Binding and not-so-binding constraints to economic growth from Vanuatu’s productive sectors

There is convergence of opinion that stimulating broad-based economic growth from productive-sector activity is a priority in the next phase of Vanuatu’s development. A recent study commissioned jointly by AusAID and NZAID examined some of the issues and options in supporting this objective. While the report (Bazeley and Mullen 2006) also discusses theoretical aspects of achieving equitable growth at scale and the particular challenges of managing long-term agricultural-led growth—and provides a commentary on policy and institutional processes—this article is extracted from its preliminary examination of constraints to growth. That examination concluded that in the context of Vanuatu’s productive sectors experiencing comparative advantages and disadvantages, and in the context of some productive-sector enterprises enjoying relative success, the challenge the country faces is one of working to remove multiple inefficiencies throughout existing value chains (including value-added through policy and donor interventions), rather than recognising critically binding constraints. Potential for growth