IF you are like me, observing with mortification, the languid state of our economic development, then I hope this article can ignite excitement that this state of affairs can actually change, literally overnight- well maybe over a matter of months to be exact.
However considering the time we have been languishing, on average, in economic decline, maybe the above is a candid statement.
What is the basis for this genuine claim?
Special Economic Zones (SEZs) of course!
In fact Government has been pushing the establishment of SEZs but hasn’t actually succeeded.
An attempt in 2017 to get a Bill into Parliament didn’t materialize and there is currently a push within Government to implement SEZs as part of its policy redirection but lack of funding may have scuttled this effort.
May I suggest that Cabinet makes a declaration that all Provincial urban centres will be SEZs and start developing these SEZs using PPP.
The Provincial urban centres are on crown land so the difficulty of land access will be skirted and Government will be dealing with far fewer problems than seeking to develop SEZs elsewhere.
Making a start with the Provincial Centres will build momentum for development of special economic zones and set the platform for driving meaningful economic development in our country.
Given that the current models are not working, maybe SEZs will be the engines of growth that will stimulate employment, export production, and harness the potential in rural areas for economic growth.
Managing the process for developing SEZs is not that difficult, I suggest.
First things first, Government meets with all Premiers to obtain their support for the proposal and then Cabinet makes the declaration.
The lead ministry, the MCILI establishes a taskforce to spearhead the process.
After the declaration the taskforce meets to draw-up tender documents for investors to invest under PPP to develop the SEZs.
Hoping that there will be several interested investors/operators, a number of SEZs can be developed simultaneously until all the SEZs have been developed in the Provincial Centres.
To ensure investor funds risked to develop the SEZs are recovered, a number of businesses in the SEZs will be reserved for the investors/operators to manage.
Overtime these business ventures will be transferred to the respective Provinces at no recourse.
We are optimistic that our economy will rebound from 2022 with the ADB and CBSI projecting growth to be around 3+% .
This projected rate can be increased if the SEZs are developed from now so that by next year, some will already be in business and producing for exports.
Concurrently, the SEZs will modernize the Provincial Centres, turning them into growth centres, and through creation of aggregate demand in those centres, a multiplier effect could be fashioned that will generate multiple knock-on effects cross the provinces therefore consolidating economic development in the Provinces, with greater combined impact on our overall economic performance which in finality can lift our standard of living and state of economic prosperity.
With these possibilities, it would pay for our country for SEZs to be established.
And, any responsible Government will certainly seize the opportunity to act decisively and take action to advance the establishment of SEZs in our Provincial urban Centres.
PETER FORAU
Honiara
