Vanuatu floats scheme to sell passports to rich Chinese

Vanuatu floats scheme to sell passports to rich Chinese
Vanuatu's Prime Minister Joe Natuman.

AUCKLAND, New Zealand - In a near-miraculous escape, the death toll from a powerful cyclone that hit Vanuatu in March only reached 16. But the economic damage appears to have been even higher than first thought, prompting desperate government attempts to raise funds for reconstruction.

Aid donors have been distracted by higher-profile disasters such as the recent earthquake in Nepal, limiting aid to a trickle. That has the devastated island looking at other options, including a plan to raise money by selling "honorary citizenship" to wealthy Chinese investors.

The Vanuatu government said in mid-May that that 70 per cent of the country's population had been displaced by Cyclone Pam, a top-strength Category 5 storm that roared across the South Pacific archipelago of 277,000 people between March 12 and March 14. Hard data on the cyclone's impact is in short supply. But according to government ministers, about 188,000 people are in danger of running short of food due to losses of crops, forests, animals and marine resources.

Officials put the financial cost of the disaster at about 50 billion vatu (S$621.7 million), equivalent to 56 per cent of the tiny county's gross domestic product. The Asian Development Bank says the economy is likely to contract by 0.5 per cent this year, compared with its forecast for 4 per cent growth forecast before the disaster.

Ill wind

Some independent experts say the long-term impact on growth may be greater than these figures suggest. "Cyclone Pam was not like other cyclones that regularly hit Vanuatu," Matthew Dornan and Tess Newton Cain, told the Nikkei Asian Review in an email. "It was a unique event, which one hopes will not be repeated for some time."

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