What is Vanuatu’s GDP? What are the primary contributors to GDP?
KALOSIL: Our GDP is around AUD 800m ($722m) a year, and 40-45% comes from services and tourism, and the rest comes from agriculture, livestock, fisheries, and our blue economy. We are a small tax haven but not as big as The Bahamas or elsewhere.
What kind of investment is the government focusing on today?
KALOSIL: Actually the fund that I lead is investing in our infrastructure. So what we are doing now is building a big airport so that we can fly directly from Shanghai to Port Vila, Mainland China to Port Vila, Singapore to Port Vila. At the moment you cannot do that. You need to fly through regional airports if you want to come to Vanuatu, and that goes through Australia, New Zealand, New Caledonia, and Fiji. So we are investing in a big airport, a big wharf, and roads. We are interacting with the private sector and we want more hotels. We are investing in our cable. When someone wants to travel the world, the first thing that he's going to say is how can I connect with my family through the Internet. So we understand this is important.
We need people investment in tourism, in the hotel industry. We also need to further develop our blue economy, fisheries and other things. We need to develop our agriculture. We are getting about 150,000 tourists now through planes and 250,000 tourists through ships. Our target is in the next five years is to go up to 500,000 and maybe 1,000,000 tourists. We will need to feed them. We need to make sure these tourists will be busy doing something. So that's why there's opportunity for people to come invest in Vanuatu and we want to promote partnership. That is important, so that our people are part of that economy, not a spectator, but an actor of the economy.
Where are investors coming from?
KALOSIL: Today, they are coming mainly from Australia. They are coming from New Zealand, and they are coming from New Caledonia, the French people in New Caledonia are coming and investing. But now, there is a phenomenon happening in Vanuatu, where Chinese from Mainland China are also coming to invest in Vanuatu. There is lots of opportunity that we offer. My government is building this infrastructure, we are building a bigger airport so that we can fly you directly from Singapore and elsewhere. We are building ports and roads. We currently are laying our cable so that if you want to come in beautiful Vanuatu then you can access ICT telecommunications and you can download your movies as you do in your country.
There is a message I would like to give as Prime Minister, so I give you a pointer. You need to come invest in the area of tourism because we are mainly investing in that area, because Vanuatu is a paradise in one way. You have beautiful access available, you have beautiful beaches, sparkling waters, the people are very nice. As you know, twice we have won the happiest people on earth because well-being in Vanuatu is not based on GDP or money, it's based on your way of life. In the village, the people, if they want to wake up at 5 o'clock in the morning or 10 o'clock in the morning, they can do that. They can go fishing, hunting, or go to the garden.
Vanuatu is very safe. You don't have any of the problems that you have in other places in the world. So there is opportunity to come and invest in the tourism sector, even the blue economy, and even in the blue culture. Our plan is two fold, we have about 150,000 tourists coming from the plane, from the air, and about 250,000 coming from the sea. Our plan in the next five years is to get 500,000 tourists from the air and 500,000 from the sea and come to the figure of 1,000,000. It's ambitious I know, but we can do it with the help of the private sector.
How much is the federal government currently investing in infrastructure?
KALOSIL: Well it's combined. Next year we're going to invest about AUD 1.5bn ($1.35bn) on infrastructure, of which 50% will be donor funded and 50% will be a loan that we are taking because there is an economic impact on investments, which are roads and ports, and airports even. We are looking for PPP investment. So we are open for suggestions for anyone who would like to invest in Vanuatu.
What kinds of incentives does Vanuatu provide investors?
KALOSIL: If you are interested in investing in Vanuatu, what we are ready to give is 3 to 6 years of tax incentives, no duty, you would be exempted from duty, and you would be exempted from VAT, so you can focus on your investment. But what we will ask is a partnership with our people, because that would give you a guarantee for your investment in the long-term. So along those lines, even if you look on our website, if you click the Vanuatu website you're going to have all of this information included on our website. Yes we are using our ICT very well in Vanuatu.
Our plan in the next five years is to get 500,000 tourists from the air and 500,000 from the sea and come to the figure of 1,000,000. It's ambitious I know, but we can do it with the help of the private sector.
From where does the government of Vanuatu derive most of its revenue?
KALOSIL: Well our main revenue comes from the value added tax that we share and the other source comes from the duty that we exercise at the port. As you know, now we are part of the World Trade Organization (WTO) so slowly we need to go down to zero-rated. Also in the long-term, I don’t know if we will have income tax because it is a small economy. We have a saying in French, that you do not attract flies with vinegar, you need honey. So we are going to give honey so that you can come and invest in our beautiful country.
But in the near future we are investing in our infrastructure, so our mission is to double our GDP over the next 5 years. We want to do that. We have the potential to do that. We are serious. We have a good democracy in which you have the executive, the parliament, and of course the judiciary. We have a strong rule of law, so I think we have everything for you to come and invest in Vanuatu. And we speak French also; if you are Francophone you can come to our country.
What are the main challenges you face in terms of economic development in Vanuatu today?
KALOSIL: Vanuatu is a very vulnerable country. We have earthquakes, we have cyclones, we have too much water, and we have drought and that can happen throughout the year. This is why the UN has ranked Vanuatu as one of the most vulnerable countries on the planet. So this is why, with our nice future with ICT, I would ask if we can have a system to monitor that.
We need to be able to tell our people swiftly through the phone that there is a tsunami coming. A warning system or maybe there is going to be a network for a cyclone. This is important for us. Not only that, we need to educate our people. For example, I'm trying to equip our parliament with tablets so that we don't use paper and spoil the planet. So we will become, slowly slowly, what you call, attached to ICT, and this is important for our future.
Of course, like every economy, the challenge is to grow the economy. But our challenge in Vanuatu is that we have a strong culture, and we need to keep that culture. For example, we have 121 languages in Vanuatu, of which more than 11, only 10 people speak. We need to keep this language because it's part of our culture and our identity. So this is a challenge; we have to marry it, the future with the development, and keep our tradition.
How successful has ITU Telecom World 2013 been for you?
KALOSIL: ICT costs money. It's not a free world. If you want for example, that kind of phone, an iPhone will cost $600. If I want to give it to the people of Vanuatu, of which there are more than 250,000 now, it will cost a lot of money. We cannot afford to do that. This is why today I've asked the donors to help us to put a system in place and they have been very helpful in dong that. They can see that ICT, it's a must. We also want to make sure that ICT will go to every school. Just imagine you don't need to have a beautiful house. You can be in a remote area in an attached house, use your phone, access the Internet, get information, and that's what we need to do. That's the power of ICT.
I was on Paama Island; if you check on the archipelago there it is in the middle, an island called Paama, and there was a landslide there. At least 25-30% of the population was affected. So I went there to visit as Prime Minister. I took some photos and I sent them over the Internet to our disaster office in Port Vila and I also put them on Facebook so that the youngsters who were in school, who have their parents on Paama, can get some information. Within less than 30 seconds, someone had replied and said thanks to me, so that's the power of ICT, and we need to develop that a little further in order to make services happen.