Renowned Caribbean economist and financial strategist, Ms. Marla Dukharan, has urged Vanuatu and other small island states to address long-standing financial transparency and accountability challenges to foster economic stability.
Speaking during a TokBak show on VBTC, Ms. Dukharan shared her expert insights on the importance of stable governance and effective fiscal management in building resilient financial systems for small island nations.
Ms. Dukharan’s discussion focused on several critical areas, starting with the effects of political instability on financial governance. She highlighted how frequent changes in leadership, with Vanuatu’s average government tenure being only six months, undermine long-term financial reforms. “Political instability prevents the continuity needed for strong financial governance,” she explained. “Without long-term vision and commitment, small island states struggle to make the necessary structural changes.”
Another key point in her discussion was Vanuatu’s ongoing challenges with international financial relations. Dukharan pointed out that the country’s inclusion on the European Union’s tax and money laundering blacklist has made it difficult for Vanuatu to maintain banking ties with international institutions. This has led to an increase in cash-based transactions, which are harder to track and more susceptible to illicit flows. “Being blacklisted affects not only Vanuatu’s global credibility but also its financial systems, pushing transactions into opaque channels,” she noted.
Ms. Dukharan also emphasized the detrimental effect of nepotism in public sector appointments. She warned that political connections often dictate public appointments, leading to inefficiency and a lack of transparency. “Public sector jobs must be filled based on merit, not political affiliation,” she stressed. “This is critical for ensuring public trust and accountability.”
To address these issues, Ms. Dukharan called for the establishment of an independent anti-corruption body within Vanuatu’s government. “An independent unit, free from political interference, can carry out investigations into financial misconduct and ensure greater accountability,” she said. “This is essential for building a more transparent system.”
In her concluding remarks, Ms. Dukharan stressed the importance of adopting stronger fiscal management frameworks, including a sovereign wealth fund, to ensure Vanuatu’s financial security in the long run. She praised the nation’s low debt-to-GDP ratio but cautioned that the absence of clearer fiscal rules and strong oversight could jeopardize future stability.
“Small island nations like Vanuatu must adopt a sustainable, diversified financial strategy, and this requires transparency, accountability, and political commitment,” she concluded.
Ms. Dukharan’s recommendations provide a roadmap for Vanuatu and other small island states to improve their financial systems and better prepare for the challenges of a rapidly changing global economy.
