The mass evacuation of Ambae Island due to the unstable Manaro Volcano is expected to have a ripple effect on Vanuatu's economy at a time when the government is looking to make major changes to bring in more revenue.
The Salwai Government is likely to impose income tax after the Council of Ministers adopted a controversial report from its Revenue Review Committee.
World Bank economist Kim Edwards says it's hard to predict exactly what effect the Ambae Island crisis will have on Vanuatu's economy and the government's grand plans.
“It’s a bit difficult to tell at this stage. I know the government has its own people on the ground monitoring the effect of the evacuation and what responses might be needed,” Edwards told Pacific Beat.
“In general you can get mixed impacts after disasters. You can get impact on productivity, quite apart from the significant effect on people’s livelihood off course and social dislocation. But that can be offset by inflows of aid and any kind of recovery and reconstruction requirements that are required. So I think it’s a little bit early to tell.”