Outline

VIPA went through a challenging and rewarding period during 2005 as the Board and the management continues to strive towards proactively promoting and facilitating foreign investment into Vanuatu. Government line agencies, Provincial Authorities and the Private Sector in facilitating investments in Vanuatu. This Report serves to inform and update Stakeholders and the Public on the activities and 2005 achievements, highlighting the number of Foreign Investment Approvals; Volume of proposed investments; economic sectors that received most Investment Approvals; locations of such investments; number of local proposed employment; and which countries are our main markets for Foreign Investments. 2005 saw an increase in New Foreign Investment Approvals with 101 New Projects. Total number of Investment Approvals is 177 including Variation and Private Investor Approvals. Australia remains Vanuatu's major market for foreign Investments followed by China and New Zealand. The value of proposed investments has reached a new record in 2005 since VIPA was established in 1998. Lack of infrastructure hinders foreign investments in other Provinces. Tourism Sector received more foreign investments accounting for over 50% of total proposed investments.

Challenges

VIPA experienced some legal issues regarding the loopholes in the VIPA Act, especially Reserved Investment. VIPA is currently helping the six (6) Provinces to write up their Provincial Investment Policies. VIPA has carried out FDI Awareness Seminars throughout Vanuatu. Chief Executive Officer Vanuatu Investment Promotion Authority

SUMMARY OF INVESTMENT PERFORMANCE

In 2005, a total of 434 applications/forms were received by VIPA. During 2005 the five major contributing sectors with highest proposed value of investment were in Hotel & Restaurant (46 percent), Tourism (20 percent) Agriculture & Forestry (18 percent) Fisheries (10 percent) and Wholesale & Retail with 6 percent. The Four (4) major contributing Countries with highest proposed investment value were United Kingdom (30 percent), Australia (22 percent), China (17 percent), JV - Locals (that is joint ventures between foreign investors and ni-vanuatu) 15 percent, Greece (9 percent) and New Zealand with 11 percent.

Local Employment

1. This reflects the value of investment in a number of applications received in the Agricultural & Forestry sector. With a total of 177 projects, Port Vila remained a target for investors in 2005 with 76 percent, Luganville (14 percent), Shefa Province (Rural areas) (6 percent), Sanma Province (2 percent) Malampa and Tafea Province each with 1 percent.

Investors by country of origin

While the value of investment varies by sector and country, the number of applications approved by VIPA in 2004 indicated that most applications come from Australian investors with 54 percent, followed by China with 17 percent, Joint venture with other countries of origin (JV-Others) 11 percent, New Zealand 10 percent and France 8 percent.

INVESTMENT TREND 1999 - 2005

A total number of 109 new applications were approved in 2005 and 77 percent of the projects were implemented.

THE VANUATU INVESTMENT PROMOTION AUTHORITY

Workshop on the Provincial & Sectoral Investment Policy on 23rd & 24th March, 2005 The Chairman of the VIPA Board, Mr Roy.M. A total of 3 Board meetings were convened.The Senior Investment Officer, Mr. Willie SAKSAK attended MIDA Training in Malaysia from 18th - 29th July 2005. MIDA and VIPA co funded the training. The new applications received recorded the highest value of investment when compared with previous years.

Challenges

There is still greater work needed for the VIPA database in order to provide better information on foreign investment in Vanuatu. Increase in the number of Projects Hotel & Restaurant contribute the highest value of investment in 2005 as a result of the highest number of applications received. The VIPA Website continued to prove popularity in promoting Vanuatu as an investment destination. The Vanuatu Government increase in the VIPA budget of five million vatu has assist VIPA in its overseas promotion mission in 2005 It has to be noted that the investment value showed the highest when compared with previous years since the inception of VIPA as shown on Table 3 on page 8 of this report indicating investors confidence in investing in Vanuatu through the Vanuatu Government investment incentive package in attracting Foreign Direct Investment (FDI). Joint Ventures between foreign investors and Locals recorded the single highest value of investment with a major project on Tanna in the tourism sector. Table 3. Foreign investment Approvals, Value of Investment and Employment by Country/ Group

Table 3.
Number of New Projects, Value (VT) Invested and Employment Opportunities, 1999 - 2005
	Projects		Investment VT		Local Employment
Year	Approved	Implemented	Proposed	Actual	Proposed	Actual
1999	156	83	13,154,680,000	2,088,400,000	2,711	519
2000	85	33	5,992,901,025	1,761,850,000	1,224	294
2001	57	32	5,789,233,160	1,338,030,012	814	458
2002	75	19	3,450,299,783	1,008,468,147	352	74
2003	59	33	2,807,156,309	732,919,536	319	111
2004	71	31	2,785,860,044	638,980,702	787	207
2005	109	85	29,888,316,663	14,999,575,744	4,194	3,224