Tourism Revenue Is Zero And This Pacific Island Nation Earns Money By Selling Passports!

Covid-19 has had a huge impact on economies around the world, especially those that rely heavily on tourism for their financial revenues. Vanuatu, an island nation in the Pacific Ocean, is one of them.

Vanuatu’s fragile economy has been hit by the lockdown caused by the outbreak and the double impact of Category 5 hurricane Harold in April. Surprisingly, however, the Pacific island nation, which relies heavily on tourism, still posted a record budget surplus of 3.8 billion Vanuatuatuatu (about $33.3 million) in the first half of 2020.


The country’s controversial “citizenship for Sale” programme is behind it. In its recently updated half-yearly economic and financial report, the Government of Vanuatu reported a 32% year-on-year increase in project-related revenues. Between January and June this year, the project has helped the government raise $62.6 million, nearly 80 percent of the project’s projected annual revenue.

Moreover, sales of Vanuatu passports are still accelerating. Ronald Vosar, chairman of the country’s Civic council, told the Daily Mail of Vanuatu that sales of Citizenship had generated more than $84.6 million in revenue as of mid-August, well ahead of expectations for the current year.

At least 650 people have been granted Vanuatu citizenship through the program since the beginning of the year. But most will not settle on the island, taking advantage of vanuatu’s visa-free policy to enter places such as the European Union, Britain and Russia, which now have strict entry controls.

Vanuatu’s Citizenship program costs $130, 000, of which about $80, 000 goes directly to the government, with the rest going to the program’s agent, who also pays a 15 percent tax on income. The project agent must be a native Vanuatu citizen by birth or naturalization.


Opposition to the project has not stopped since it was launched in 2016. The Vanuatu party of Bob Loughman, the current prime minister, had promised during the campaign to review the “citizenship for sale” programme. After elections in March, Mr. Loughman appointed Mr. Vosar chairman of a citizens’ council to review the project.

However, in May, shortly after the review began, Mr Vosar said that the proceeds from the Sale of Citizenship programme were vital to the Government. In today’s context, the project has funded the government to fight coVID-19 and deal with the devastation caused by hurricanes. Hurricane Harold destroyed seven of the country’s islands in April, affecting the lives of hundreds of thousands of people and causing damage estimated at up to $100 million.

The number of agents in the country licensed for the project doubled immediately after Mr Vosal’s comments. Public opinion, which used to be strongly opposed, has eased of late. Perhaps, as the government says, it is the project that keeps Vanuatu’s economy afloat in these days of zero tourism revenues.

Vanuatu has built up unprecedented cash reserves through its “sell citizenship” programme, which has allowed the government to pay off most of its domestic debts and some of its foreign ones more quickly. Not only that, but the government’s COVID-19 relief program has been made possible by its relatively large cash reserves.