Reserve Bank of Vanuatu

Vanuatu made me feel ignorant to the extreme every time it was mentioned on the news. I couldn't decide if Vanuatu was a moon of Venus, or the very special village where Vishnu grew up, or something else entirely. Mind you, Vanuatu is a collection of smallish islands in the Pacific Ocean, grouped together for administrative purposes by England and France. Too insignificant to make them worth fighting over, the islands were administered jointly by both colonial powers. Click on the link and read all about Vanuatu in Wikipedia.

However (this is the salacious part), Vanuatu was also shared as a tax heaven. This tax heaven industry was the reason Vanuatu kept appearing on the news. But it is all in the past. Vanuatu has been thoroughly out-classed and out-competed by the likes of the City of London and Ireland and Luxembourg and the American state of Delaware. 

As a matter of fact, I very strongly suspect (this is the conspiracy part) that Vanuatu and other far flung places were used as decoys by the "tax avoiding/tax evasion/financial secrecy" industry to distract local government agencies and the easily distracted local public. All while happily peddling tax evasion schemes at home. What's so essential about tropical islands when it comes to bank accounts? Is there a special coconut ink that becomes invisible when the tax man shows up?

Nowadays, Vanuatu is a proper little country, member of the OECD (Organization for Economic Cooperation and Development, I think) and all that. Brave the oceans to get to Vanuatu if you fancy some fresh coconuts, but to hide your excess cash, well, most likely your own country offers "personal banking" and "wealth management" and "financial planning", all in plush downtown offices with their own latte machines. Just be careful not to walk with your stash of cash into your local tax agency offices by mistake.

But while I was looking at Vanuatu, I couldn't help but notice their Central Bank. Or more properly, their Reserve Bank. Yes, it was a "Central Bank" to begin with, but at some point and for some reason it was changed into a "Reserve Bank". What is the difference? Anyway, the Reserve Bank of Vanuatu publishes numbers we can all ogle at. Those numbers are in "Vatu", which is worth about as much as the Japanese Yen (about 100 to 1 US Dollar), so I will just move the decimal point two places to the left and that should give us a rough but more easily digestible approximation. Ready?

Here we go: As of early March, 2021, The Reserve Bank of Vanuatu claims approximately 642 million USD of Narrow Money (M1), and Money Supply (M2) of about 958 million USD. There are 444 million USD of Domestic Credit, and about 600 million US Dollars of Private Sector Credit. Basic numbers to warm my heart, and for economists to run some basic models.

Looking around the bank web site, you can download forms to bid for Vanuatu bonds, in terms from 7 days to about 3 months, and face values in multiples of about 10,000 US Dollars. Terms and conditions are also available, so you could plan to make some investments to spice your next South Pacific vacation.

So not quite billions in Vanuatu, but money is money, and Big Money Gazer will take whatever he can get. And enjoy the view.

But what really looks cool in Vanuatu is the Tangbunia Bank, a bank that deals in traditional forms of wealth like shells and pig teeth.  Unfortunately, all I have available to link to is the Wikipedia article, according to which 

"Accounts at the bank are reckoned in livatu, a unit equivalent to the value of one fully curved boar's tusk".

There! Convert your wealth to "fully curved boar's tusks", deposit that in Tangbunia Bank, and dare your national tax authority to try and collect taxes. Perhaps Vanuatu can still function as a fully impregnable tax heaven, if a bit exotic.