SI Development Updates

Geopolitical lessons from another small Pacific island nation?

2011-07-29T01:45:00.000+11:00

While seemingly off topic for Solomon Islands, this posting about NZ and its status with the US has some import for Solomon Islands and its search for useful influence in the complex and changing geopolitical scene.

Last week, NZ PM John Key travelled to the US and spent a half hour with President Obama, half of what was originally planned. Jonathan Milne, a NZ journalist travelling with Key filed an insightful report reflecting on the trip and the place of NZ in US imaginations and policy. What caught my eye was the section where he recounts the response of a key White House staffer:

Then, when White House spokesman Jay Carney was asked about Key's visit, he seemed somewhat at a loss. "New Zealand is a very important partner and ally," Carney said, seemingly stalling for time. "The President looks forward to the meeting. But you'll have to - I'll have to get back to you on more specifics."The fact is, there's a foreign leader or two visiting the White House every week. Obama and his advisers can't be expected to be all over the specifics of every small Pacific island nation.

It is not unusual for the NZ press to refer to the country as a Pacific country, but this is the first time I have seen it described as a "small Pacific island nation". As a citizen of one of Solomon Islands one of the Pacific's most denigrated states, it is a notable, and somewhat sobering realisation that the "big boys" of the region are absolute minnows in world matters.

But in the Solomons, we knew already that we were the littlest of the little.

No, the possible lesson for SI comes a little further in the article, where Milne describes the effect of the thaw between NZ and the US relations in recent years. This has only occurred after the Kiwi government's famous stance against permitting US navel ships to enter its waters. The US has chosen not to send ships to New Zealand since the 1987 nuclear-free law banning nuclear-powered or -armed vessels. Now, with NZ contributions to Afghanistan since 2002, and a gradual resumption of intelligence and military training relations, NZ seems to be in a more favourable position with the US, than ever since the late 80s. This re-found closeness may not be all it seems, points out Milne:

The truth is, New Zealand may be less relevant to America than ever before. Sure, the US will negotiate the Trans-Pacific Trade Partnership with us. Sure, they'll send a troop of marines out to pay their respects.
But, perversely, the 25-year nuclear ships stand-off gave New Zealand a relevance that no longer exists now that we're an "important partner and ally" again.
In the 1980s, amid all the big challenges of the Cold War and a nuclear clock ticking towards midnight, New Zealand was a small problem to the US. Now, we're no problem at all.

Perhaps being a little bit of trouble to the great powers is better than being completely pliant.

This calls to mind the infamous Jeannette Diana affair in 1984, when much to the chagrin of the US, Solomon Islands confiscated the US tuna seiner Jeannette Diana, and arrested the captain*. Costly sanctions were applied to Solomon Islands tuna exports, but this together with Solomon Islands courting of Soviet fishing offers, forced the US back to the Pacific regional tuna negotiation table, when up to that point it had refused to countenance a regional deal.

As always these things need weighing up, but given the recent flat refusal by Australia, of PM Phillip's overtures about an Australian refugee processing center in the Western Province security presence, perhaps Solomon Islands has become too harmless for her own good.

If we are mosquitoes apt to be trampled on anyway, perhaps a little bite or two is the least we can do for ourselves?

*U.S. WILL RESUME PACIFIC FISH TALKS, by BARBARA CROSSETTE, Special to the New York Times. New York Times [New York, N.Y] 12 Oct 1986: .7.

Time to recolour RAMSI?

2011-07-15T00:49:00.001+11:00

With clear indications that RAMSI is already somewhat reduced, there are appearing a range of different positions of what its future would look like.

NZ's Foreign Affairs Minister McCully has made a clear call: a new emphasis on development. Australia has been a little more guarded with both Stephen Smith (once Foreign Minister, now Defence Minister) and Richard Marles (Parliamentary Secretary for Pacific Islands Affairs) toeing the same line in media reports to ABC and Radio Australia respectively: this is a period of transition.

In his interview, Marles emphasised that development work was always part of RAMSI's work, but also that policing remained key. When asked whether development emphasis meant a reduction in policing emphasis, he demurred:

Oh no, I wouldn't say that. I think the policing role is very important and that was acknowledged yesterday and I actually think the role that has been played with the Royal Solomon Islands police force is incredibly important and that is going to be an ongoing role and I think that will persist for as long as any of the elements of RAMSI. So policing still remains a very important part of the RAMSI mission and will continue to do so for sometime. But I think it is right to focus on development as well and development within the country and within the capacity of the government, but also very much within the police force itself.

Clearly when facing a public relations "selling" exercise, politicians cannot be expected to admit trade-offs, so we can look forward to a continuation of this sort of rhetoric contending a sort of "concentration on everything".

But for development actors and private investors wanting a clear picture of the actual distribution of emphasis, we need a more objective measure of relative focus, preferably one which is comparable over time. We propose one that measures RAMSI in workforce terms: green, blue and white collar groups.

Green collar - the military component which was in strongest evidence early on in RAMSI. This is what is now down to 80 (mainly reservists) from Australia, 43 NZDF personnel from NZ and an unspecified number from the other 13 RAMSI participating countries.

Blue collar - the policing component which originally were conceived as "leading" the RAMSI effort in 2003 to restore law and order. This is currently at 250 from the RAMSI participating countries according to their website.

White collar - the development component consisting of technical advisors and consultants working in government ministries and in more traditional aid/development roles.

Obviously tasks like strengthening the SI police will probably involve both white- and blue- collar workforces of RAMSI, but for monitoring purposes perhaps it would be simpler to assign annual spend levels and staffing allocations to one of the three colour-labels to get a clear view of what emphasis RAMSI has in the future, especially when compared to the past.

Reactivation of SIDU

2011-07-15T00:08:00.000+11:00

Hi everyone,

Firstly our apologies to any followers of this blog who might have missed us over the past 2 years.

Secondly, we are back!

And thirdly, the format of this blog will be much more variable than in the past - all a part of keeping things current and fresh!

Gud tumas,

SIDU

Solomons food security facing a fork in the road

2008-06-16T02:11:00.006+11:00

With food prices soaring over the past few months, concerns have been growing about the importance of food security policy.

The government's slashing of rice tarrifs in February this year was intended to combat the rising cost of this imported staple. Any gains from this measure were promptly wiped out by rapid and continuing rises in the price of imported rice; more than 20% in the month of May alone and much higher than that outside of Honiara.

Two approaches are being proposed, both focusing on domestic production to substitute for imported rice. One calls for local rice growing; the other on a return to traditional crops such as kumara and taro.

Local rice growing
Official policy has been the former for many years. Supported by ROC funding, the National Rice Project has aimed to develop smallholder rice farming across the country. It has not been successful - according to the CBSI 2007 Annual report (slow link):

The National Rice Project (NRP), with assistance from the Republic of China (ROC) Taiwan, has been responsible for coordinating the task of encouraging local farmers to participate in this industry. However, NRP reported that production in 2007 fell by 14% to 2,800 tons, from 3,250 tons in 2006. Most of the harvested rice was consumed by producers, though small surplus amounts were sold domestically between $5 and $7 per kilo.

These difficulties existed even prior to the current oil price shock, which has driven fertiliser prices up. Whether the above production figures could be maintained without aid support ie paying market rates for fertiliser, equipment and other inputs, is unclear.

Improvement of traditional crops
The other approach, one championed by Kastom Gaden Association focuses on the crops that have and continue to provide food for the majority of Solomon Islanders. Rough (and very conservative) calculations for 2004 indicate that kumara and other root crops consumed by Solomon Islanders was the equivalent of 125,000 tonnes of rice. This does not include wasted crops or that fed to animals. By comparison, the average annual rice import volume for the same period 2004 was just under 23,ooo tonnes - about 20% of the root crop supply.

This approach has now been picked up by the wider public - in a recent editorial Solomon Star urged a head on stance:

Let’s be realistic. We have to accept the fact the prices of rice are beyond our control. And as long as we rely on imported rice, we will remain at the mercy of overseas growers. Grow our own rice? That’s one obvious solution...But the initiative seems not to be gaining ground. There were numerous examples that showed people were only interested in the undertaking during the initial stages.

Policy response hindered by capacity?
Official policy rhetoric appears unchanged with the Minister for Environment pushing the local rice line:

“We have to look for alternatives,” he said. One of the alternatives he suggested was for locals to go into rice farming. Mr Lilo said growing rice would help combat the effects of the rising prices of food in Solomon Islands today especially rice. He said there are provisions of $5million under the 2008 Budget for rice growing.

2 months ago, a former policy boss in the agriculture sector, Dr Israel Wore, attacked the continued domestic rice focus as a short term evasion of the fundamental issue:

If we do not now commence addressing the declining crop yields now experienced in many parts of the country, then, may the good Lord help us, we are in for a dependency on more food imports and more NCD’s as well as more limb amputations tomorrow. Latest figures from our health experts should be calling for a holistic approach to the prevention of NCD’s.

Consensus of this sort on the "local crop" option has been unprecedented; past perception has matched the government vision of cash cropping as the face and future of agriculture. With a building case for rapid investment in local crops, will policy be able to respond?

The EC-World Bank ARDS* report (large pdf) spells out the difficulties in this task:

The Ministry of Agriculture and Livestock is at present a largely ineffective organization...Effective management mechanisms are lacking. Field operations have with some exceptions (donor projects) been mostly unfunded. Programs and budgets are determined by the availability of donor funding and not guided by a clear sector policy. ..little attention has been given to succession planning and and recruitment of young, qualified staff.

The ARDS has begun to be implemented this year through the EC-World Bank Rural Development Program, but with rocketing costs of living, households and gardeners may not be able to wait for it to start taking effect.

*Agriculture and Rural Development Strategy

Australia launches big programme on Pacific land

2008-06-15T08:13:00.010+11:00

A large new Australian government program on land in the Pacific was announced late last week.

The Australian Parliamentary secretary for development aid, Bob Mcmullan announced last Friday a Pacific Land Program worth AUD54million over 4 years, with $6.5million committed for 2008-9.

The MP will launch a new AusAID report Making Land Work, at a conference in Vanuatu this weekend by the same name.

According to MP McMullan, the new program will be guided by two principles:

Mr McMullan said Australian assistance will be guided by two fundamental principles: first, Australia will only support reforms that recognise the continuing importance of customary tenure; and, second, land policy reform must be driven by Pacific island governments and communities, not by donors.

Solomon Islands will be among the first countries to receive attention from the program:

The program will initially provide support to Papua New Guinea, Vanuatu, Solomon Islands and Timor-Leste. Assistance will also be provided on a regional level for education and training and to help countries respond to problems associated with growing urbanisation such as squatter settlements.

The new report includes three case studies from Solomon Islands:

All three examples relate to pivotal situations for the country.

Auluta is currently the only large resource development project underway on Malaita, and is widely hoped to provide employment opportunities for Malaitan on Malaita - a key issue across many sectors for all recent governments.

Land administration strengthening is crucial to reducing corruption and illegal business activities in towns, particularly Honiara. With prominent business people and politicians implicated in many shady land deals, the stakes for land reform are especially high.

Finally, urban land use, settlement and propriety remain critical to the long term viability of Honiara and peace on Guadalcanal - an issue of documented grievance for Guadalcanal people since independence in 1978.

A donor role in assisting with these will require a new level of understanding and sensitivity. The stated intention of avoiding "donor drive" will be fundamental to this.

Logs drive record growth in 2007 - but not for much longer

2008-05-16T16:06:00.005+11:00

According to the CBSI Annual Report was launched for the year 2007, double digit growth occurred in 2007, on the back of log exports.

Solomon Times reports

The Solomon Islands economy has performed exceedingly well in 2007 with a record estimated economic growth rate of 10.3%. The Governor of Central Bank, Rick Hou, described the rate as the highest in two decades, and, driven largely by a spurt in logging providing a large part of this growth.

While logging has been pushing foreign cash through the economy at a record rate, what is not clear is the opportunity cost for the country in terms of future forest productivity. Healthy forests have subsidised the rural majority forever - by maintaining soil productivity, clean-running rivers and productive reefs. With these free services depleted, who will pay to replace them, and how much will it cost?

With logging set to collapse after 2010 - a year Hou has called "make or break", we will soon find out.

All this does beg the question - is "logging growth" really growth, or once-off cashflow from a nation-wide liquidation?

Undersea minerals - new prospecting in SI waters

2008-05-15T13:42:00.012+11:00

Solomon Islands is part of the next great mining rush - taking place under the sea.

A Canadian-listed company called Nautilus Minerals (NMO) has acquired exploration and prospecting rights to an area of the SI EEZ roughly southwest of New Georgia. These areas form part of what the company calls its "Solwara" projects, spanning seafloor areas in the PNG, Tongan and SI EEZs. The Solwara project has a number of different fields (Solwara 1- 8) and aims to exploit seafloor sediments called SMS deposits, which are rich in gold, silver, copper and zinc.

The "Solwara" project areas (click to enlarge)

Seafloor massive sulphide (SMS) deposits are a class of minerals deposits at the centre of a new mining industry focusing on the seafloor. They are formed during a process called hydrothermal circulation, in which seawater enters deep cracks in the earth's crust below the seafloor. The water is superheated and returns to the ocean via undewater volcanic vents called black smokers. The water carries with it considerable deposits of minerals which are
then deposited on the ocean floor. These deposits are found anywhere from a few metres to more than a kilometer under the sea surface.

And they exist in SI EEZ waters.

According to Nautilus sources, they have been granted more than 10 thousand square kilometers of tenements by the SI govenrment. Whether these tenements have exploration, prospecting or mining rights attached is not immediately clear:

As of November 14, 2007 Nautilus had been granted 14 tenements covering 10,641 km2 in the Exclusive Economic Zone of the Solomon Islands, continuing the Company's tenement holding in the highly prospective Woodlark Basin to the east of PNG. The licences granted in the Solomon Islands are an extension of our highly prospective Woodlark Basin tenements to the east of PNG. All of the Solomon Island licences are 100% owned by Nautilus

The tenements stretch for a considerable distance south and southwest from the Western Province islands of Ranonnga, Rendova and New Georgia.

Given a national mining scene that is heating up all over the place and significant economic pressures forecast, this development is sure to attract the attention of a lot of people - economic planners and the Western provincial government especially. Also with, some of the tenements abutting the shoreline of Rendova, customary landowners may begin taking a new interest in reef and coastal rights.

Back to the future: labour mobility as a national strategy for SI?

2008-05-10T23:12:00.005+11:00

Is SI set to re-enter the international labour mobility scene in big way, almost a century after it left?

The Sikua government has made its intentions clear since launching its policy document:

“My government will continue to explore the concept or issue of labour mobility. “The economic benefits of seasonal workers schemes on our economy through remittances and new skills from returning workers are quite significant,” he said. Dr Sikua said his task will be to negotiate with some of his allies to push this policy forward. “We will pursue seasonal workers scheme with a number of countries including New Zealand, Australia, Taiwan, Canada and Scandinavian countries,” he said.

With Solomon Islanders already participating in NZ's RSE scheme, and with recent training programmes aimed at preparing health caregivers for work in Canada, attention is now turning towards the biggest potential labour market in the region: Australia.

PM Sikua has made headlines with news of a "deadline" for Australia's answer to the question over seasonal labour from SI. According to the Melbourne Age:

The Solomon Islands is expecting Canberra to have an answer by August on whether it will allow Pacific workers into Australia.

The Australian government has in the recent past been quite opposed to the possibility, but Rudd's administration may be softening to it, especially if the results from NZ's RSE scheme are positive.

From a historical perspective, this is in some senses nothing new - in the late 19th and early 20th century thousands of Solomon Islanders were put to work clearing land and building the foundations of the Australian sugar industry.

This, the so-called blackbirding trade or period had a profound impact on Solomon Islands history, as part of a larger pattern of labour appopriation and through the habits and attitudes introduced to the country by returnees. A major church in modern SI, the SSEC, was originally formed as a branch of the Queensland Kanaka Mission, a missionary organisation targetting the blackbirded labourers.

This makes even more fascinating one rationale put forward by PM Sikua for a new agricultural labour scheme to Australia:

Dr Sikua believes it could also help unite a nation divided by ethnic tensions.

He used the concept of wantok - people who come from the same village or speak the same language.

"You know when they come to Australia they will all call themselves wantoks. They will all call themselves Solomon Islanders," Dr Sikua said.

"I think that will bring in a kind of advantage to helping us break down some of the barriers we have as well as other tensions that exist between our people."

Some of the building blocks (good and bad) of the modern SI were cast through the labout trade more than 100 years ago. Will the future path of Solomons Islands, as in the past, be shaped in the agricultural fields of Australia?

Movement on reopening the largest copra estate

2008-05-02T07:36:00.001+11:00

High world prices for coconut oil have helped copra (and cocoa) make a "record breaking" contribution to the economy in 2007. According to the General Manager of the national export and marketing authority,

...over 19-thousand tonnes of copra and more than four-thousand tonnes of cocoa were produced and exported. ..He says this is an impressive 45 percent increase in the export value earned in 2006.

These high prices and search for large scale export projects may have prompted this week's action to revoke the work permit of the manager of country's largest copra plantation, RIPEL:

In Solomon Islands the long drawn out dispute over the Russell Islands Plantation Limited issue has resulted in the Managing Director of RIPEL, John Whiteside, being declared persona non grata by the government.

According to government, Mr Whiteside was an obstacle to negotiations to restart operations, which were halted in 2004 by industrial action.

Mr Whiteside has been considered a obstacle by government to resolving the industrial dispute case between the company and the workers resulting in thousands of workers being without pay for years.

At its peak, RIPEL employed more than 1000 workers and was the leading producer of copra in the country. A return to production has been a priority for successive governments since closure in 2004, with the current government making specific emphasis on reopening in its 2008 platform document.

Data, capacity and integration key issues for MDGs in Solomons

2008-05-01T01:00:00.006+11:00

In the recent ESCAP/ADB/UNDP report on the MDGs progress in the Asia-Pacific region, A-Future-Within-Reach-2008, the summary given for the Pacific Islands region paints a grim picture:

Of the five subregions of ESCAP, the success of Pacific Island Developing Countries (PIDCs) in implementing the MDGs has been less impressive. There has been some progress and the subregion has already met some targets... ...However, the subregion has yet to make progress on the other 17 MDG targets.

The PIDCs may eventually achieve some of the other goals, but only after 2015, as current progress is slow or slipping into reverse. It should also be pointed out that for some targets it is difficult to track progress because of a lack of data. (Box 1.2 p 12)

Data
Solomon Islands appears to fit squarely with these findings. Of the 21 indicators tracked in the report, SI data is only reported for 11. By this measure, progress in Solomon Islands cannot even be measured for almost 50% of these MDG targets.

Those indicators for which data is missing include:

Percentage of children under 5 who are underweight
Percentage of primary age childern enroled in primary school, percentage reaching grade 5, percentage completing primary school
Percentage of rural and urban people with access to an "improved water source"

While SI's the small and highly dispersed population makes data collection difficult, poor systems for data capture and harmonisation are also at fault, and most significantly, there is a need for relevant and usable local 'translations' of the MDG concepts:

PIDCs will also need to improve data collection and monitoring, and establish regular reporting systems, following standard formats – though some MDG indicators such as the proportion of the population below $1 per day need to be defined in the context of the PIDCs to make them more meaningful and relevant. (emphasis mine)

Forests
Also of concern is the fact that SI is actually regressing on MDG target 7 : Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources. This is because a key indicator for this target, Indicator 7.1 'forest cover', is being reduced at a rate that is accelerating, not slowing (MDG Update 2, p33).

The loss of rainforests through logging is especially significant to a country with large subsistence rural sector such as Solomons. In justifying this indicator for human development, FAO forestry experts underscored the significance of forests for reducing poverty:

The livelihoods of the approximately 240 million of the world’s poor that live in forested areas of developing countries depend on the protection and, in many cases, the rehabilitation of these forests. ...Widely recognized environmental functions of forests include mitigating climate change, conserving biological diversity, maintaining clean and reliable water resources, sustaining and enhancing land productivity, protecting coastal and marine resources and enhancing urban environments.

Capacity and integration
A Future Within Reach also pointed out that limitations to capacity and integration in the Pacific subregion were responsible for lack of progress on the MDGs:

Another key constraint is the shortage of capacity for management and implementation. ...The PIDCs will need to find better ways of integrating the MDGs in national sustainable development strategies. This will mean, for example, costing MDG activities, including both financial and human resource contributions, and incorporating these into national budgets.

While the report blames the situation to "a lack of will and skills", the sheer scale of administrative effort involved with reporting and monitoring may also be a factor.

The UNESCAP secretariat which was partially responsible for producing the A Future Within Reach report comprises more than 600 staff; this number rivals the male population of Niue (2006 est. 802) or the total number of secondary school teachers in Solomon Islands (1999 est. 650).

The Pacific Islands as a group are the smallest and least populous countries on the planet, and the effort to maintain adequate records may in some cases encroach significantly on the capacity available to maintain services. Is there a limit to the practicality of MDG monitoring for very small states, or is some fresh thinking needed around the issue? Or perhaps, both?

Food price rises increase poverty pressure

2008-04-30T06:27:00.004+11:00

High world food and oil prices have hit Honiara food prices very hard, with one recent report noting a 20% rise in just one month, of the retail rice prices:

In less then a month the price of food has jumped quite significantly, a 20 kilo bag of rice now cost SBD$138, up from SBD$115, the price for a loaf of bread is now SBD$7, up from SBD$5.50, a small packet of sugar, which was then SBD$5.00, is now SBD$6.00.

This despite the government's recent budget announcement abolishing import duty on rice and current announcement by the Finance Minister of further cuts on other items:

"...the reduction in import duty will only apply to essential household and food items. The consumers will be the biggest winners the purchasing power of a dollar should increase with this reduction"

These increases will be sure to impact the urban poor which have gotten recent attention in Solomon Star through the story of a single mother and her daughter living on the street:

A young woman and her little daughter scavenging on the streets for bottles and cans and sleeping in the market? This is not the image we are known for...

Helping each other and being there for each other is the heart of the wantok system.
One wouldn’t allow his or her relative to live on the streets. It is just not in our culture for this to happen.

When we read the story about Dianne it portrays a different picture of our country. It indicates a breakdown of the family unit which we proudly treasure.

While urban poverty has been longstanding in the obvious form of families living in Honiara dump, this new presence of street living means the developing international food situation is likely to impact very visibly on Honiara.

Increasing attention to logging corruption

2008-04-25T08:05:00.011+11:00

Logging has long been been recognised as central to the corruption problem in SI, but recent reports have again put the spotlight on this connection.

Solomon Star this week highlighted the association in an editorial "We CAN do something about logging problems". The editorial pointed out the potential role of RAMSI in curbing the devastating industry, but also raised the difficulties RAMSI might be facing in doing so, given that so many national politicians are involved in the industry.

RAMSI also has the ability to address issues like the avoidance of taxes and payments, and the whole murky world of questionable pricing mechanisms.

You have to wonder why RAMSI hasn’t been asked for more direct help to bring logging, legal and illegal, and all the problems associated with it under better control.

You have to wonder. Is this because too many of our people in positions of influence are benefiting from their ties with the loggers?

This same involvement was the concern of Transparency Solomon Islands (national chapter of the international corruption NGO Transparency International) in its most recent media release In their release on setting log prices, TSI drew attention to significant problems surrounding government revenue capture from the logging industry:

...there are well-authenticated stories circulating in Honiara that the government is losing SBD$1m to SBD $2m a week in revenue because the price on which export duty is paid on logs is too low-and that this has been going on for several years, losing hundreds of millions of dollars that should have gone into improving government services.

TSI's main concern was regarding the setting of the "determined price" for exported logs. The SIG government sets a determined price for all exported logs, and uses this price to calculate export duties. This is to avoid the risks of relying on self-reported "free-on-board" export prices, which exporters have an incentive to understate.:

"There are several reasons why an exporter may falsely declare a low fob price. First, to reduce the amount of export duty he has to pay. Second, to reduce the income he appears to be earning in Solomon Islands, to avoid paying business income tax to the government (he can arrange to receive some of the payment overseas by selling the logs to a related company for an artificially low price-this is called transfer pricing). And third, to reduce the amount of money he has to share with whoever contracted him to cut and export the logs-the so-called landowners and the middleman or agent who put the deal together."

TSI's concern was that the Minister of Finance is involved in this process, an exercise that should be purely "purely technical". The scope for conflicts of interest, and corrupt influence, are obvious, especially given previous findings about logging in the country. The recently released report on illegal logging in Australasia by the Australian Institute of Criminology noted how revenue dropped in the Solomons even while volumes more than doubled:

In 2005, approximately 1.2 million cubic metres of timber were harvested in the Solomon Islands, up from 550,000 cubic metres in 2002. At the same time, government revenue from the logging industry and contributions from logging to the overall economy fell (Burrow 2006: 2).... There are also ample reports about widespread corruption in the Solomon Islands’ logging industry and allegations about large Malaysian logging companies exercising influence by paying bribes instead of taxes (Greenpeace 2004: 16; Stark & Cheung 2006: 37). It has been estimated that logging companies failed to pay $30m in taxes in 2004, up from $10m in 2003 (Burrow 2006: 2).

This is consistent with national findings within the SI government itself. In his 2007 report to Parliament, summarising the overall findings of 10 special audits he had carried out over 2005 and 2006 the SI Auditor General noted a total of almost SBD50 million in lost revenue in the period he assessed:

Department of Forestry, Environment and Conservation ($48.7m) - Many serious shortcomings were noted in the procedures and practices as well as deficiencies in internal controls were identified. There is no doubt that the poor management and administration, compounded by the lack of accountability and transparency of granting timber exemptions, has resulted in a significant amount of export duty being forgone which otherwise should not have been exempted... ....These factors as well as poor supervision, non-compliance with the Public Finance and Audit Act, Financial Instructions and General Orders, breakdown in the procedures and practices and major deficiencies in internal controls, contributed to the fact that royalty payments due to the Government were not fully captured. These deficiencies have left the Department of Forestry, Environment and Conservation open to fraud and corruption.

With only a few years left for the supply of logs, it is imperative for more benefit to be extracted from the resource, with an improvement in revenue collection just the beginning.

Malaita diamond explorations

2008-04-23T04:30:00.004+11:00

With the disappearance of SI forests, the search for alternative resources for exploitation is speeding up.

Most recent has been the focus on diamond exploration on Malaita. This week, Cabinet was briefed on the possibilities of microdiamond presence on Malaita by Prof. Ken Collerson of the University of Queensland.

According to Solomon Times Online, earlier this week he

"...told Government he was optimistic about the presence of diamond and other minerals because of his earlier finding about the presence of micro diamond in rocks obtained from Malaita."

Prof Collerson first raised this possibility in a 2000 Science article on the discovery of garnet minerals amongst surface rocks in the northern part of Malaita. While the geological significance of this discovery lay in the transport of very deep rocks (normally 400-670km under ground) to the surface very rapidly (ie in only 2-3 days), for Malaitans the significance was a potential mining industry.

Some 8 years later, the time for further exploration may have come. The current Minister for Mines and Energy, Edward Huniehu, has called for urgent aerial survey of the island.

In his statements to the media, Huniehu also quoted Collerson as indicating that:

...[he] believes Malaita has the geological potential to be a Greenfield exploration target for diamond, nickel, platinum group metal and gold.

Any such mineral discoveries on Malaita would help the government overcome two pressing development challenges:

the need for export earnings as logs run out (currently projected for 2010)
the need for large resource projects on Malaita to reduce interisland migration pressures and urban drift

Huniehu also announced the imminent engagement of an exploration group.

He said a Brisbane-based company, Geodiscovery Group, Prof Collerson and a co-consultant will work closely on the survey which should begin in August and would last six weeks.

$400 million for SI health over next 5 years

2008-04-22T06:48:00.004+11:00

A major MOU for health service development has just been signed in Honiara. According to Solomon Times Online:

The agreement signed between the Ministry of Health, Australia's government through its Embassy in Honiara, the World Health Organization and the UNICEF last Friday sees a total fund of SBD$400 million being committed to the nation's health over a spread of five years.

The package is part of a "Health Sector Support Program" which sees multidonor support directed behind a National Health Strategic Plan, aimed at getting SI to the Millenium Development Goals which have a 2015 deadline.

Last year, Solomon Islands topped the Pacific in WHO national health rankings, largely due to the level of access. The new plan and funding should contribute to keeping up this progress.

New ADB Strategy 2020 launched: Focus on inclusive growth

2008-04-09T18:30:00.007+11:00

ADB has launched a new long term strategy. Called "ADB Strategy 2020" it sets out a common strategic framework and vision for the whole organisation.

The key focus remain poverty reduction, but with a strong emphasis on three areas:

Inclusive growth - Current and past economic growth has not benefited the most poverty-tricken people in the region. Strategy 2020 aims to make sure that the benefits of economic growth are felt by the poorest and most vulnerable in ADB's Developing Member Countries (DMCs).
Environmentally sustainable growth - the Strategy 2020 document makes an important point:
Only growth that is environmentally sustainable can eliminate poverty, since many of the poor depend on natural resources for their livelihoods.
Growth therefore must be environmentally sustainable, and the Strategy emphasises the use of knowledge and technologies to improve environmental safeguards and management.
Regional cooperation and integration - ADB calls this RCI, and Strategy 2020 aims to scale up RCI approaches to open up opportunities in
...achieving closer policy coordination and collaboration in support of regional and global public goods, including work to combat climate change and HIV/AIDS.
It also looks to RCI to enable efficiencies and policy quality:
Larger regional markets for goods, services, and capital will raise the efficiency of resource use and enhance the region’s global competitiveness. Closer regional coordination will elevate the overall quality of policy.

Current ADB focus in the Pacific has led to recent funding of renewable energy and energy efficiency projects.

Seasonal labour to NZ: Solomons develops formal systems

2008-04-08T11:25:00.011+11:00

National mechanisms are being developed to facilitate workers access to NZ's RSE scheme.

RSE stands for Recognised Seasonal Employer, the name of a new labour policy introduced by NZ in March 2007. According to the NZ Department of Labour:

The Recognised Seasonal Employer (RSE) Work Policy is a new policy that will facilitate the temporary entry of overseas workers to plant, maintain, harvest and pack crops in the horticulture and viticulture industries...

Through the scheme, up to 5000 workers per year may be recruited to work in the two key NZ industries of horticulture and viticulture. Nationals of 11 Forum countries, including Solomon Islands, are eligible.

SI workers recruited through the scheme can work up to 7 months out of every 11 in NZ, and are ensured of fair wages and adequate housing and working conditions throughout their tenure.

When started in March 2007, five countries were listed as kick start states: Kiribati, Samoa, Tonga, Tuvalu and Vanuatu. NZ helped these countries "to develop special facilitative measures to prepare workers and arrange pastoral care for their time in New Zealand."

As Solomon Islands was not part of this scheme, RSE participation by SI workers has so far proceeded without the facilitative support mechanisms available to kick-start countries.

This is now changing, with the Ministry of Foreign Affairs and External Trade, in consultation with the Ministry of Commerce, is putting together a government mechanism to facilitate the recruitment of citizens wishing to work in the seasonal labour markets offshore. According to PFNet's story, the Ministries of Trade and Commerce are collaborating to develop standardised recruitment systems:

The Ministry of Foreign Affairs and External Trade, in consultation with the Ministry of Commerce, is putting together a government mechanism to facilitate the recruitment of citizens wishing to work in the seasonal labour markets offshore.

Part of their impetus has come from suggestions of fraud on the part of local recruiters

The Ministry of Foreign Affairs and External Trade is taking the approach following recent concerns that some people are allegedly taking advantage of the opportunity by promising job offers in New Zealand under the RSE in return for money.

But while mechanisms at the SI end are important, support in NZ is also important. Already a series of cases of pending against Samoan seasonal workers has raised the issue of cultural 'fit' between workers and NZ society:

A Samoa seasonal worker in New Zealand has been charged with sexual harassment over an alleged offence in a bar involving a waitress....
Meanwhile, the CEO has revealed that two other Samoan seasonal workers were deported last week following a fight in a local bar in Hawkes Bay.

1 year on: The Great Gizo Earthquake and Tsunami

2008-04-02T00:42:00.006+11:00

Last week (2 April to be exact), Solomon Islands marked 1 year since the "Great Gizo Earthquake and Tsunami" of 2007 when a massive 8.1 earthquake struck the seabed south of Gizo in the Western Province, uplifting Rannonga island and triggering a tsunami.

According to the National Disaster Management Office the human and physical toll was massive:
• 52 dead and 40 injured
• more than 36 thousand people affected in 6900 households across 300+ communities
• more than 3 thousand houses destroyed and as many damaged

According to SPC projections this would mean approximately 40% of the Western-Choiseul population was affected by this disaster.

Although relief and recovery efforts have underway for many months now, by international, national government and NGO actors, many victims remain in tent housing, and disatisfaction with progress has been repeatedly voiced, most recently by the Governor General.

Hence while there have been commemorations of the events of last April, some victims threatened to boycott them.

The tsunami has been a significant test of the ability of both government and development actors to deliver services to the communities that form the majority of SI. The results appear to have been very mixed.

Pacific Economic report released

2008-04-01T12:12:00.006+11:00

AusAID has released the first of a new series of economic reports for the region:

The Pacific Economic Survey 2008 is the first of a series of annual reports on the economic performance of Pacific island countries and Timor-Leste.

For the Solomons, the results are mixed and very challenging:

5.8 % growth rate
growth is highly unsustainable and based on aid and logging

More articles in coming postings, on these and other issues regarding SI raised by the report, .

The Pacific Survey 2008 can be downloaded here.

Difficulties abound for Solomon Airlines in 2008

2008-04-01T11:42:00.002+11:00

Solomon Airlines ended 2007 in strife about its management, its board and an array of different stakeholders.

In 2008, the Airlines have kept being hit - from political, board, and competitive directions.

The new government has already run into problems appointing a new board, with criticism about the process as well as apparent miscommunication with Rick Hou the appointed chair.

Just last month, an unprecedented level of competition was introduced by Skyairworld with cut rate prices and 5 flights a week between Honiara and Brisbane.

The latest attack has come from former PM Sogavare, who argues the airline is not an asset to the country. He is calling for it to be sold.

These events are set against a difficult commercial situation for the airline - a former financial controller of the airline has reiterated that cashflow problems remain and are capable of crippling the airline in the near future.

Renewed focus on tourism

2008-03-29T08:21:00.002+11:00

Tourism is now being focused on (again) as a possible source of foreign dollars once logging collapses - this even from the Governor General.

Exciting tourism related developments are alreadyunderway:

a price war on the Honiara-Brisbane route via the entrance of SkyAirworld.
a new SI Visitors Bureau board.
possible international flights to Munda in the Western Province.

But big challenges remain:

internal domestic air services are very poor.
controversy continues to surround the Munda international airport project.

But the Tourism minister sees corruption as a key hindrance to tourism. Without specifying the ways in which this happens, Hon. Seth Gukuna reiterated the potential of tourism in his parliamentary speech.

Shifting tax from rice to alchohol, cigarettes

2008-03-29T07:59:00.005+11:00

Under the new budget taxes on beer and cigarettes will be raised by 20%, while taxes on rice imports will be slashed to nil.

The negative social externalities associated with beer and cigarettes have been cited for this change, but with soaring world food prices, it is not clear if the tax cut will fully counter record rice prices.

With rice already costing US$1 per kilo in Honiara and higher elsewhere, one NGO has already called for a return to traditional foodcrops as a means to combat this rise.

Whether locally grown or imported, the big question is: how can SI feed itself?

Private sector granting fund launched

2008-03-28T00:55:00.004+11:00

The Enterprise Challenge Fund for Solomon Islands was launched in Honiara today. The fund was set up by Australia to provide investment grants to businesses, aimed at raising overall incomes in SE Asian and Pacific countries.

SI is in the second group of countries; PNG and Fiji were in the first group, launched last year.

Through open competition, matching grants of AUD $100,000 to AUD $1.5 million (SBD650 thousand-8 million) will be awarded to private-sector business projects.

US$200mil budget tabled...both growth and challenges ahead

2008-03-28T00:25:00.006+11:00

Parliament is now debating the US$200 million budget. According to SIBC, recurrent spending is about $145million, while the development component is $55million.

According to Solomon Star, Finance Minister Rini's speech emphasised that rising oil prices, recovery from the conflict years and the end of logging will be the big challenges ahead.

The last two issues have already been highlighted by the Central Bank governor Rick Hou as key in the coming years:

“Economic growth in 2008 is foretasted to be substantially lower than in 2007. In fact International Monetary Fund has put a forecast of 1.5 percent growth by 2010.

“So you go from our growth of 10 percent now to 1.5 percent in less than five years. We are actually going backwards,”