Vanuatu, Republic of: Interview with Mr. Raymond Vuti

Mr. Raymond Vuti

Acting CEO (Vanuatu Investment Promotion Authority (VIPA))

Mr. Raymond Vuti

Vanuatu, like many other countries in the Pacific region, is striving to attract FDI. What would you say are Vanuatu’s most significant competitive advantages generally and in terms of investment compared to other Pacific Islands?

In terms of competitive advantages, the tourism industry is one of the leading sectors here since many years ago. At the national level, the Government level, Minister’s level, and even everybody including the institutions, we take tourism industry as an important industry because of the advantages that we have.

Vanuatu has to be known also as a tax haven country. In the Pacific, Vanuatu is the only country that has zero income tax, zero copra tax and all those taxes those other countries in the region have, and that’s one of the biggest advantages that Vanuatu presents. This is crucial when promoting Vanuatu as an investment destination abroad.

Furthermore, I would say that other of the key advantages that we have here is the organic production of vegetables and beef. Most people when they come they talk about the beef here in Vanuatu. The beef is number one because it is organic. We also has advantages with other production such us the coffee, although we are just a small industry, but it has the potential to expand.

Other competitive advantage that I can say that Vanuatu has is the quality of its environment. The air is clean, and the water is clean. Also when you come into the country, people play a very big role in making people love to come here into this country and they always want to come back because of the hospitality provided to investors and their businesses.

VIPA’s mission is to facilitate, promote and foster FDI in Vanuatu and to generate greater economic prosperity for the people of Vanuatu in close collaboration with key line Government and private agencies and institutions. Could you tell us about your main focus in these areas and about your priorities as new acting CEO?

As acting CEO of this institution, let me take us back a few years okay to be able to give you a perspective on where VIPA was and then where VIPA is going to be. Previously, although VIPA’s mandate is to promote and to facilitate investments, we didn’t do any promotion into external markets. We don’t have the budget to go to Australia, to New Zealand, to Europe, to US, to China, to do promotional marketing.  

We depend on our current investors who are already here. They have their own networks and they have been helping VIPA a lot in promoting Vanuatu outside as an investment destination. We don’t do promotion outside but yet people outside know where is Vanuatu is. What we focus on here in VIPA is in assisting clients from outside when they come here. We give them all we can to create confidence such us information about processes they have to go through to establish a business, application forms, certificates, etc. Once they complete our application form we can give them an investment approval certificate. After that it is easy for them to get the approval from other institutions.

In regards to my position now as an acting CEO, I would like people to see VIPA shifting from a reactive institutions, into a more proactive promotional institution, into a promotional agency of Vanuatu.

How are actively working to make VIPA swifts into a more proactive institution for the benefit of Vanuatu?

I would like to mention the establishment of the one stop shop. The good news is that next year we will move from this building to the French Embassy’s building, where the one stop shop will be located and we will have other authorities in the same building. The beginning of the one stop shop will start to be realised next year. This is one thing I would like to see moving and achieving successfully.

The other thing I would like to focus on is the policy of hearings between VIPA and other government institutions. I would like to reinforce the policy we have in place so that whatever we say to potential investors or whoever who is interested to come and invest here, I would like policies to be realistic or to be the real situation the found in Vanuatu. When the clients go to see other departments those departments may speak a different language and the clients may experience different things. For that reason establishing a policy of hearing between different sectors is very important.

Thirdly, when I am saying that before we did not do overseas promotions because of our budget constrains, but also because we don’t have a list of investment projects available and developed into some kind of standards that can be sold at the international level. In this area, I want to emphasises in developing this portfolio and make it available, so that we can have them in our websites, or any government officials or representative going out of Vanuatu, when visiting other countries, can provide with these materials in order to promote investments in our country.

Lastly, Vanuatu is a developing country and this institution is still quite new. It came in 1998, to me it’s a relative new institution with a relative new mandate. People’s perception as foreign investment destination has been negative from the beginning. I must honestly admit that today that perception is still negative. One of my biggest challenges is how can I shift this negative perception into a positive perception.

The 80% of the population are in the rural areas and when they hear that VIPA is going to bring an investor, a foreign into Vanuatu to do business, it’s not easy for those people to accept it. This is also my challenge, how can I shape the minds of these people to see the benefits or to see the good sides of foreign investments. They should be able to see the project in question or the foreigner as an opportunity for them. How can they benefit from this opportunity rather than completely see them on a different deception altogether.

According to VIPA’s website, there are many investment opportunities in different sectors such us agriculture, fisheries, forestry, tourism… Which ones do you believe that are the most attractive business opportunities for FDI and partner companies looking to invest in Vanuatu?

At the moment VIPA’s priorities are aligned with Government’s priorities, and tourism is the top priority right now. In terms of resource allocations, in terms of efforts, we will make sure that tourism is the number one as much as possible, but at the same time we know from our records that the picture at the moment is not looking really good. Tourism is mainly focus here in Port Vila. This is not good because 80% of the population are in the other outer islands and they would like to benefit from tourism activities and we need to reach this people. Linking tourism with agriculture is a good option in order to spread the benefits of the tourism industry to the rural areas. This will ensure that the benefits of tourism will reach the community right down in the outer islands

Deputy Prime Minister, during our interview, told us that country branding is crucial in a global world, so to both of us, it is a primary role to portrait Vanuatu as the most competitive destination for investors in the South Pacific. What are your main strategies to fulfil this primary role of positioning Vanuatu as the premier Pacific investment destination in the international marketplace?

At the moment VIPA does not have a long-term investment promotion strategy. What I am thinking right now is to have in place the component of that strategy that will make an impact positioning Vanuatu as a premier destination here in the Pacific.

One thing I would like to see addressed is the business environment. When you look at the list of doing business reports produce by the World Bank, Vanuatu is not there. Vanuatu has shifted from where it was before. Vanuatu was good and it has moved from bad to worse. From this position I know that international investors before coming and invest into the countries they like to consult indicators like this one published by the Word bank. After researching, investors will conclude automatically that business environment in Vanuatu is not so good and they will go to invest somewhere.

I think one of the things to implement here is to address locally the business environments at the national level. When compared to other countries in the region, Vanuatu has to develop its regulations, specially the lands system, which is really something that is having a negative impact on investments. Another thing I would like to focus on is to build stronger network between strategic partners locally. We have to build up good relationship with them and secondly establishing good relationships with international organisation like for example PITCO. PITCO is an example of doing international marketing and also I would like to see more collaborations and more understanding between Vanuatu’s foreign embassies and consulates. We have an embassy in Australia, in New Zealand, in China, and I would like these embassies to have their role in promoting and facilitating investments in Vanuatu.

You mentioned that the Act that you have now was developed in 1998 and since that time the business environment has changed dramatically so we can say that it is not so strong and it will definitely be needed for the Act to be reviewed. How is this affecting FDI in Vanuatu?

The foreign investment act we have was developed in 1998. Then in 2009, we had ITs from the IFC. They came here, they did a review of the act and did some streamline of the business processes. One of the outcomes was the review of VIPA’s act. After the review of that act, it was never approved in the Parliament. This is something that I would like to take seriously by the Ministry or the Government, to see if it is ready for approval. Then it has to be conceded, if it is not conceded for approval then something has to be done.

According to our research, you have been part of VIPA for long time. What is the most important knowledge acquired during the years in terms of promoting FDI in Vanuatu that you are putting into practice today as an acting CEO for VIPA?

I joined VIPA in 2010; this is my sixth year here. I joined VIPA as a manager of investment promotion, mainly responsible for investment promotion at the Government of Vanuatu. In regards to the most important lesson learnt, I can say I have read and I have seen from most countries how they have shifted from where they were before to where they are now, based on market changes and demands from investors.
When I came in, I knew that this was about investment promotion and facilitation. I thought we would promote and facilitate, but I didn’t realise about the regulatory role. I had the view that if we were promoting something, we should be also regulating at the same time, but regulating within the context of the investment promotion authority, not overregulating.

This is something that I have observed and many people say you cannot function as both roles, as a promoter and as a regulator as well. It is challenging and you have to understand what are you doing. If you want to apply regulatory measures you have to make sure that you look with a scope, that you are not contradicting your main mandate to promote and facilitate.

I am a believer and I believe when the government says that Vanuatu economy is private sector lead, I see this institution as the mediator or the middleman between the government and the private sector.

As you are well aware, the readers of HBR include many of the world’s most influential business and political leaders. What final message would you like to send them about Vanuatu and VIPA?

The world is becoming very small, it is becoming interactive and nobody is hiding from anybody. We all are part of a game; we all are part of a team to play a game because we are connected in way one or another. Vanuatu has signed a number of agreements, trade agreements, for example the WGO. From the Vanuatu Investment Promotion Authority respective, I send this message, I am very thankful that whoever is going to received this, whoever is going to get connected through this interview or through this media, I am very happy that they will know that Vanuatu is a growing country with many potential and if they are thinking of investing in a new market or in an involving market, or if they already have a business and they are thinking of relocating, then I am making this special call over that Vanuatu, because is the best option they can think of.