An archipelago strung out over 1300 km (800 miles) of the South Pacific, Vanuatu lies 1000 km (620 miles) west of Fiji. Mountainous and volcanic in origin, only 12 of the 82 islands are of significant size – Espiritu Santo and Malekula are the largest. Formerly the New Hebrides – ruled jointly by France and Britain from 1906 – Vanuatu became independent in 1980. Politics since independence have been democratic but volatile.

Indigenous Melanesians, ni-Vanuatu, comprise 94% of the population. Of Vanuatu's 82 islands, 67 are inhabited, but 80% of people live on 12 main islands. The population is becoming more urbanized as one in eight ni-Vanuatu now lives in Port-Vila. However, 75% of the population still live by subsistence agriculture.

Vanuatu is home to some of the Pacific's most traditional peoples, and local social and religious customs are strong. With 105 indigenous languages, Vanuatu boasts the world's highest per capita density of languages. Bislama pidgin is the lingua franca.

Women have lower social status than men, and bride price is still commonly paid. Many educated women refuse to marry because of loss of property rights. To boost equality, primary schools must now take 50% girls.

Strengths

Expanding services sector, including tourism and offshore finance. Major economic reforms instituted, including the introduction of a value-added tax and resizing of the public service in return for assistance from the ADB. Large fishing potential.

Weaknesses

Large trade and budget deficits. Rate of growth has stagnated in recent years and contracted in 1999. Dependence on agricultural sector, vulnerable to adverse weather and fluctuating market prices. Shortage of skilled indigenous labor.

Ni-Vanuatu politics is best described as anarchic. Political allegiances are swiftly changed and governments often toppled. Instability was behind the reluctance of France – not shared by Britain – to grant independence, achieved in 1980, and led to alleged French support, reinforced by the anti-French stance of the VP, for an abortive bid for independent status by Espiritu Santo that year.

The VP has dominated the political scene, ruling unbroken under the charismatic Fr. Walter Lini from 1980 to 1991. Although Lini was dismissed as premier in 1991 and defected from the VP, he continued to be a dominant political figure until his death in 1999. The VP had returned to power in 1998, leading a government based on patched-up relations with Lini and his supporters, but by the end of the year, unable to command a stable majority, the VP had gone into opposition. A broad-based anti-VP coalition was ousted in 2001, bringing the VP, under Edward Natapei, back into power in coalition with the UMP. Natapei continued to head the coalition after the 2002 elections, despite the UMP's marginal victory.

Vanuatu's main resources are its arable land – only partly utilized – and its forests and waters. These could be exploited by the tourist, timber, and fishing industries. New export crops are being explored to offset declining copra and cocoa exports. Beef is of growing importance. Nuclear power development was banned under 1983 legislation.

A network of rural clinics and village health workers has helped to improve health levels. Nominal fees are charged.

The abolition of fees has helped to boost primary enrollment. Illiteracy is a major concern.

The dominance of subsistence farming and small-scale cash cropping has helped to prevent extreme poverty. Most of the rich are not ni-Vanuatu.

In 1906, Britain and France set up the New Hebrides under joint rule.

• 1980 Independence; Walter Lini of VP prime minister. Secession bid by Espiritu Santo.
• 1991 UMP coalition with NUP set up by Lini after his expulsion from VP.
• 1999 Tidal wave causes extensive damage.
• 2001 VP–UMP coalition; Edward Natapei prime minister.