The Emerging Pacific Leaders Dialogue 2014 Vanuatu Study Tour took place over the past week. One of the sessions arranged for these mid career emerging leaders from around the region was a Panel Discussion on “Land Issues in Vanuatu Today”. One panel member was Douglas Patterson from Island Property, one of the country’s main real estate and property development companies that has been operating in Vanuatu since 1990. These are his introductory remarks.
Issues concerning land are not simply to do with land ownership and land use. They are social, environmental, political and economic, as we probably all know.
It took from the beginning of mankind until about 1850 for the world to have a population of one billion people. That was only about 160 years ago, or about two lifetimes. The world’s population is now more than seven billion. During this time the amount of land on the planet has remained the same.
So it is entirely understandable that there would be intense pressure on land and land use in just about every country, not only small developing countries like Vanuatu.
Out of that seven billion people, about one billion are estimated to live in the developed world and about 6 billion live in the developing world. The population of the African continent doubles each generation.
The Pacific in general, but Melanesia in particular, faces a serious demographic challenge. More than half the population is under 24 and in broad terms, urban populations are doubling every 17 years, while national populations are doubling every 30 years.
Vanuatu’s 1999 Census reported that the country’s population was nearly 200,000. By 2020, which is only 6 years from now, estimates predict that the country’s population will be 400,000. And by 2070, when many of today’s young people will still be alive, it is projected to be one million.
Port Vila’s population at Independence in 1980 was about 7,000. It is now about 45,000 – living in the same land area. In other words, it has multiplied by nearly seven times in 34 years.
This rapid population increase that Vanuatu is experiencing of about 2.6% per year means less land per person; and less available land means higher prices where land is registered, (which in turn means an increasing divide between those who own property and those who do not), and more intensive use of customary or unregistered land for traditional gardening purposes.
Only 10% of Vanuatu’s land surface is registered. So for those people who actually do live off the land, rather than developing or selling it — reported to be about 80% of the population — a traditional form of rural life is still possible.
Emotionally, many people would like to retain at least some part of their traditional or customary life, however from a practical and commercial point of view, most people, especially those who live in or near the urban centres, are realising that this is rarely possible. Money is needed for just about everything in daily life from school fees, transport, electricity, water, clothing and so on. Whether we like it or not, Commerce and “Consumerism” has intruded into “Customary” life, and are not likely to leave.
The advent of the Internet and the rapid evolution of technology in general all around the world means that we are all living a less “traditional” life than ever before.
As in many developing countries, Vanuatu’s economic growth has not kept pace with the population growth. Here in Vanuatu, things have been made much worse by the collapse of foreign investment over the past decade.
According to the Vanuatu Investment Promotion Authority’s own annual reports, Foreign Direct Investment (FDI) was about VT 30 billion in 2005 – last year it was only VT 5 billion – a loss of more than 80% in nine years. In 2013 ten per cent of foreign owned businesses closed and did not renew their VIPA investor certificates.
This massive decline in foreign investment has been caused as much by the Global Financial Crisis as by domestic factors, such as high operating costs, expensive bank borrowing, land disputes, eroding infrastructure, political instability and corruption in Government, weak policing, a decline in local spending, and lack of enforcement of existing laws and regulations.
This sustained loss of foreign investment has led to fewer jobs and training opportunities and a large drop in Government tax revenue.
Because of these local challenges, the investment that we are managing to attract is largely concentrated in the two urban areas of Port Vila and Luganville, which make up only 1% of Vanuatu’s land surface, yet receive 80% of the FDI.
In fact, most of the investment and development taking place in Vanuatu at present is being done by those people who were either born here or who are long term residents and naturalised citizens who have come from overseas some years ago and made their home here.
Recent land legislation relating to the creation of new titles on previously unregistered land may well lead to a more open and transparent process, however this new process is much more time consuming and costly than ever before, so it is likely to take some time for any benefits of these new laws to be apparent.
You are part of the Emerging Pacific Leaders Dialogue, so it is appropriate to touch on the importance of leadership in the broadest sense.
In Vanuatu we have the laws we need but many would argue we don’t have the leadership we need to enforce them. Without strong leadership, not only are new opportunities lost, but what we already have is in danger of also being lost.
I am often asked “What does the private sector need from Government?”
On one level investors’ needs are quite simple – namely a certainty of process and a certainty of laws and legal enforcement.
To encourage sustainable investment, you need good, solid reliable laws but you also need wider social and political stability because investors need to have confidence not only in their project but also in the country generally, and not only for today or tomorrow, but for years to come.
Since Independence the majority of our investors have been foreigners, however their real views are rarely heard, and the depth of their outrage at seeing public funds they have paid in taxes being squandered and misappropriated rarely surfaces. And in some ways, as non-voters, they can be conveniently ignored by leaders and aspiring politicians.
However, if the Government wants investors to plan long term, then they must in turn offer long-term security to investors. That means strong reliable leadership is imperative.
It is entirely understandable that leaders do not want to relinquish the powers they have, or give up the worst of their self serving habits. When – and where – has it ever been different?
However, until there is in the mindset of leaders and public servants that their first and foremost obligation is to others and not themselves and their private or family or island interests, very little real change is likely to happen.
In some ways the fight is actually not against corruption, but against human nature itself. And if any of you know how to change human nature, make sure you see me after this meeting — because I haven’t worked that one out yet!