New FDI registered increased 15% - Partnership programs become more effective
2016 has been one of great achievement for VIPA, delivering on its mission to grow job creation foreign businesses, improve its investment facilitative services role and boost synergies between key stake holders focusing on attracting foreign investment to Vanuatu.
An increase of 15% in the number of new projects approved compared to the previous year is evidence of this impressive performance. However, it is worth noting that efforts contributing to this achievement have been taking place against the background of severe disruptive events with impacts considered detrimental to the country’s business environment. For example, Tropical cyclone PAM (TC PAM) devastated Vanuatu in 2015 with damages worth 64% of the national GDP and leaving long-lasting negative impacts on every resident in particular the foreign direct investment industry.
While existing investors considered a recovery process for their business operations challenging, potential investors on the other hand see this as an opportunity for them, especially in the construction and logistics industries. VIPA management, its Board of directors and key stakeholders ensured customers confidence is assured through faster turn-around in response time and application processing time.
And most crucial of all the challenges was the introduction of “income and corporate taxes”. The announcement came as a surprise to many, especially the private sector who is responsible for the productivity that contributed the most impact to the country’s growth performance. VIPA maintained its stand in support with the private sectors that the policy needs careful analysis before committing to it. Especially the negative impact both taxes will have on “investment” and “productivity” as the key determinants to positive growth.
Vanuatu’s Single Unique Proposition continues to deliver: Vanuatu’s value proposition to global investors and corporates as a “Tax Haven Country” continues to resonate. Post TC PA recovery projects have been attractive to investors because of the absence of income and corporate taxes. For example the number of new proposals in the “Construction” and related industries increased 86% compared to the previous year.
Customer responsiveness: Staff interactions with customers through emails, telephones and walk-ins have reached a record high during the year. While the nature and scope of these inquiries vary greatly, VIPA made every effort to ensure its responses to its customers are timely and of quality. According to its “Investor Tracking System”, Investment Opportunities accounted 40% of the total inquiries recorded compared to 28% for the previous year.
Making Investment Facilitation a priority: VIPA devoted a significant amount of time to facilitate a number of investors on prospectors’ mission. Regardless of whether such missions have been successful (project ideas becoming a real project), the commitment and willingness demonstrated by VIPA through such engagements contributes significantly in raising its profile at the international level.
Leveraging on Partnership Programs: Effective FDI facilitation can be achieved only if key stake holders pull resources together and ensure excellent coordinated approach mechanism is in place. Building and strengthening of partnership programs has been a focus for VIPA during the year. These excellent collaborations between VIPA and its stakeholders have contributed to the results achieved as presented in this annual report.
Despite serious domestic encounters, VIPA’s operations remain steady. Like other government departments, VIPA staff have delivered for Vanuatu at a time when resources have been under pressure and economic challenges prevailing. And the staff at VIPA continue to be proud ambassadors for the country at home and abroad.