Promoting investment needs more accurate country profile in 2020
The Solomon Islands Ministry of Commerce, Industry, Labour and Immigration website tells how the Solomon Islands Government is seeking new ways of ensuring long term economic stability in the country.
“ One of the areas being looked at by the Government is the facilitation and encouragement of activities and investments that lead to economic and development growth. In this regard, it is placing high importance on private sector investment and development as part of its priority to achieve self reliance, economic independence and sustainability. Invest Solomons believes that in view of this policy, the government sees foreign investment participation in the development of Solomon Islands as an important tool to achieve this aim. Solomon Islands is endowed with abundant natural resources that offer unique investment opportunities with diversified investment potentials in several areas. Foreign Investors who have the capacity and resources to utilize these investment opportunities and potentials are welcomed by the Government of Solomon Islands to engage in productive economic activities that will both benefit the investor and the citizens of Solomon Islands.”
Despite describing the potential for investment at home, the global perspective for business development in the Solomon Islands remains somewhat negative and I believe needs to change.
To give an example of what I mean in terms of remaining negative perceptions, the Solomon Island’s profile on Adam Smith International reads:
“Despite its substantial economic potential, the Solomon Islands remains one of the poorest countries in the Pacific. High operating costs, high transportation costs, low export volumes as compared to the region/world, land rights issues and low human resource capacity hamper the Solomon Islands’ efforts to promote domestic and international investment.”
I recall in March 2018, according to the UN News Centre, Solomon Islands, Kiribati, Bhutan and Sao Tome and Principe had increased national earning power and improved access to health care and education, making them eligible to exit the group of least developed countries.
I have not heard whether that change from a least developed country for the Solomon Islands has been officially declared by the United Nations.
As much as infrastructure and development is still awaited at home it is fair to say the Australian government has done much working together with Solomon Islands to enhance economic growth and development in Solomon Islands. Australian assistance continues to support infrastructure programs essential for business and trade, including efficient and reliable access to transport and energy.
As was announced during the Australian Prime Minister Morrison’s visit to Solomon Islands in June 2019, Australia would establish a bilateral infrastructure program, worth up to $250 million in grant financing over 10 years.
The Solomon Islands Growth Program is the flagship for Australian support to increase private sector investment in a more inclusive economy. Its aims being to catalyse private sector investment and increase opportunities for inclusive growth by targeting industries with the highest potential.
For example, the two largest activities under the SIGP are the $17 million investment (2017-2019) in the Tina River Hydropower Development Project (Tina River Hydro) and the $14 million investment (2017-2020) in the Strongim Bisnis facility.
Work is already underway on the Tina River Hydro, led by the Solomon Islands Government and the World Bank, and it is intended to become Solomon Islands’ largest public-private partnership. The dam and power station could meet around two thirds of Honiara’s forecast energy needs, significantly reducing Solomon Islands’ dependence on diesel power and addressing a major constraint to business (expensive and unreliable electricity).
I am not an economics strategist and one more accustomed viewing country profiles to determine information on key environmental risks to health.
Country profiles in general, however provide a summary of information that are usually important deciding factors on the strength of the economy and the country’s capacity for business and investment.
From a customer point of view, I would say a country profile is the model account whose characteristics indicate there would be significant value in investment for the individual investor or company.
Given what one reads of the Solomon Islands as outlined in the Adam Smith International profile I have quoted, clearly the information is dated, needs to be re-assessed in the light of past and ongoing development changes and a more favourable picture given of Solomon Islands being ‘Open for Business.’
A situation which has not been lost on the Papua New Guinea Prime Minister who in the last few days visited Honiara to pursue trade matters for the benefit of both countries.