing arm for development partners' projects. In addition to supporting the NTDC, VAMU coordinates the monitoring of the Vanuatu Trade Policy Framework (2012 TPF and 2019-2025 TPF Update [TPFU]); provides advice on trade-related issues for other policy documents; negotiates and manages Aid-for-Trade projects; and supports line agencies to secure financing. 

VAMU has also successfully broadened its fiduciary management scope to encompass additional donor partners, consisting of the Australian Aid Programs – Governance for Growth; New Zealand's Aid-for-Trade initiatives; and the European Development Fund initiatives.

A consolidated trade and development roadmap

The 2012 Vanuatu TPF and the 2019-2025 TPFU, with the Government of Vanuatu as the main implementing partner, were developed through the EIF's Diagnostic Trade Integration Study mechanism, with co-financing from partners such as the European Union. These TPFs play an equivalent role to the DTISs and the Medium-Term Programme for Trade Development, which was also supported by the EIF.

The TPFU is a multi-sectoral policy aligned with the country’s 2016-2030 National Sustainable Development Plan. It consolidates into a single document the main trade-related directions of the Government’s sectoral and sub-sectoral policies. Its mission is not only to improve the trade and business environment, but also to create job opportunities for all and ensure that wealth is more evenly distributed. The TPFU implementation is monitored by the NTDC with a traffic light system for each agreed action. 

The TPFU was the first policy document in Vanuatu to include a chapter dedicated to trade and sustainable development, as it relates to the environment, climate change and gender equality.

Building back better

In 2015, tourism employed around 26% of Vanuatu's total labour force. Cruise ship arrivals were growing rapidly, accounting for 56% of total international visitors. When Tropical Cyclone Pam hit Vanuatu that year, it destroyed tourism infrastructure on the portside and seafront precincts in Port Vila. Ni-Vanuatu entrepreneurs, mainly women who sold food, handicrafts and other products to tourists along the pier, experienced a loss in income as they had nowhere else to conduct their business. 

The Governments of Vanuatu and New Zealand, together with the EIF, funded a tourism infrastructure regeneration project that was completed in 2017. Valued at nearly USD 19 million, the waterfront infrastructure regeneration project covered approximately 1.2 kilometres, including connections to the commercial district. The portside works comprise a tourism building for cruise passengers to facilitate landside tours; a coastal promenade; access points to water; landscaping; and market buildings with added power and internet access where the “market mamas” can proudly sell their wares. 

In a 2018 interview, Rosalie Vatu, founder of Bulvanua Arts and Handicrafts, a cooperative of more than 30 women whose access to tourists was affected by the portside destruction, told the EIF that the new facilities had brought significant change to their livelihoods. She said:

The Government of New Zealand contributed USD 15.6 million, along with USD 3.1 million from the EIF Trust Fund and USD 62,000 from the Government of Vanuatu. The EIF’s contribution was mainly directed at climate mitigation measures, focusing on climate-resilient infrastructure that could resist natural disasters by constructing a rock revetment along the bay. The EIF's support in 2024 is taking stock of changes happening after the reconstruction of the seaside, capturing figures and qualitative accounts of the changes in tourism revenues and revenues for those running the market stalls.

Post-LDC readiness

Vanuatu was recommended for graduation from the LDC category at the 2012 triennial review of the United Nations Committee for Development Policy. The United Nations Economic and Social Council and the General Assembly approved the recommendation. Following Cyclone Pam in 2015, a three-year extension was granted, and Vanuatu graduated in December 2020. 

In this process, the EIF directed its support at preparing the country for a post-graduation future through the analysis of the potential effects of the loss of preferential trade arrangements – the duty-free treatment afforded by most WTO members under the LDC concessional measures. The United Nations Department of Economic and Social Affairs, the United Nations Economic and Social Commission for Asia and the Pacific and UNCTAD provided policy, technical and financial support. The EIF supported trainings on evidence-based best practices for LDC graduation strategies, bilateral discussions and agreements on cooperation and exchange. 

The process led to an EIF-funded post-graduation strategic action plan in 2019, the so-called Vanuatu LDC Graduation Smooth Transition Strategy. It was endorsed in July 2020 and its implementation began in August 2020, ahead of Vanuatu's effective graduation in December the same year.

Building a one-stop shop to facilitate trade 

Facilitating trade through state-of-the-art customs, biosecurity and quality infrastructure systems is one of the TPFU's 12 goals. The EIF’s support, in partnership with the Government and Australia, enabled the country to establish and continue to expand the functionalities of the VeSW, a system based on the Automated System for Customs Data (ASYCUDA-World). The ASYCUDA-World software was developed by UNCTAD and is used by 102 customs administrations around the world to handle manifests and customs declarations, along with accounting and transit and suspense procedures. 

Vanuatu made history as the first country to extend ASYCUDA’s functionality to cover the processing of incoming international passengers through immigration with the development of a module that captures and stores data from the passport bio-data page. Vanuatu’s goal was to further extend ASYCUDA’s functions to provide a sanitary and phytosanitary module (ASYSPS) and a module for the UPU Customs Declaration System (CDS). Subsequent modules, including those co-financed by Australia, include dedicated mechanisms for the processing of disaster relief and stronger control of ozone-depleting substances.

Initiated in 2018, with the MTC as the Main Implementing Entity, the new functions were supported by USD 1.5 million from the EIF, with additional financing and in-kind support from partners. The project implementation included an assessment of the customs clearance processes; the development of an interface prototype by UNCTAD; and the training of customs and postal staff on handling the system. The assessment benefited from inputs from more than 45 Ni-Vanuatu institutions from both the public and private sectors through online e-trade readiness surveys and subsequent interviews in Port Vila.

ASYSPS automates the application, approval and payment of sanitary and phytosanitary (SPS) certificates. It has the added benefit of reducing carbon dioxide emissions by eliminating or reducing paperwork in SPS certificate application and cargo clearance processes. ASYSPS was launched in March 2020. At the time, Vanuatu was one of the only seven countries globally, and the only country in the Pacific region, running a single window system with a SPS module. By October 2020, eight months after rollout, 347 SPS export certificates and 1,950 import permits had been issued. A total of 114 biosecurity officers and stakeholders (of which 53% are women) were trained and, significantly, the average application process time went from days to as little as ten minutes.

Since the implementation of the VeSW system, Vanuatu’s Department of Customs and Inland Revenue has reported a large increase in annual revenue collection, from around USD 33 million in 2016 to USD 134 million in 2023. Impressed with its success, Vanuatu’s Parliament approved the budget for the project to continue into the next phase.

Furthermore, beginning of 2020, the EIF and the Government of Japan co-financed the USD 400,000 integration of the UNCTAD and UPU’s CDS into ASYCUDA (ASYCUDA-CDS). This system helps streamline the customs clearance processes by allowing participating postal and customs offices to exchange electronic advance data, screen packages and calculate duties and taxes. This means micro-, small- and medium-sized enterprises can participate in e-commerce as an affordable and direct means to ship merchandise to customers. 

The Vanuatu Post automated customs clearance processes were piloted in May 2021. The timely launch allowed the supply chain to keep moving and preserve jobs just as COVID-19 lockdowns led to a dramatic rise in e-commerce. Vanuatu was selected out of 22 LDC countries worldwide to pilot the UPU CDS.

Throughout 13 years of partnership between the EIF, the Government of Vanuatu and other development partners, Vanuatu has grown remarkably, always looking ahead for solutions, conscious of the needs of Ni-Vanuatu, identifying opportunities, vulnerabilities and solutions, and embracing the value of partnership. This was best summed up by Ambassador Sumbue Antas, who highlighted the importance of the EIF’s commitment to country ownership in the process of conceptualizing, developing and implementing Vanuatu’s inclusive trade agenda. He said: