Salwai prioritises revenue and instability curse

Charlot Salwai (Photo: ITU)

Charlot Salwai Tabimasmas is Vanuatu’s third prime minister to be elected in less than a year.

Salwai is no stranger to the driver’s seat. His last reign was from 2016 to 2020 when he managed to successfully steer the country out of all the political shenanigans that tested his captaincy — completing a four-year term in office for the first time in many years.

He has been returned to power in early October, following weeks of hyper-political activity – probably never seen in the history of Vanuatu. Yes, there have been political instabilities of the past, but not quite like what was witnessed since late August.

Prime Minister Salwai has two key priorities. Well aware of the shrinking revenue base, the prime minister is thinking ‘outside the box’, so to speak.

“There is no need to reinvent the wheels,” he says. “Port Vila and Luganville need to be extended to at least a kilometer or so,” he adds.

He is of the firm view an expansion of the city boundaries could be Vanuatu’s best shot at increasing the national revenue, without having to worry about many things. Such is his idea amidst an EU ban on the country’s visa waiver that has seriously impacted the revenue generated from the country’s once fledgling citizenship by investment programmes since 2022.

This is a leader who once tried to bring in the country’s first ever income tax in 2018/19 during his last term, but failed at the final hurdle to convince his Port Vila constituency MPs, and others who felt an income tax would be too much a burden for businesses to shoulder

A French-educated accountant by profession, Salwai is well aware of the perennial issues holding back Vanuatu economically.

“We are already building good infrastructures like roads and wharfs – here on Efate, Santo and in the islands…We should be attracting a fair share of foreign investors into our shores, but where are they ending up?”

The costs of doing business here is currently not attractive enough.

He knows that the country ranks poorly when it comes to business set ups. Not only does Vanuatu face stiff challenges from other Pacific neighbours, but its constant changes in government does not breathe confidence when it comes to policy making.

This puts off a lot of investors.

“If we can address some of the long-standing concerns, we could unleash the country’s future growth.

“We already have everything: our geographical location is excellent; we have a vibrant culture; beautiful scenery and friendly people.

“Of course, we have cyclones, but that is part of the experience,” he says with a smile. Cyclones are natural phenomenon that are out of his control but says if leaders can cooperate to fix conditions that are within their powers, Vanuatu has a real chance.

Port Vila is currently seated on 280 hectares of acquired Efate land, while Luganville is on 200 ha.

If the municipal boundaries were expanded, it would consequently create more opportunities for more investors to come in. In turn, the government would benefit directly from more taxes.

Such a policy would be especially suitable for an island like Santo where Luganville town is situated. With the expansions, potential investors don’t have to worry about obtaining new land leases, which could be tricky in this context, given the intricacies of the land tenure system.

Salwai acknowledges though that the current land leases Act also needs amending to increase the lease term up to 100 years, to provide that extra level of comfort.

But more than that. There is a need for the government to invest in key infrastructures beyond roads and bridges, he says. He argues one reason why utility costs here are so high is not so much the high cost of fuel. It’s to do with the investment private companies put into building the infrastructures and therefore have to recoup those investments.

He posits further that if the government can invest in building communication towers for example, then it can simply rent it out to telecom companies. This would have a huge impact on prices. The same goes for electricity.

Salwai says his second goal is to find lasting solutions to the country’s longstanding conundrum – the constant changes in government, to pave a better pathway forward and increase chances for longevity in office.

But he needs ‘political will’ from all the main players in Vanuatu politics.

Recently, he received a Vanua’aku Party (VP) delegation, to discuss possible ways forward, and to enlist their support for political reforms. VP are currently sitting on the opposite side of the house, but Salwai knows that as the founding party, they have a responsibility to play in resetting the country’s political compass 43 years on.

In fact, he says all major players have a moral duty to fix the current fluid nature of local politics. There are bills already before parliament which should address this once and for all. Amongst them is an integrity bill and a political parties’ registration bill. The later has implications for how political parties generate and receive funding. It will make it mandatory for political parties to declare funds they receive outside of the government system to keep them honest.

Vanuatu is one of the smallest democracies of the world. When there are no legal frameworks in place to keep rent-seekers at arm’s length, it can be quite a challenge for any leader to govern effectively.

Salwai worked with the founders starting out as the secretary of the Council of Ministers for five years in the early 1990s – people like Maxime Carlot Korman, Serge Vohor; or even Walter Lini, Edward Natapei and later on, Joe Natuman from the opposite end of the political spectrum.

He says once there was a certain level of respect and integrity that the former leaders and founders exuded whilst carrying out their national duties. There was an aura and a public decorum that denoted authority and demanded the highest respect for the office bearer. That is not there anymore. For him, it is concerning.

“I was sent together with James Bule (current MP for Ambae constituency) and Willie Lop in mid-2000 to Kokopo, Rabaul, in Papua New Guinea by then prime minister to attend one of the first political summits by PNG when they were starting out towards political reforms”, he recollects – probably to imply he has what it takes.

Salwai believes the Vanuatu public has seen enough of the constant bickering in parliament. Now is the time for lasting changes for the better. A man who was found guilty of perjury in 2020 (but later pardoned) under quite strange circumstances for ‘misleading the Council of Ministers’ when appointing Parliamentary Secretaries (PS) as a quick fix for instability, Salwai appears determined to end this curse – albeit this time in the right way.