The World Bank has announced a $30 million grant to aid Vanuatu's recovery following a 7.3 magnitude earthquake in December. The funding will provide $20 million for immediate reconstruction and response efforts, with an additional $10 million set aside for future disasters or health emergencies. This support also aims to enhance fiscal stability, governance, transparency, and long-term resilience planning.
Vanuatu’s Caretaker Minister for Finance and Economic Management, Hon. Johnny Koanapo, expressed gratitude for the assistance: “We are grateful for the World Bank’s swift response and ongoing partnership. This assistance will provide much-needed resources to help us recover from the recent earthquake and strengthen our ability to face future challenges. These funds are vital to protecting the people of Vanuatu and supporting development.”
This latest grant follows an earlier disbursement of $12 million in emergency funding shortly after the December 17 earthquake that hit Port Vila. The quick financing allowed Vanuatu to address immediate recovery needs effectively.
The World Bank conducted a Global Rapid Post-Disaster Damage Estimation (GRADE), assessing direct economic damage to physical assets at approximately $197 million, which is about 17% of Vanuatu’s 2023 GDP. The report also indicated that over 2,150 people might be pushed into poverty due to the disaster.
Annette Leith, World Bank Resident Representative in Vanuatu, stated: “These grants, alongside our initial emergency financing and rapid assessments of damage, will help strengthen fiscal stability and bolster Vanuatu’s resilience against future shocks. We will continue to work with the government to ensure the country is best equipped to protect its people and economy.”
In the long term, this aid from the International Development Association (IDA) aims to secure fiscal stability by improving governance processes and enhancing Vanuatu’s capacity for disaster preparedness and response. It also supports measures under Vanuatu’s Disaster Risk Management Act to improve institutional frameworks during emergencies and expand disaster resilience financing options.
As one of the world's smallest and most climate-vulnerable nations, Vanuatu faces significant challenges from frequent tropical cyclones, earthquakes, and economic shocks. The need for strong fiscal and disaster management systems is crucial for its continued development.