Between tax incentives, friendly and hardworking people, and tropical climate, the Pacific Islands are a great place for investors around the world. In your opinion, what are the biggest assets and untapped potential that Vanuatu has to offer international investors over the rest of the Pacific Islands?
The only advantage Vanuatu has over the neighboring countries in the South Pacific is its zero direct taxation. Vanuatu is some way behind in terms of infrastructure, IT and skills development.
Country branding is crucial in a global world and Vanuatu has been successful in projecting an image as a competitive financial services center. However, the country recently slipped onto the OECD money laundering grey list. What are the specific actions that VFSC puts in place in order to preserve Vanuatu’s transparency within its financials sector? How are you making sure that Vanuatu’s transparency is acknowledged overseas?
Our laws must be on par with leading OFCs. Coupled with this is our ability to adequately supervise the institutions operating within our borders, so, we must build our capacity to effectively do this and be confident in making lawful decisions.
Vanuatu presents a well-developed financial system. Vanuatu’s offshore financial services emerged as one of the largest earners of foreign income actually. Taking into account your wealth of experience, how would you summarize the current offshore financial services industry in Vanuatu?
Vanuatu established a finance centre in the early 1970s as an alternate source of revenue given the country’s lack of natural resources. However, the global industry has grown to over 40 such OFCs and developed countries such as the US, Singapore and Hong Kong are also becoming OFCs as well. But, Vanuatu has vast experience in the industry and a huge knowledge base and with the advancement of IT, Vanuatu might benefit from its isolation in the long run.
Vanuatu’s financial services sector is well developed and stable. However there are several countries in the region that are doing great financially speaking. Why would an investor come to Vanuatu instead of investing in other Pacific Island? How do you provide with support to those investors who wish to come to Vanuatu?
Again, our tax regime is the key advantage but this must be backed up by up to date legislation and a pool of appropriate talent supported by a good environment for law and order, education and health facilities.
The VFSC was formally established in December 1993, after the Vanuatu Parliament enacted the Vanuatu Financial Services Commission Act No. 35 of 1993. Now, 23 years later, what would you say are VFSC’s most significant outcomes?
Transition from manual to electronic mode of doing business.
The Commission has additional responsibilities including the development of the financial services industry in Vanuatu. How are you actively fostering the development of the financial services industry from your position?
The most important thing is to obtain the political will to make changes and forge ahead. Complete changes to existing laws and introduce new ones. Once the laws are completed, the VFSC can work others on implementation of the laws, improve the supervisory regimes and build pools of talent.
Last year was launched the online business registry. Harvard Business Review is well renowned for publishing break through ideas about innovation and technology. Could you tell the readers of Harvard Business Review how do you apply innovation and technology within the VFSC?
IT is the future in this industry. All our work must automated, our services must be available 24/7 and these services must be available on a “value for money” basis. Compliance functions and report filings should be automated. We should be looking at administrative penalties instead of the courts for non compliance matters.
Mr. Andrews, there is no doubt that you are very committed to enhance both the reputation of Vanuatu as an international finance center and investor confidence in Vanuatu’s jurisdiction. What are the major goals you would like to achieve in the short and in the long term. What are the main challenges you face and how do you manage to successfully overcome them?
In the short term, Vanuatu must get off the FATF Grey list and in the longer term, Vanuatu will aim to become the financial hub of the South Pacific.
Harvard Business Review is also a business-managing manual from top decision makers around the world. How would you describe your management style and how has it helped you succeed in all of your different career stages?
You have to trust your subordinates and this means delegation. You have to keep your employees happy and this means being a good employer. By providing good terms and conditions makes employees go the extra mile for you but you must not lose sight of the interests of your shareholder, in this case, the government.
The readers of Harvard Business Review include many of the world’s most influential business and political leaders. What final message would you like to send them about Vanuatu and the VFSC?
Vanuatu is a destination for you. We have the experience and knowledge to serve you well. In this IT age, distance does not matter, so, we hope to see you soon.