Vanuatu - a string of more than 80 islands once known as the New Hebrides - achieved independence from France and Britain in 1980.
Most of the islands are inhabited; some have active volcanoes.
Vanuatu is mountainous and much of it is covered with tropical rainforests. Like most of the area, it is prone to earthquakes and tidal waves. Most of the people live in rural areas and practise subsistence agriculture.
Vanuatu has been spared the unrest which has befallen neighbouring countries such as the Solomon Islands and Fiji, although the largest island, Espiritu Santo, experienced a brief insurrection in 1980.
Local traditions are strong. Women, for example, generally have lower social standing than men and have fewer educational opportunities.
Despite strong growth, the economy has struggled to meet the needs of Vanuatu's expanding population.
The main sources of revenue are agriculture and eco-tourism. Both depend on the weather, and when, as in 1999, cyclones and persistent rain hit Vanuatu, both suffer.
Tax revenue is derived from import duties, and neither personal income nor company profits are taxed.
Vanuatu tightened up its tax and regulatory systems after the Organisation for Economic Cooperation and Development warned that it could face sanctions if lax taxation regimes were exploited by criminals for money-laundering.
Australia, a key donor, has pushed for good governance and economic reform in the islands.
* Full name: Republic of Vanuatu
* Population: 245,800 (UN, 2010)
* Capital: Port-Vila
* Area: 12,190 sq km (4,707 sq miles)
* Major languages: Bislama, French, English
* Major religion: Christianity
* Life expectancy: 70 years (men), 74 years (women) (UN)
* Monetary unit: 1 vatu = 100 centimes
* Main exports: Copra, timber, beef, cocoa
* GNI per capita: US $2,760 (World Bank, 2010)
* Internet domain: .vu
* International dialling code: +678
President: Iolu Abil
Iolu Abil was chosen as president by Vanuatu's electoral college - comprising the 52 members of parliament and the heads of the six provincial governments - in September 2009.
He served as a cabinet minister in the first Vanuatu government after the country gained independence in 1980.
He succeeded Kalkot Mataskelekele when his five-year term in office expired.
Prime minister: Sato Kilman
Parliament chose Sato Kilman as prime minister in June 2011 after six months of constitutional confusion. He had first been chosen as prime minister in December, but a legal challenge found that he had not been elected by secret ballot as prescribed in the constitution.
Mr Kilman and his People's Progressive Party have moved in and out of government since 2004, in keeping with the fluid nature of Vanuatu politics.
From : BBC News