Growth sector policy investment challenged

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By EDDIE OSIFELO

MEMBER of Parliament for Small Malaita, Rick Hou has highlight some challenges Government may face with its policy to invest in growth sectors.

Minister of Finance and Treasury, Harry Kuma told Parliament last week that the $4 billion budget will deliver on the DCGA policy outcome and to ignite sustained growth in the productive sector, to produce jobs and create wealth for our people.

Hou said indeed that is normal expectations of all government budgets.

“However, under the 2021 budget, the allocations given to those ministries which are critical to achieving this objective are so meagre that a permanent secretary of one of the concerned ministries described it this way, “If you continue doing the same thing, don’t expect a different result”.     

Hou said the policy to support our local farmers, producers and small businesses to compete in the global market is a bold one.

“However, we have to appreciate the realities on the ground. 

“The impediments to Solomon Islands being a destination by choice for foreign direct investment are structural and administrative: not really financial,” he said.

Hou said firstly, Solomon Islands does not have economies of scale, so we cannot even start to compete.

“Secondly, by comparison to our neighbours, it is costly and not easy to conduct business in SI, so serious investors normally avoid SI.

“That means opportunities to tap on external business partnerships are quite low,” he said.

Hou said thirdly, our farmers and rural producers are not only small, but they face huge disparities which render them isolated and much of their activities disorganized. 

“Carrying on business alone in remote areas of this country is unsustainable without direct government intervention,” he said.

Hou fourthly said, on government intervention lack of physical connections to markets, impede supply-flows.

“This can be addressed by decisive government action.

“Such actions should include a sustained large scale investment program in building necessary transportation infrastructure; establishment and strengthening of appropriate institutional and supporting administrative mechanisms; a sustained aggressive marketing campaign; and a wide range of financial incentive schemes,” he said.

Hou said addressing these impediments would be a good re-direction policy.


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