By Gary Hatigeva
HAVING the former Development Bank of Solomon Islands re-established is the way forward to give opportunity to the rural masses to contribute directly into the national economy, says Trevor Manemahaba, a member of the Working Committee responsible for the revitalisation of the Development Bank.
Manemahaba highlighted this when making his presentation on Development Bank of Solomon Islands Bill 2018, where he spoke on the detailed essence of it and the policy rationale behind intentions to re-establish the development bank, before the Bills and Legislation Committee (BLC) this week.
In his presentation, Mr. Manemahaba pointed out that it is evident there is a gap in the financial systems’ reach in Solomon Islands in terms of access to finance in the rural areas, where the masses of the population live, and the financing vehicle in the rural setting is nearly non-existent.
“Therefore the Democratic Coalition for Change Government (DCCG) in 2015, by recognising the need to revitalise DBSI to address the existing gap, endorsed the Terms of Reference of the DBSI Working Committee and its establishment on July 15, 2015.
“The DBSI Sub-Committee and the working committee have undertaken numerous consultations both regional and national to inform the stakeholders on the noble intention of the government,” the Working Committee Economist personal explained.
He further explained that with the intentions, the government drew up some rational to help guide its policy with hopes to expand access to finance, supporting rural economies, and push for economic advancement in Solomon Islands.
Manemahaba explained that from how it was redesigned, the Development Bank will become a vehicle to promote, stimulate and strengthen economic development in the Solomon Islands.
The Policy rational to revive DBSI according to Manemahaba also looks at expanding productive activities in the rural areas and increase participation of the indigenous population in commercial activities.
“Ensure 80% of the rural population receives the opportunity to participate in various economic activities, and enhance participation of Solomon Islanders in the rural productive sector, and prevent Solomon Islanders to become excluded in economic development.
“While at the same time, look at the existing financial sector in these country is dominated by commercial banks, which were contended with short-term banking activities and were either not willing nor not in a position to support national priorities of long-term investment outside of Urban Centres,” he said.
When speaking on the fundamental aspect of getting the development bank revived, the Economist further pointed out that while re-establishing DBSI is an important achievement in itself, the reform of the DBSI law is equally fundamental.
“This is to provide an adequate legal underpinning for the prudent operation and management of DBSI.
He said the new (amendment) DBSI Bill is expected to address what have been outlined as some of the underlying issues, which includes the development of a legal regime for DBSI that is in conformity with good governance and international best banking practices, and to provide transparency and accountability.
The others include enhancing Good Governance (new improvements), with hopes for it to provide an effective governance platform for the prudent running of the new Bank, and by ensuring transparency and robustness in the selection of Board members and the executive management of the financial market.
The PMO Official noted that the new bill is also looking to support financial deepening and serves a place in the market that cannot be reached by other players in the financial market, and added that this can be achieved with the development of a proper financial system.
“In a nutshell, the Development bank of Solomon Islands will fill a gap or void left by undeveloped capital markets and reluctance of commercial banks to offer long-term financing outside Honiara.
“It is evident that the absence of Development Bank has in effect pushed rural Solomon Islanders to a point of economic exclusion,” Manemahaba concluded.
However, while supporting the initiative, the BLC Chairman and MP for Aoke/Langalanga, Matthew Wale cautioned the government not to take the same path the former DBSI went through, and added that it must really serve the purpose of initial intention for its establishment, and avoid becoming too commercialised that it will forget the rural mass officials are talking too much about.
Also sharing similar views, Member of the BLC and MP for East Makira, Alfred Giro supported his chairman, and added that the Development Bank, if re-established, must decentralise its services and not in Honiara or the Urban Centres alone.
“Therefore the government and those involved must create mechanisms and avenues for the most rural people to receive its services,” the East Makira MP suggested.
The Revitalisation and recapitalisation of the DBSI is one of the government’s key flagship policy commitments, initiated with hopes for it to ensure the majority of Solomon Islands are provided the opportunity to engage in various economic activities.