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Vanuatu - Foreign Relations

Vanuatu maintains relations with more than 65 countries, including Russia, the People's Republic of China, Cuba, and Vietnam. However, only Australia, France, New Zealand, and the People's Republic of China maintain embassies, high commissions, or missions in Port Vila.

The government's main concern has been to bolster the economy. In keeping with its need for financial assistance, Vanuatu has joined the Asian Development Bank, the World Bank, the International Monetary Fund, and the Agence de Cooperation Culturelle et Technique.

The government encourages private enterprise, foreign investment, and producer cooperatives. Like other developing countries, Vanuatu is particularly interested in enterprises that add value to local primary products and that provide employment. In less lucrative sectors, the government sets up its own production companies or enters joint ventures with foreign investors.

Since 1980, Australia, the United Kingdom, France, and New Zealand have provided the bulk of Vanuatu's development aid. A number of other countries, including Japan, Canada, and Germany, and various multilateral organizations, such as the Economic and Social Council for Asia and the Pacific, the UN Development Program, the Asian Development Bank, the European Union, and the Commonwealth Development Corporation, also provide developmental aid. The United States, Canada, Australia, New Zealand, the United Kingdom, and Japan also send volunteers. In March 2006 the United States Millennium Challenge Corporation signed a 5-year $65.69 million Compact agreement with Vanuatu. Vanuatu retains strong economic and cultural ties to Australia, New Zealand, and France.

Australia is Vanuatus closest security partner, its largest aid donor and an important trade and investment partner. Australian investment in Vanuatu is estimated at $147 million, primarily in banking and in services sectors, such as tourism. Australian business interests in Vanuatu include Westpac, ANZ and cruise-ship operator Carnival Australia. Two-thirds of long-stay tourists to Vanuatu and almost all cruise ship passengers are Australian. Former Prime Minister Carcasses visited Sydney in July 2013 to witness the signing of a Memorandum of Understanding between Carnival Australia and the Australian Government to provide training and business development opportunities in Vanuatu (and PNG). An indigenous nationalist movement portrayed Prime Minister Edward Natapei as being under the spell of tax haven investors and Australian intelligence. The National Right Wing Movement or Freedom Fighters weremore left wing than right, but they liked the panache of their chosen name. Many of them are veterans of the 1970s independence struggle and by 2002 they believed their hour was coming again to fight new foreign forces, Australia in particular.

Vanuatu is a member of the United Nations and its specialized and related agencies, including the World Bank and the International Monetary Fund; Secretariat of the Pacific Community (SPC); Pacific Islands Forum (PIF); Non-Aligned Movement; Commonwealth; Group of 77; and Asian Development Bank (ADB).

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