520 the contemporary pacific • fall 2000 Vanuatu 1999 has seen the consolidation of political events in Vanuatu from the mid-nineties onward. It began with sadness for Vanuatu with the death of Father Walter Lini in February. He had suffered a stroke in 1987, but had political reviews • melanesia 521 remained active in politics, and at the ment with the National United Party. time of his death was the leader of the Since 1991 the political situation opposition. In order to understand has remained fluid, with politicians Vanuatu’s current political situation switching allegiances between parties some awareness of the historical polit- fairly freely, to the detriment of gover- ical alliances within Vanuatu is neces- nance. The only significant changes sary. It is therefore appropriate to to the political parties since 1991 are begin a consideration of 1999’s politi- Korman’s formation of the Vanuatu cal situation with a brief review of Republican Party (vrp) in 1998 after Lini’s role in politics from the found- rivalry between Korman and Serge ing of Vanuatu. Vohor, the leader of the Union of Lini had been instrumental in Van- Moderate Parties, and the presence of uatu’s struggle for independence, and, members of Parliament drawing sup- as leader of the Vanua‘aku Party (vp) port from the Tanna-based John Frum had headed a stable government until movement. 1987. The party’s major opposition The appointment of Vanuatu’s first came from the Union of Moderate ombudsman, Marie-Noelle Ferrieux- Parties (ump) which was formed by Patterson, in 1994 resulted in the the union of several small franco- exposure of a number of scandals phone parties. These parties were involving prominent politicians. As a largely distinguished by their support result of these reports attacks on the bases, with the Vanua‘aku Party position of ombudsman increased, attracting anglophone and the Union with the Council of Ministers attempt- of Moderate Parties francophone vot- ing to terminate her employment in ers. This francophone-anglophone 1997. Although that move was unsuc- divide continues to be a presence in cessful, after some legal scuffling the Vanuatu’s politics. After Lini’s stroke Ombudsman’s Act was repealed. A in 1987 his leadership began to be new Ombudsman Act (no 27 of 1998) challenged by Barak Sope, whose was passed in 1998, alongside a Lead- challenges to vp policy led to his dis- ership Code Act (no 2 of 1998). These missal from the cabinet. In late 1988 new pieces of legislation can be used Sope broke from the Vanua‘aku Party effectively to ensure transparent and and formed the Melanesian Progres- accountable governance but have yet sive Party (mpp). Instability and dis- to be fully tested. In the middle of satisfaction in the vp ranks continued 1999 Ferrieux-Patterson came to the to grow and in 1991, following a vote end of her term as ombudsman and of no confidence, Donald Kalpokas was replaced by Hannington Alatoa. replaced Lini as prime minister and Since that time the office has been leader of the Vanua‘aku Party. As a maintaining a lower profile, while the result Lini formed the National United new ombudsman adjusts to his job. Party (nup). In the elections of 1991 The wrangle over the ombudsman the Union of Moderate Parties, headed helped to increase dissatisfaction in by Maxime Karlot Korman, narrowly the government, and in early 1998, defeated the Vanua‘aku Party and following an ombudsman’s report quickly formed a coalition govern- detailing improper management 522 the contemporary pacific • fall 2000 within the Vanuatu National Provi- encouraging private-sector-led growth, dent Fund, rioting occurred. This and improving equity between sec- resulted in a state of emergency being tions of the population. The reform declared. Money that was paid out of program is largely being funded by the Provident Fund after this incident concessionary loans from the Asian led to increased liquidity in the econ- Development Bank. omy. As a result a 20 percent devalua- In accordance with this reform tion of the vatu was announced by program various pieces of legislation the Reserve Bank. Although this were passed in 1998. Acts to increase devaluation was immediately revoked, efficiency and accountability in the the resultant instability deterred for- public sector included the aforemen- eign investors. It also had a significant tioned Leadership Code Act. Acts that detrimental impact on tourism, which were passed in order to ensure effec- is a major area of economic activity tive financial management and respon- for Vanuatu. sibility, in both national and local gov- In this very unstable atmosphere, ernments, include the Expenditure the elections were held in March Review and Audit Act (no 3 of 1998), 1998. No party gained a clear major- the Public Finance and Economic ity, and eventually the Vanua‘aku Management Act (no 6 of 1998), and Party, headed by Donald Kalpokas, the Government Contracts and Ten- and the National United Party, headed ders Act (no 10 of 1998). The gov- by Walter Lini, entered a coalition to ernment also underwent major form a government with Kalpokas as restructuring in accordance with the prime minister and Lini as deputy. Government Act (no 5 of 1998). Nine This coalition was stable until Octo- ministries were created, each with ber 1998, when the National United responsibility over a number of Party was sacked from the coalition departments. This replaced a previous after alleged breaches of the coalition structure of almost thirty ministries, agreement. The Vanua‘aku Party each with smaller responsibility. Each immediately entered into a coalition ministry is managed by a director with breakaway members from the general, who has a managerial rather Union of Moderate Parties and two than a political role. The number and John Frum members of Parliament. role of political advisors has also been The year 1999 saw the continua- reduced. crp also aimed to right-size tion of a Kalpokas government, and the public sector by 10–15 percent, continuation of policies that were and by the end of 1998 one hundred committed to the furtherance of the and sixty-eight government employees Comprehensive Reform Programme had received redundancy notices (crp). This program, endorsed by (QER, Dec 1998). A Transition Unit, the National Summit in June 1997, which aimed to support those receiv- is similar to many other structural ing redundancy notices and provide adjustment programs in the Pacific retraining, was established and came Islands region. Its features include to an end in 1999. redefining the public sector and mak- The most significant act to encour- ing it more efficient and accountable, age private sector growth was the political reviews • melanesia 523 Foreign Investment Act (no 15 of However, by the end of 1999 sup- 1998), which established the Foreign port for the Kalpokas government Investment Board, whose purpose is dwindled. In August four by-elections “to receive assess and approve project changed the balance of power. The proposals from foreign investors. This opposition, led by Mokin Stevens, will be organised purely at a technical began expressing concern with the level to fast track applications of for- Kalpokas government, largely because eign investors” (QER, Sept 1998). It it was “listening too much to foreign is made up of various government advisors” (pir, 29 Nov 1999). On 25 departments responsible for process- November Kalpokas resigned in order ing applications relating to foreign to avoid a vote of no-confidence. investment, and is essentially a “one- Barak Sope, leader of the Melanesian stop shop” for foreign investors to Progressive Party, was elected prime deal with. The taxation regime was minister and immediately announced also altered, with a value-added tax a government composed of his party, being introduced to Vanuatu. The the National United Party, the Union Value Added Tax Act (no 12 of 1998) of Moderate Parties, the Vanuatu introduced a tax of 12.5 percent on Republican Party, and the John Frum most goods and services and became ministers. The new cabinet includes effective from 1 August 1998. Most former prime ministers Serge Vohor import tariffs were reduced as a result and Maxime Carlot Korman, whose of the new value-added tax. bitter rivalry within the Union of While the Kalpokas government Moderate Parties in 1997 led to Kor- remained in power in 1999, the politi- man forming his own party in 1998 cal front remained steadily committed (pir, 30 Nov 1999). to the crp. The bulk of the political Preelection and immediate post- change instituted by Kalpokas’ gov- election comments about there being ernment was implemented in 1998, too many foreign advisors in Vanu- making 1999 seem quiet. Taxation atu, and questions about the value- revenue fell by 7.3 percent in the first added-tax scheme raised some doubt quarter of 1999 because of the intro- as to the future of the reform pro- duction of the value-added-tax system gram. In early December a petition and the reduction of import taxes, calling for the government to get rid and continued to be lower than pro- of the reform project, which had jected throughout the year (QER, gathered six thousand signatures, was March, June 1999). The revenue from presented to Parliament. The immedi- overseas grants was also significantly ate response by Sato Kilman, minister lower than had been projected. The in charge of the Comprehensive laws encouraging the private sector Reform Programme, was that the also seemed to affect the economy, petition was “an insult and an embar- with the level of foreign investment rassment, as the present Government being satisfactory in the first half of is committed to reforming this coun- 1999, sustaining levels of over 800 try” (TP, 8 Dec 1999).