The Government’s highest priority in Budget 2021 is to boost Vanuatu’s economic growth and improve the wellbeing of all Ni-Vanuatu, in a way that is financially sustainable and does not jeopardize future economic growth. On this note, the 2021 Budget Policy Statement incorporates the Government’s economic and financial policies and priorities to achieve the policy objectives of the National Sustainable Development Plan (NSDP) 2030 and at the same time address the current challenges and activities in preparing for COVID-19 and responding to and recovering from TC Harold. These policies are essential because they will also increase investment, increase employment, boost revenue, manage state debt and at the same time enhance economic growth, improve service delivery and wellbeing for all the people in Vanuatu.
The Government Act provides that the Prime Minister sets strategic policy priorities and planning for the Republic of Vanuatu. Accordingly, the PFM Act Section 9 provides that the determination and the allocation of the financial resources are allocated in line with the policy priorities of the Government.In the development of the 2021 budget policy priorities, the current government captures the essence of the National Sustainable Development Plan or the People’s Plan 2030.
The National Sustainable Development Plan 2016-2030 (NSDP) is an interpretation of the UN’s Sustainable Development Goals that Vanuatu has developed in its own context to implement over the 15-year period. The NSDP has 3 pillars, Social, Economic and Environment, founded on Ni-Vanuatu culture, and went through extensive consultations throughout the provinces, stakeholders, and Government ministries. Therefore, the policy priorities represent important sectors of the economy that the government will support in 2021.
The country is expected to graduate from the Least Developed Country (LDC) status to Developing Country status in late 2020. However, given the current financial impacts on tourism and services sector posed by Covid-19 and TC Harold, the Government is a) dialoguing with relevant United Nations agencies in reviewing its graduation timeframe; b) refocusing its resources towards boosting the productive sector; c) strengthening health capabilities; and d) implementing sustainable recovery priorities.