Formerly called the New Hebrides, Vanuatu is a mecca for those who love diving. The waters surrounding these beautiful islands provide some of the most spectacular and varied underwater exploration in the South Pacific and experienced divers come from all over the world to swim amongst the WW2 wrecks which lie scattered over the seabed.

A tropical paradise, only three and a half hours from Sydney, Australia, Vanuatu means 'the land that has always existed'. It is made up of 83 islands formed in a Y-shaped archipelago which stretches over some 800 kilometres of the Pacific Ocean, half way between Australia and Hawaii.

Predominantly Melanesian, the people speak English, French and Bislama, a form of pidgin. The Ni Vanuatu have populated these islands for centuries and with more than 105 distinctly different cultures and languages still thriving, Vanuatu is recognised as one of the most culturally diverse countries in the world.

Vanuatu has been spared the unrest which has befallen neighbouring countries such as the Solomon Islands and Fiji, although the largest island, Espiritu Santo, experienced a brief insurrection in 1980.

Local traditions are still very strong. Women, for example, often have lower social standing than men and have fewer educational opportunities.

The economy has been unable to grow fast enough to meet the needs of Vanuatu's expanding population.

The main sources of revenue are agriculture and eco-tourism. Both depend on the weather, and when, as in 1999, cyclones and persistent rain hit Vanuatu, both suffer.

Tax revenue is derived from import duties, and neither personal income nor company profits are taxed.

Vanuatu tightened up its tax and regulatory systems after the Organisation for Economic Cooperation and Development warned that it could face sanctions if lax taxation regimes were exploited by criminals for money-laundering.

Australia, the country's main source of overseas aid, has pushed for good governance and economic reform in the islands.

Nationality: Noun and adjective--ni-Vanuatu.
Population (2005 est.): 206,000.
Annual growth rate (2003 est.): 2.7%.
Ethnic groups: 94% ni-Vanuatu; 4% European; 2% other Pacific Islanders, Asian.
Religion: Predominantly Christian.
Languages: Bislama (Pidgin), English, French, over 100 tribal languages.
Education: Enrollment in primary is 100% with rapid fall-off to 20% in secondary and upper secondary. Adult literacy rate (2005)--74% of those age 15 and older.
Health: Infant mortality rate (2005)--55.1/1,000. Life expectancy (2005)--62.5 yrs.
Work force (1999): 134,000. Agriculture--65%. Industry--5%. Service--30%.

Type: Parliamentary democracy.
Independence: July 30, 1980.
Constitution: July 30, 1980.
Branches: Executive--president (head of state), prime minister (head of government). Legislative--unicameral (52-member parliament). Judicial--Supreme Court.
Administrative subdivisions: 6 administrative districts.
Political parties: Vanua'aku Pati, Union of Moderate Parties, Melanesian Progressive Party, National United Party, People's Democratic Party, John Frum.
Suffrage: Universal over 18.
National holiday: July 30.

GDP (2003): $281 million.
Per capita income (2003): $1,180.
Real growth rate (2000): 1.6%.
Avg. inflation rate (2002): 2%.
Natural resources: Forests, agricultural land, marine resources.
Agriculture: Products--copra, cocoa, coffee, cattle, timber.
Industry: Types--copra production, beef processing, sawmilling, tourism, financial services.
Trade (2003): Exports--$92 million: cocoa, beef and veal, copra, timber, kava, coffee. Major markets--India 31.9%, Thailand 27.5%, South Korea 10.2%, Indonesia 6.1%, Australia 4.6%, Japan 4.1%, Germany 1.4%, United States 1.2%. Imports--$136 million: machines and transport equipment, foodstuffs, fuel, basic manufactures, chemicals, miscellaneous manufactures. Major suppliers--Australia 22.9%, Singapore 12.1%, New Zealand 9.9%, Fiji 7.4%, France 5.8%, India 5.5%, Japan 3.1%, U.S. 1.1%.
Official exchange rate (2003 avg.): 122 vatu=U.S.$1.

The population of Vanuatu is 94% indigenous Melanesian. About 30,000 live in the capital, Port Vila. Another 10,700 live in Luganville (or Santo Town) on Espiritu Santo. The remainder live in rural areas. Approximately 2,000 ni-Vanuatu live and work in New Caledonia. Although local pidgin, called Bislama, is the national language, English and French also are official languages. Indigenous Melanesians speak 105 local languages.

Christianity has had a profound influence on ni-Vanuatu society, and an estimated 90% of the population is affiliated with one of the Christian denominations. The largest denominations are Presbyterian, Roman Catholic, and Anglican. John Frum, a syncretic sect, also is important on Tanna Island.

The prehistory of Vanuatu is obscure; archaeological evidence supports the commonly held theory that peoples speaking Austronesian languages first came to the islands some 4,000 years ago. Pottery fragments have been found dating back to 1300-1100 B.C.

The first island in the Vanuatu group discovered by Europeans was Espiritu Santo, when in 1606 the Portuguese explorer, Pedro Fernandez De Quiros, spied what he thought was a southern continent. Europeans did not return until 1768, when Louis Antoine de Bougainville rediscovered the islands. In 1774, Captain Cook named the islands the New Hebrides, a name that lasted until independence.

In 1825, trader Peter Dillon's discovery of sandalwood on the island of Erromango began a rush that ended in 1830 after a clash between immigrant Polynesian workers and indigenous Melanesians. During the 1860s, planters in Australia, Fiji, New Caledonia, and the Samoa Islands, in need of laborers, encouraged a long-term indentured labor trade called "blackbirding." At the height of the labor trade, more than one-half the adult male population of several of the Islands worked abroad. Fragmentary evidence indicates that the current population of Vanuatu is greatly reduced compared to pre-contact times.

It was at this time that missionaries, both Catholic and Protestant, arrived on the islands. Settlers also came, looking for land on which to establish cotton plantations. When international cotton prices collapsed, they switched to coffee, cocoa, bananas, and, most successfully, coconuts. Initially, British subjects from Australia made up the majority, but the establishment of the Caledonian Company of the New Hebrides in 1882 soon tipped the balance in favor of French subjects. By the turn of the century, the French outnumbered the British two to one.

The jumbling of French and British interests in the islands brought petitions for one or another of the two powers to annex the territory. In 1906, however, France and the United Kingdom agreed to administer the islands jointly. Called the British-French Condominium, it was a unique form of government, with separate governmental systems that came together only in a joint court. Melanesians were barred from acquiring the citizenship of either power.

Challenges to this form of government began in the early 1940s. The arrival of Americans during World War II, with their informal demeanor and relative wealth, was instrumental in the rise of nationalism in the islands. The belief in a mythical messianic figure named John Frum was the basis for an indigenous cargo cult (a movement attempting to obtain industrial goods through magic) promising Melanesian deliverance. Today, John Frum is both a religion and a political party with a member in Parliament.

The first political party was established in the early 1970s and originally was called the New Hebrides National Party. One of the founders was Father Walter Lini, who later became Prime Minister. Renamed the Vanua'aku Pati in 1974, the party pushed for independence; in 1980, the Republic of Vanuatu was created.