Kastom Ekonomi
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Journal Article Review of Rousseau, B., & Taylor, J. P. (2012). Kastom Ekonomi and the Subject of Self-Reliance.

Greg Watt, Lucas Watt, Roxane de Waegh

This week we discussed Rousseau and Taylor’s (2012) article Kastom Ekonomi and the Subject of Self-Reliance. This is a particularly pertinent topic to discuss during the COVID-19 pandemic. Oceanic communities disconnected to the rest of the world due to border shut downs have been turning to the kastom ekonomi to get by. For many (although certainly not all), this turn to the kastom ekonomi has been positively experienced as relational systems of sharing and reliance have been reinvigorated. As a result, Pacific scholars, have been commenting that the COVID-19 context has given a rare opportunity rethink how Pacific economies operate. Specifically they have asked whether kastom ekonomi provides an avenue to shed dependency on developed nations and the fickle global economy. Rousseau and Taylor (2012), although nearly a decade old, provides a basis for thinking about the elevation of kastom ekonomi, its obstacles, and its (im)practicalities.

In relation to this article, Greg Watt explores the rise the ni-Vanuatu kastom ekonomi movement in regional and global context. Lucas Watt explores how cash economy can be incorporated into the kastom ekonomi in ways that continue to uphold the values and doctrines of Oceanic life. Roxane de Waegh analyses how aid donors and international governance institutions are forcing traditional societies to adopt incompatible foreign economic systems. She argues the penetration of these foreign economic systems leaves traditional societies unable to access fundamental health and education services, as well as leaves them less able to recover from external shocks like COVID-19 and cyclones.

Kastom Ekonomi and Glocalisation: A History of Missed Opportunity – Greg Watt

Rousseau and Taylor’s article (2012) provides a history of the Kastom Ekonomi movement that developed in Vanuatu and situates it in the greater political, economic and social contexts from that time. The authors refer to the “Self-Reliance and Sustainability” (Rousseau B. & Taylor J.P., 2012, p. 170) movement that was born out of the 2005 National Summit, and what was later coined as Kastom Ekonomi championed by Ralph Regenvanu, the then director of the Vanuatu Cultural Centre (VCC) and presently the leader of the opposition in Vanuatu’s parliament.

The notion of Kastom Ekonomi had its earliest beginnings in 1992, with the idea of setting up a ‘pig bank’ to stimulate the use of traditional customs and means of exchange. In many ways, this can be viewed as a reaction to what was perceived as coercion to adopt a westernised economy and its associated monetary system. Resentment of structural adjustment programs and macroeconomic stabilisation introduced by development institutions effectively devalued traditional ways of living and social systems resulting in cultural disenfranchisement and revanchism. Comparable movements had been identified much earlier (May, 1975) in Papua New Guinea and described as a form of micronationalism whereby communities sought to:

Disengage from the wider economic and political systems imposed by colonial rule, seeking in a sense a common identity and purpose, and through some combination of traditional and modern values and organisational forms, an acceptable formula for their own development (May, 2004, p. 48).

Papua New Guinea obtained its independence in 1975, some five years earlier than Vanuatu, and its society had been struggling with the social cohesion between tradition and modernity for some years. The later advent occurring in Vanuatu has been due to what was touted as the promise, enchantment and “magic of modernity” (Patterson & Macintyre, 2011, p. 3) including capitalism which relied on “the notion of the secular, rationalist modern” that was in contrast to the “already-enchanted worlds of the exotic Other”(Patterson & Macintyre, 2011, p. 2). The single most significant impact as far as the Ni-Vanuatu population was concerned was the introduction of monetisation, with little thought given about how money was to be obtained by the local population. Rousseau and Taylor note that Vanuatu had “the lowest formal sector employment in the Pacific region” and employment amongst youth in Port Vila is “well over 50%” (Rousseau B. & Taylor J.P., 2012, p. 174). Formal employment enabling Ni-Vanuatu to earn cash was scarce. Abbot (2007) aptly sums up the unfolding marginalisation of Ni-Vanuatu:   

The result of this monetisation is that now even families in the most remote rural or outer island villages have to find cash for everyday needs, be it for school fees, utilities, newly essential store goods, social obligations, or church donations. Where social obligations could once have been met with woven mats, traditional food, or other home-produced items, now there is an ever increasing need to make cash or purchased contributions (Abbott, 2007, p. 68).

The Self-Reliance and Sustainability movement was hosted by the Malvatumauri National Council of Chiefs (MNCC), the VCC and the Vanuatu Credit Union League. It is important to note that here, self-reliance refers to the national, rather than an individual situation. The 2005 Summit culminated in the “Vanuatu National Self Reliance Strategy 2020”  (National Summit for Self Reliance and Sustainability, 2005). The strategy includes extensive political, economic and social objectives that would serve to transform Vanuatu away from a neo-liberal pathway and insert kastom practices in its place. However, Rousseau and Taylor (2012) do not appear to clarify the notions contained in the comprehensive call for a reversal of the Vanuatu way of life. A total of 32 objectives were published, with the first four setting out provisions for sweeping reform of Vanuatu governance, strengthening the role of the MNCC within governance, redefining core values of government, and reforming all aspects of the Constitution. Of the remaining objectives, fifteen assert kastom perspectives over land use and ownership, resource management, educational curriculum, VIPA business approvals, right down to the development of national identity and cultural expressions. This leaves thirteen objectives surrounding economic considerations. The objectives of Self-reliance and Sustainability are truly transformational, and had they been launched into governance, they would have set in motion an exemplar pathway for many developing nations globally. What is surprising is that the government of the day, under Prime Minister Ham Lini, brother to Vanuatu’s inspirational first Prime Minister, Father Walter Lini, declared 2007 and 2008 as years of the Traditional Economy. Despite this, the praxis of executing these objectives against the staunch opposition that must have come from developmental institutions such as the Asian Development Bank would always have required intense fortitude. Not only that, national politicians would have been fearful of the MNCC, who they would have seen as usurping the power base of the Westminster system installed by the departing colonial leaders before independence.

In reflection, perhaps an opportunity has been missed by Vanuatu politicians to create a truly hybrid economy that works through a process of ongoing negotiation between internal and external forces. Its failure to gain traction would likely have been associated with strong assertions (from external actors) that Self-reliance and Sustainability measures wouldnot, in fact, bring together local and globalised economies in an idealised glocalised hybrid. Instead, it was contended that the formal economy would continue to forge ahead, leaving those engaged in the informal economy behind. A spectre was presented, with projections forecasting that expatriates would primarily benefit from any economic growth, income differentials between urban and rural areas would increase, along with increases in urbanisation and its associated social problems (Cox M. et al., 2007). The fallacy of the argument lies with the fact that today, under principles of modernity, that is precisely where Vanuatu finds itself. The objectives of Self-reliance and Sustainability have since weakened and now operate more as “generalised descriptors, indicative of an ethos as much as a concrete structure for action”  Rousseau and Taylor (Rousseau B. & Taylor J.P., 2012, p. 171). The moment of opportunity had passed by.

What was left congealed into what is known as Kastom Ekonomi , meritorious in its own right, and perhaps more achievable against the insistence of developmental institutional philosophy. Also, based on a traditional way of life, Kastom Ekonomi seeks to incorporate traditional means of exchange, where this is possible. Ralph Regenvanu, ever elegant in his delivery, emerged as the champion of the kastom way of life. Stripped of much of its political baggage, Regenvanu was able to unpack what Kastom Ekonomi sought to achieve. His reasoning surrounded the fact that the “great majority of people (roughly 80% ) live in rural areas” (Rousseau B. & Taylor J.P., 2012, p. 172) and already spent most of their lives engaged within the informal economy. Further, he argued that the remaining 20% of urbanites also “participate in and rely on the traditional economy to a significant degree”(Rousseau B. & Taylor J.P., 2012, p. 173). For the latter, livelihoods surrounded a dualist economy (Cox M. et al., 2007), where formal and informal processes ran parallel to each other, each providing benefits, but neither crossing over into the other sphere. The objectives of Kastom Ekonomi sought to revalue, and privilege traditional activity and to bring that value into the formal sphere. Regenvanu recast eight of the original thirty-two objectives of the Self-reliance and Sustainability movement centring on those aspects that would “maintain and revitalise living traditional cultural practices while stimulating the generation of cash income” (Regenvanu & Geismar, 2011, p. 32). The Kastom Ekonomi pathway would involve three processes; fostering the production of traditional wealth; encouraging those involved in the cash economy to access traditional valuables; and finally, advancing the exchange of cash and traditional wealth. The latter is particularly of interest as it seeks to facilitate:

The exchange of cash and traditional wealth items between the informal and formal economic sectors, both to generate income for people involved in the traditional sphere of economic life and to encourage the revival of traditional practices amongst those primarily involved in the cash economy. (Regenvanu & Geismar, 2011, p. 32).

While the notion is simple in an idealistic fashion, its execution proved to be much more complex. For example, the payment of school fees through the exchange of local food production required a logistical sophistication not available in rural areas. Payment co-operatives would need to be created that required administration, transportation and planning capabilities. Further, teachers and resources still needed cash payment as their work did not involve traditional work. Ultimately it was unclear how the interaction of formal and informal spheres would integrate in a smooth and efficient manner. The production of goods and services would require considerably more steps, be more time consuming and likely cost more (regardless of the means of payment).

Perhaps, as a final note, it is worth commenting on the perspectives of many Ni-Vanuatu. While the majority continue to live within the informal economy using traditional means, they are fully aware of the outside world. Global events, ways of living, and commodities are communicated through mobile technologies and the internet. Most aspire to participate within this global way of living, own goods generated from the outside, and partake in services only available in a modern world. It is unworkable to keep the status quo when the enchantment and magic of modernity are communicated daily. For Kastom Ekonomi to work, such luxury goods would need to be prohibited as their purchase could only be achieved in the formal cash society. As a consequence, Kastom Ekonomi faltered, and has latterly manifested itself as a reinforcement of a traditional way of life, but one that continues to exist alongside an increasingly important formal economy. It exists merely as a perspective rather than through any binding legislation.

The Integration of the Cash and Kastom Ekonomi – Lucas Watt

When Ralph Regenvanu, director of the Vanuatu National Cultural Council, defined what kastom ekonomi is in his Newspaper article “Kastom Ekonomi, What is it?” in 2007, he did so in very oppositional terms to the forms of economic development in the globalized economy. His article called for a move towards greater self reliance away from neo-liberal forms of development that create relationships of dependence and subordination to the developed world. He claimed that by drawing upon ni-Vanuatu economic resources, production methods, and cultural structures of distribution and reciprocity, that these unequal relationships can be broken. In this article, Regenvanu presents foreign forms of development as obstacles to achieving economic independence in Vanuatu.

The traditional economy (“kastom ekonomi” in Bislama) refers to the way in which our indigenous ni-Vanuatu societies are organised to look after the concerns and resources of their members. This is in contrast to the way the “Western”, “capitalist” or “cash” economy organizes itself to look after the concerns and resources of its members (Regenvanu, 2007).

Despite the potential for kastom ekonomi to rectify some of the structural economic issues in Oceania in line with local ways that are attentive to local well-being; I am particularly drawn to Rousseau and Taylor’s (2012) argument that we should also avoid the “evaluative dualism” that pits kastom ekonomi in pure opposition to economic development or modernity. Rousseau and Taylor (2012) consider how ni-Vanuatu society can incorporate foreign knowledge, structures, and materiality, in line with local forms of knowledge in ways that can facilitate a distinctly ni-Vanuatu form of “modernity”.

Rousseau and Taylor’s (2012) argument made me think specifically about how the cash economy can be incorporated into, rather than shunned, by the conceptualization of kastom ekonomi. Much of the the literature highlights how cash is difficult to incorporate into gift economies because of its commoditised nature. Much of this same literature acknowledges its use is an imperfect but sometimes necessary substitute for other traditional products (Hulkenberg, 2015; Keck & Schieder, 2015) . While this literature is important to highlight, I am more interested in the literature that analyses the processes and circumstances where cash acquires characteristics that allow it to shed its commoditised nature to become intertwined with local ekonomi (see Toren, 1989; Pickles, 2013). I have personally observed some of these processes. I have observed how cash has become progressively socialized as its flows through kinship networks, partitioned between a collection of peoples, sent across large geographic distances, and intertwined with other banal exchanges. What follows is an anecdotal example of these processes.

Fiji families are often given permissions to access the bank accounts of other family members who work overseas. I observed specifically that the salaries of male ex-military personnel working as private security guards in the Middle East were often able to be accessed by kin in Fiji. In particular, wives who remained in Fiji, withdrew money from their husband’s account via the ATM and distributed some of that money to their husband’s kin as directed by their husband’s parents. I observed that much of this income was distributed among husband’s kin for the purpose of travel to and from their home islands and urban locations. Husband’s kin had a decisive say in how that money would be distributed. For wives arriving back in the informal settlement with what was left of their husband’s income; some of it was appropriated through requests by their own urban based family members.

This appropriated money was often used for the purchase of urban goods such as clothing. A large proportion of these urban goods were then transported to kin on rural islands. Transport of these urban goods sometimes required inventive methods such as delivery via horseback to rural villages away from island ferry piers (see picture below). Upon delivering these urban goods to rural islands, rural goods such as mangoes and pigs were offered in return for transport back to informal settlements (see banner picture). Pigs in particular were sold to other kin in the informal settlement at very low token prices when they were needed for a local funeral. Childcare offered to the wives of ex-military personnel was implicitly given for their incorporation into this cycle of transactions. In these protracted, geographically spread, but invariably banal exchanges, I do not see innate commodity type transactions but rather a progressive socialization of cash through its partition, flow through social networks, and incorporation into the everyday, in ways that allows it to progressively become more and more part of a distinctly Oceanic relational ekonomi, (for more context see; Watt, 2019)

Kastom Ekonomi

I am not under the illusion that commodity cash exchange is absent in Oceania, or that the necessity of cash for certain needs such as school fees is not problematic; however, I do think the informal settlement is a particularly unique place where the cash and kastom ekonomi are integrated in ways that elevate local forms of value and ways of doing things in ways that are absent in other parts of urban or formal Oceanic economies. The semi-rural nature of informal settlements provide an environment where both cash and traditional products as well as norms of their exchange meet but not clash. Not all of these exchanges I detailed occurred in the informal settlement specifically, however, the informal settlement was always a key central reference point in the exchange chain. It was the location where the commoditised nature of cash was diluted in ways that allowed it, and its material byproducts, to have the characteristics that allowed it to be incorporated into non commoditised exchange further down the chain. Without the informal settlement as a central node, the cash received would not have been progressively socialized in quite the same way, and thus not integrated into local ekonomi with the same breadth. As a result I believe nurturing more environments where cash and kastom ekonomi can interface with one another is the key to further elevating, not denigrating, the doctrines of kastom ekonomi in Oceanic nations.

By avoiding the types of “evaluative dualism” that Rousseau and Taylor (2012) warn against, and thus being attentive to possible opportunities for supposedly incompatible knowledge systems, such as cash and traditional economy, to come together; a way for Oceanic peoples to encompass modernity in a progressive but truly Oceanic way become possible.

The Influence of Foreign Aid in Traditional Societies – Roxane de Waegh

Rousseau and Taylor (2012) discuss the inherent complexities found within the dichotomous debate between traditional wealth and progressive modernity. They place this debate in the small island state of Vanuatu, or more specifically, an indigenous ni-Vanuatu society. In this context, the reader learns about a certain type of traditional economy referred to as Kastom ekonomi. In its inception, the terminology used to define kastom ekonomi described a type of political economy, which called for ‘’complete governance reform’’ (Rousseau and Taylor, 2012). However, as the political ideology evolved and increased in popularity, it also increased in complexity and confusion. Ralph Regenvanu (2007) addressed this confusion in an article called ‘’Katsom Ekonomi, What Is It?’’, which shifted the terminology away from a political discourse and towards a social economy. There are plenty of other variations and definitions that have occurred since the first appearance of the katsom ekonomi in 1992. Simply explained, the term refers to a traditional economy in which indigenous societies are organized to look after the concerns of their members (Rousseau and Taylor, 2012).

Projects that fall under the katsom ekonomi focus on themes of self-reliance and sustainability. The idea is to promote and encourage the use of traditional knowledge and local resources, such as launching numerous projects to reinvigorate the production of particular items for cultural materials, foods and crops; replanting coconut plantations for the production of biofuel; promoting the research and use of local medicines; and reinvigorating historical environmental resources management techniques. The logic used to support this social-political economy is quite simple – far more people in Vanuatu participate in the traditional economy then in the western ‘’capitalistic’ ’or ‘’cash’’ economy, with roughly 80% of the population living in rural areas, satisfying most of their food and other requirements using traditional forms of land, sea and resource utilization on their customary land (Rousseau and Taylor, 2012). The highly fertile volcanic soils of Vanuatu means that rural areas are rich in varied subsistence lifestyles, growing taro, yam, manioc, chickens, cattle, pig herds etc. In fact, the cash economy that exists in Vanuatu is not even for local consumption– with over 70% of the cash economy products dedicated to the export market. This includes copra, timber, beef and kava production.

If more people in Vanuatu participated in the cash economy, fueled by globalised development industries, then it would be logical to consider a transition into modernization. However, the reality is that the traditional economy is by far the most important and predominant economy in the country (Rouseau and Taylor, 2012). Thus, a question that bears asking is: why the sudden pressure to modernize, and where is this pressure coming from?

This is where the discussion becomes interesting, and the sudden appearance of overseas development aid (ODA) comes to the forefront of the debate. The United Nations (UN) have defined Vanuatu as a Least Developed Country, based on the fact that the great majority of the population uses a miniscule amount of cash – cash, which is a Westernised measure of development, progress, and economy. However, what the UN fails to recognise is that Vanuatu’s labour force, efforts, and investments are directed towards sustaining a traditional economy, with perhaps different measures of wellbeing, progress and ‘’development’’. Nevertheless, once considered a Least Developed Country, the flood gates of foreign aid have opened, and individual western economic powers decide how and where they are going to ‘’contribute’’ to the development of this impoverished island nation.

The UN sets a ‘’Priority Action Agenda’’, which forms the basis of government and donor decisions regarding the implementation of development projects. Contrasts are built and conceptual divisions are actualized based on the different economic motivations underlying individual aid donor focuses. The EU, for example, elects to focus on the private sector and bolster employment. New Zealand rationalized its seasonal labour scheme as a means of creating a remittance economy, thus increasing cash flow into rural areas. Consequentially, foreign aid is infiltrating the ni-Vanuatu society from every angle – rural, urban, private, and government. They have managed to insert a cash economy within a society that had to need for it, no purpose for it, and no real value associated with it. What is even more shockingly disturbing is that the global forces have found a way to tie the cash economy to the fundamental social pillars of society – education and health. Even if you had no intentions, motivations, or aspirations to join the cash economy, at some point you will be forced to enter this world just to send your children to school or to receive adequate health care for your family. It is appalling to realise the lack of overseas development aid that is directed to build a robust education and health care system for the countries they claim to support.

The confusion is not within religion, or whether or not we should go back to pre-European katsom lifestyles. The confusion is within the incentives and economic motivations that underline the foreign aid sector. What is their role in accelerating modernization so that it meets their own Priority Action Agenda? What is their role in times of crisis, such as a global pandemic or natural disaster? In 2020, Vanuatu witnessed the social, political, and economic disruptions of COVID-19 in addition to the environmental and climate-induced disaster of cyclone Harrold. What is the role and contribution of foreign aid during these on-going disruptions? Perhaps traditional wealth, knowledge and practices are better suited to solve local challenges, desires, and needs.

Images by Lucas Watt

TransOcean is a European Research Council (ERC) Starting Grant project 

The project is funded by the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 802223


Abbott, D. F. (2007). Poverty and Pro-poor Policies for Pacific Island Countries. Asia-Pacific Population Journal, 22(3), 59-74.

Cox M., Alatoa H., Kenni L., Naupa A., Rawlings G., Soni N., & Vatu C. (2007). The Unfinished State Drivers of Change in Vanuatu. Canberra: AusAid.

Hulkenberg, J. (2015). The Cost of Being Fijian in the United Kingdom. Anthropological Forum, 25(2), 148-166.

Keck, V., & Schieder, D. (2015). Contradictions and complexities—current perspectives on Pacific Islander mobilities. Anthropological Forum, 25(2).

May, R. J. (1975). The Micronationalists. New Guinea, 10(1), 38-53.

May, R. J. (2004). State and society in Papua New Guinea : the first twenty-five years (New edition. ed.): Australian National University E Press.

National Summit for Self Reliance and Sustainability. (2005). Vanuatu National Self Reliance Strategy 2020 Symposium conducted at the meeting of the National Summit for Self Reliance and Sustainability

Patterson, M., & Macintyre, M. (2011). Capitalism, Cosmology and Globalisation in the Pacific. In M. Patterson & M. Macintyre (Eds.), Managing Modernity In The Western Pacific (First edition. ed.): University of Queensland Press.

Pickles, A. J. (2013). Pocket calculator: a humdrum ‘obviator’in Papua New Guinea?. Journal of the Royal Anthropological Institute, 19(3), 510-526.

Regenvanu, R., & Geismar, H. (2011). Re-Imagining The Economy In Vanuatu – An Interview With Ralph Regenvanu. In E. Hviding & K. M. Rio (Eds.), Made In Oceania : Social Movements, Cultural Heritage And The State In The Pacific.: Sean Kingston Publishing.

Rousseau B., & Taylor J.P. (2012). Kastom Ekonomi and the subject of self-reliance: Differentiating development  in Vanuatu. In S. Venkatesan & T. Yarrow (Eds.), Differentiating Development : Beyond an Anthropology of Critique. New York, NY, UNITED STATES: Berghahn Books.

Toren, C. (1989). Drinking cash: the purification of money through ceremonial exchange in Fiji. Money and the Morality of Exchange, 142-164.

Watt, L. (2019). Urban Vakavanua: Reconciling Tradition and Urban Development (Doctoral dissertation, RMIT University).


  • I am a Post-Doctoral researcher on the ERC-funded TransOcean Project at the Chr. Michelsen Institute (CMI), Norway. My portion of the project sets out to analyze maritime mobilities, exchange, and conservation, in the increasingly securitised region of Oceania. I graduated with a PhD from the School of Media and Communications at the Royal Melbourne Institute of Technology (RMIT) University. My ethnographic fieldwork in Suva Fiji analyses how rural-urban migrants living in “informal settlements” articulate tradition in urban spaces.

  • Greg Watt is an advocate for authenticity in tourism and travel. Greg has previously lived in Papua New Guinea, has had an involvement with tourism in Vanuatu for the past thirteen years and presently has a close association with a community-based tourism project on Tanna Island (seven years). Greg is a doctoral candidate at Auckland University of Technology, and his Master’s thesis was titled "A Pro-Poor Tourism Case Study: Efate Island, Vanuatu" which looks at ways that poor Ni-Vanuatu can benefit through tourism. For a more detailed look at Greg’s involvement within development and tourism have a look at his blog articles which can be found at https://watt.nz.

  • My name is Roxane de Waegh and I am a PhD student at the Faculty of Culture and Society at Auckland University of Technology, New Zealand. I am originally from Belgium, but grew up a bit all over the world, including Congo, Senegal, Singapore, Chile, Argentina, Japan, USA, and Canada. The ocean, the concept of remoteness, and the complexity of connectivity have always fascinated me. After working as a marine biologist for nearly 6 years with various environmental NGOs in remote coastal communities, including Myanmar, Solomon Islands, and Timor-Leste, I have come back to the academic world, hoping to deepen my understanding of the intrinsic paradoxical nature of integrated conservation and development projects (ICDPs) in marginalised coastal communities.

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