ADB Calls For Immediate Government Action

Andrew Fanasia Jr. 
National Express Sub Editor's Desk 

Immediate Government action is needed to ramp up good governance and private sector development reform activities to boost sustainable economic growth in the country. 

According to the Asian Development Bank (ADB) new Solomon Islands Economic Report 2010, Solomon Islands is now facing great challenges due to the adverse impacts from the global economic crisis in 2009 and its dangerously overexploited natural forests. 

Jointly funded by ADB and the Australian Government, and based on the request by and discussions with the Solomon Islands Government, the 2010 report outlines the state of Solomon Islands economy. It is stated that, after several years of steady economic growth prior to 2009, Solomon Islands GDP growth remains flat. 

In the previous reports by the Central Bank of Solomon Islands Governor Mr. Denton Rarawa our economy has also been hit hard by the global financial crisis, plus the continuous declining of logging activities. 

As a result the revenue growth has fallen sharply and almost a quarter of our population lives below the national basic needs poverty line. According to Dr. John Roughan, founder of Solomon Islands Development Trust and Political commentator, “Solomon Islands is still below the poverty line.” The ABD report said external assistance is required to help relieve these fiscal pressures. 

Major donor partners including Australia, New Zealand, ABD and European Commission have provided or providing additional budget support to help expenditure on essential services. Meanwhile, Regional Director of ADB in Australia, Eugenue Zhukov in a press statement said that, Grant-funded infrastructure will need to play a key role in supporting growth and employment, given the decline in exports and the need to reduce government expenditure. 

The economic report recommends that Infrastructure projects be brought forward where possible, to support economic growth. The report however points out that in the short term the Solomon Islands government’s policy mix should include recurrent expenditure restraints and prudent monetary policy. 

National Express understands that in a previous interview with the Solomon Islands Caretaker Deputy Prime Minister and the Interim leader of the People’s Congress Party (PCP) Mr. Fred Fono said that his political party prioritize infrastructure should they come into power after the national general election next month. “PCP will be seriously considering public-private sector partnership to totally commercialize infrastructure development in Solomon Islands,” Mr. Fono said when he address the local media on Sunday last week in Honiara. 

The ABD report however affirmed that Solomon Islands remain a high-cost, challenging place to conduct business in and many constraints to private sector development exist in our country. According to ADB statement from Manila Philippines, new Government comes into power after the national general election next month needs to take action to; improve infrastructure through contracting out and greater use of public-private partnerships; open the telecommunications market to competition; reform state-owned enterprises; simplify the licensing and tax systems; and strengthen land reforms.