The Asia Pacific Women thought leadership series brings focus to the status of women in the Asia-Pacific region through expert commentary on women’s social inclusion and economic engagement in several aspects of life.
Vanuatu’s national sustainable development plan, Vanuatu 2030 The People’s Plan, commits to growing both the formal and informal sectors to ensure that no one is left behind. Already a complicated undertaking, with the global COVID-19 pandemic and the subsequent closure of Vanuatu’s borders in March 2020, it has become part of a national crisis response. The devastation wrought to northern Vanuatu by Category 5 Tropical Cyclone Harold in April 2020 has deepened this challenge even further, and Vanuatu’s women leaders are stepping up to meet this challenge head on.
“COVID-19 has made us think differently about the informal sector”, says Serah Tari, a leader in one of the Port Vila Handicraft Market-houses and informal sector advocate.
In Vanuatu, women comprise over half of the informal sector working primarily in food services and traditional handicrafts; the significant income from sales to tourists has effectively dropped to zero since international borders closed in March 2020.
“The market vendors asked me to help them work out how to deal with COVID and how we can advocate for a place at the table to be part of the Government’s consultations on tourism sector recovery”.
There are few organised informal sector lobby groups in Port Vila, Vanuatu’s capital and seat of national government. Normally the domain of provincial governments, informal sector advocacy has now become the focus of the newly formed 43-member Local Handicraft Connections Association of Vanuatu (LHCAV), led by Serah.
“We needed to be a legal entity if we wanted our voices to be heard during the private sector consultations,” says Serah. “We are 43 men and women, and behind each of us are 10 artisans. We support over 430 households alone from all over Vanuatu. Informal sector support for rural and urban livelihoods is considerable, so we deserve to be recognised”.
The group is lobbying the Vanuatu Government on behalf of handicraft vendors to ensure that the informal sector can access the government’s economic measures to minimise the effects of the COVID-19 pandemic on the national economy. Key to the Vanuatu government’s response is its Economic Stimulus Package (ESP) for COVID-19. The ESP supports business continuity with an employment protection scheme that provides up to Vt30,000 (AUD350) per month per salaried worker for eligible businesses, and also offers grants for formally registered SMEs. In addition, the Vanuatu National Provident Fund (VNPF) offered interest-free COVID loans of up to Vt100,000 (AUD1,400) for registered members over a limited period.
The challenge for the handicraft vendors, prior to registering the LCHAV, was their minimal interaction with government, which is primarily through an annual business license fee of Vt5,000 (AUD75). As self-employed women, they are not eligible for the employment protection salary subsidies, and, prior to March, most did not contribute to the VNPF, so could not access the COVID-19 loan scheme. They have since joined over 5,000 new VNPF members between February and April 2020 to become eligible for COVID-related economic support initiatives. As a nation-wide VNPF registration exercise, there is a clear message: participate and register in the formal system, and there are benefits.
The COVID crisis has brought discussion of the formal economy and the role of the informal sector to the fore, particularly in the tourism sector which is hardest hit by the prolonged closure of international borders.
While not an outright focus of recovery policy discussions, the crisis has precipitated a series of events that are shining a spotlight on the intersection of Vanuatu’s formal and informal systems.
“The tourism sector is the hardest hit by the COVID crisis, and yet Vanuatu remains COVID-free which is to our economic advantage”, says Liz Pechan, hotelier and representative of the Vanuatu Hotels and Resorts Association (VHRA). Since March 2020, Liz has spearheaded an industry lobby group to influence the Vanuatu Government to initiate travel bubbles as part of a national economic recovery strategy. “Private sector collaboration with the Vanuatu Government is essential for economic recovery, both in terms of protecting jobs, investments and ensuring business continuity”, says Liz.
As a resort owner and employer of over 80 employees before COVID, Liz has been successful in securing ESP support for her remaining workers. “When borders closed, our business revenue went to zero in 3 days”, says Liz, whose resort depends entirely on an international tourist market. “In addition to the loss of some of our close staff family, we also had to pause all our community engagement activities which include sourcing supplies from locally based market providers, handicraft producers, local tour operators and the nearby village businesses (for transport, security, community conservation and handyman services)”. The trickle on effect to informal tourism service providers has been significant. The economic impact of COVID across the entire sector is significant and documented by the April 2020 DoT-VTO COVID and TC Harold Tourism Impact Survey.
Liz has been working closely with the Vanuatu Government and various technical taskforces for the aviation, tourism and travel industries to build a strategy for recovery of the tourism economy. “Across the Pacific, the industry is working with governments to advocate travel bubbles, whether it is a Pacific, Melanesian, Bula or Tamtam bubble”, Liz remarks. “At the end of the day, our industry knows the role that tourism can continue to play in Pacific economies, providing markets for domestic producers and supporting cultural and environmental safeguarding initiatives”.
With tourism contributing up to 30% of Vanuatu’s GDP, ignoring the sector in any national economic recovery plan would be remiss not only of the loss to jobs, but would deliver the death nail to floundering businesses, including those indirectly serving the tourism industry.
It also has a deeply gendered impact on livelihoods: the Vanuatu’s National Human Resources Development Plan notes that on average 50% of the tourism sector workforce are women.
The Vanuatu Government’s Budget Policy Statement for 2021 re-orients an economic focus to productive sectors. Re-training over 3,000 tourism workers (both formal and informal sectors) in skills for new, emerging economic sectors is an option that is likely 2-3 years away; it is not an immediate solution. Maintaining existing skills and ensuring a policy focus on skills during a pandemic, however, are important steps in the right direction for economic recovery.
The formal and informal sectors within the industry have historically been stereotyped as foreign and indigenous sectors respectively. However, according to statistics from the Department of Tourism and Vanuatu Tourism Office, in reality 93% of Vanuatu’s 2,500+ formally registered tourism businesses are locally owned.
Two prominent examples of large, ni-Vanuatu-owned tourism businesses can be found on Tanna Island: Tanna Evergreen, a resort and tour business owned by female entrepreneur Merian Numake, and the Entani Company, which has the concession for the island’s major tourism attraction, Mount Yasur volcano. On Efate, The Havannah, a luxury couples-only resort is co-owned by indigenous woman
Liz Pechan. The Havannah last year received accreditation as a National Geographic Unique Lodge of the World, a prestigious accolade that only a handful of resorts in the Pacific region can claim.
Recovery of the industry must therefore go beyond an assumption that it is only to protect foreign business investments, it is also about the wider effect of the industry in providing jobs, income-generating opportunities and the flow on to the broader economy.
Serah’s informal producers understand this point very clearly. So clearly, that in June 2020 they rallied in force to vote Liz Pechan in as the first indigenous Tourism Councillor for VCCI. “Liz understands the links between the formal and informal sector in tourism”, Serah says. “We know she will represent the industry holistically, from the handicraft mamas to that of big business”.
The visionary leadership required for finding a viable, pragmatic solution for Vanuatu’s tourism industry rests in the actions of people like Serah and Liz who are forging convergence of both formal and informal systems in pursuit of a common cause: to revive a suffering sector, rebuild livelihoods and engage in broader economic policy discussions to position tourism appropriately.
It is the leadership of these strong women who value equal participation, voice and commitment from both formal and informal private sectors that is providing the necessary momentum and impetus to the Vanuatu government to progress towards a workable tourism response to the COVID crisis.
With many of Vanuatu’s neighbours either facing a second wave of COVID, or struggling to suppress the number of new cases, it is possible that pursuit of a travel bubble will be stalled indefinitely. What then of a critical economic sector that supports countless livelihoods?
If anything, the formal-informal bridging that Serah and Liz have begun to build in the tourism sector is an invaluable approach that can transfer to other new/emerging sectors for national economic recovery.
Anna Naupa is a Pacific policy and development specialist and currently works in the field of human development and skills. She has a particular interest in the interface between formal, state-based and informal or traditional systems and the implications for development policy. She is currently Country Director for the Australia Pacific Training Coalition for Vanuatu and Nauru.