Foreign direct investment (FDI) is critical to Vanuatu, particularly now and post covid-19 crisis. But the private sector is so concerned that if nothing constructive is done as a result of working together with the Government, existing businesses will continue to close and new FDIs may not decide to choose Vanuatu as their investment location.An update highlighting key steps and milestones achieved by the Government and confirming that both its health and economic policy measures to contain the pandemic are effective and will remain so, is a positive message the VFIPA wishes to share with existing and potential investors.

The Government of Vanuatu has officially issued a lockdown of the entire country due to the COVID-19 pandemic, ending the Pacific nation’s status as one of the few countries in the world to remain virus-free. The same year category 5 cyclone Harold made landfall in Vanuatu where it became the second strongest tropical cyclone to ever hit the country, causing widespread destruction to the Northern islands of Vanuatu. The Vanuatu government also announced on the 15^th of July 2020 that the State of Emergency (SoE) which was introduced due to the COVID-19 pandemic and the devastation caused by Tropical Cyclone Harold in April was also extended until December 31 2020.

Tuesday 10^th of November 2020, health and Government authorities in Vanuatu have announced that they detected the country's first case of the coronavirus disease (COVID-19). The case is an asymptomatic man who had flown into the country on the 4^th of November 2020, from the US via New Zealand and Australia. The patient has been placed in isolation and contact tracing was fully carried out by authorities responsible for the safeguard of others. The Government of Vanuatu continue to address measures such as social distancing and good hygiene practices to the public.

The extension of the State of Emergency was signed by the President of the Republic of Vanuatu on 24^th of December 2020, for the SoE to be extended starting from the 1^st of January 2021 up to July 30^th 2021. This came after the recommendation made by the Vanuatu Ministry of Health with support of NDMO and other Government agencies following the continuous outbreak of COVID-19 affecting the globe.

In March 26^th 2021, mark the one year since Vanuatu took effective action to consider the wellbeing of the people addressing the COVID-19 pandemic. The outbreak of COVID-19 is unprecedented and felt around the world and the threat to public health service and social economic disruption threatens the long-term livelihoods and wellbeing of the people. The pandemic is heavily affecting the growth of the economic and leading to the widespread business disruptions in Vanuatu.

The COVID-19 pandemic is having a significant negative impact on the private sector in Vanuatu, and businesses and individuals are among the most severely affected. The Government of Vanuatu has budgeted total of VT2,865,919,100 to assist private sector, with negotiation between Banks to provide financial assistance to private sectors to apply for soft loans. Some of the business companies in the private sector having difficulties to cope with the current environment and are severely affected by the causes of the pandemic, and today they find it hard to operate business and had to closed down.

As a service activity, tourism is highly labor intensive, providing employment opportunity in Vanuatu. And contribute to the economic growth. The pandemic has significantly impacted every sector of the travel and tourism industry such as airlines, transportation, cruise lines, hotels, restaurants and other related tourism activities in Vanuatu. According to the National Tourism Impacts Survey, the pandemic greatly reduced workforce which results in total reduction of 2,077 full-time employees (70 % decrease) and 214 part-time employees (33 % decrease) within the industry. A total of 89% of tourism businesses agree to the VT 30,000 monthly payment offered by the Government to support their employees.

International trade resulting in exports and imports is going well despite the presence of the pandemic. Importing of goods has more than doubled for all goods. In 2020, there are export shipment of exported produce for New Zealand markets with assistance from the Government of Vanuatu under the Ministry of the Trade and Ministry of Finance. However, some business companies also raised concerns towards the demand of supplies and uncertainty of when the stocks will return if the orders are made given the current situation. Imports used to take a day or week to enter Vanuatu but now they take months. Closing borders mean all imports come into the country by ship accounting for the longer import wait period.

Despite the presence of the covid-19, in March 29^th 2021 marks a historic milestone which the Government and the people of Vanuatu have been looking forward to see. The export of Vanuatu products such as the Vanuatu Water entering the market in Shanghai, as China’s biggest city and a global financial hub. Vanuatu Water export breakthrough, will also expose and promote Vanuatu in the Chinese market.

This initiative may take Vanuatu Beverage Limited (VBL) quite some time to finally reached its goal, it is worth the efforts and backed by the necessary support from the Government. From an investment promotion perspective, the Vanuatu Foreign Investment Promotion Agency (VFIPA) is proud of this achievement. As part of its aftercare services, the Agency will continue to work and where appropriate, encourage and support existing business to explore and diversify into other activities, as demonstrated by the Vanuatu Beverage Limited (VBL).