World Bank report shows Solomon Islands in the green zone, the only country in the Pacific not at high risk of debt distress
BEN BILUA
Solomon Islands’ debt is in the green zone, meaning our debts are not burdening our economy.
The World Bank Fiscal Outcomes and Public Debt report shows Solomon Islands is bouncing back with a low debt distress record.
The report shows Solomon Islands gradually improving its public debt since 2023 and recorded an all-time-low debt in 2024.
The report shows five countries in the pacific that remain at a high risk of debt distress.
Speaking during World Bank’s Pacific Economic Update yesterday, World Bank country economist Lodewijk Smets said World Bank and IMF analyse countries’ debt levels and projection to determine the average debt and whether the debt levels are sustainable.
He said Solomon Islands is the first and only country in the Pacific with low risk.
Smets added that Solomon Islands is sustainably managing its debt so there is an opportunity to make investments.
“Aid dependency is high in the pacific and it is important to focus on aid effectiveness.
“Paris Declaration on aid effectiveness is an important document that establishes certain principles how to deliver aid and make sure aid dollar is well spent.
“Countries need to own aid programmes, focus on results and harmonise aid investments.
“This is the opportunity to address your development challenges,” he said.
Smets said it is important that Solomon Islands sustains its debts as the situation can fluctuate and change the debt level.
On the other hand, World Bank’s Senior Economist, Ekaterine Vashakmadze said having a huge aid programme is good if its effective and contribute to potential growth.
She strongly emphasised that grant and aid deliver result.
“Bottom line is transparency and accountability,” Vashakmadze said.
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