11 September 2019
Australia Enabling economic growth in Solomon Islands
The Australian Government is continuing to work with the Solomon Islands on several programmes to enhance economic growth and development, including in the areas of rural development the transport sector and in the programme styled “Growth Programme.”
The three programmes mentioned each commenced in 2016 and are expected to be completed in 2020.
In relation to the “Growth Programme” said to have involved an investment of up to $50 million, the initial overview read, quote:
“The Solomon Islands Growth Program (SIGP) aims to support increased private sector investment in a more inclusive Solomon Islands economy. It seeks to do so by making the operating environment more attractive to business and increasing the number of men and women who are able to earn a cash-based income. SIGP is the flagship investment underpinning the Australian aid program's increased focus on economic growth in Solomon Islands. It complements a broader portfolio of investments, including bilateral and regional programs that target infrastructure, market access, trade facilitation, governance, skills, private sector enabling environment reform and women's economic empowerment. The Program has three components:
- Targeted infrastructure investments delivered through existing mechanisms
- Support for private sector advocacy and economic reform
- Stimulating growth in specific sectors.
“For example, the two largest activities under the SIGP are a $17 million investment (2017-2019) in the Tina River Hydropower Development Project (Tina River Hydro) and a $14 million investment (2017-2020) in a new Strongim Bisnis facility. Tina River Hydro, led by the Solomon Islands Government and the World Bank, 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). Strongim Bisnis will work primarily with the private sector on business practice, market development, risks and resilience, and women's participation in the economy. It will focus initially on the cocoa, copra and tourism markets.”
With regard to the RDP assistance package, worth up to $31.8 million it was said initially, quote:
“The Rural Development Program is a joint program with the World Bank, Australia, the European Union, and International Fund for Agricultural Development and the Solomon Islands Government. The program is raising the living standards of rural households by improving infrastructure and services, as well as helping the Ministry of Agriculture and Livestock to deliver advice and services to farmers. Phase one of the Rural Development Program (2008-2015) had three components: building small-scale village infrastructure, building capacity in the Agriculture Ministry, and assisting rural businesses with training and finance. Phase two (2015-2020) will provide small scale village infrastructure projects in every rural ward of Solomon Islands, support productive alliances between private sector and smallholder farmers, and stimulate agribusiness activity in rural areas.”
The Transport sector programme, up to $50 million, was introduced as, quote:
“Australia has partnered with Solomon Islands Government (SIG) and the Asian Development Bank (ADB) through the National Transport Fund since 2011. After the success of the first phase of this program ($37.5 million, 2011-2016), we commenced the second phase in May 2016, known as the Sustainable Transport Infrastructure Improvement Program. Through this program, Australia directly supports SIG to maintain and improve transport infrastructure, including roads, bridges and wharves. Priorities are set out in SIG's National Transport Plan. The program also helps to build the skills, systems and capacity of the Ministry of Infrastructure Development to deliver reliable and sustainable transport infrastructure services. Maintenance and rehabilitation works are contracted out to the private sector, generating business and employment opportunities in Solomon Islands.”
All three programmes set out to be very comprehensive and costly but given that they are due to be completed next year, it would be highly appreciated if the Australian government could possibly release feedback on the growth developments so far achieved for the benefit of a wider international audience wishing to have a better understanding of the prevailing situation in the Solomon Islands in the light of a further expected assistance programme.
It will be recalled that during Prime Minister Morrison's visit to Solomon Islands in June 2019, he announced that Australia will establish a bilateral infrastructure program, worth up to $250 million in grant financing over 10 years.
The programme said to support key national and economic infrastructure and complement the Australian Infrastructure Financing Facility for the Pacific.
Thank you, Australia.