SIG introduces economic recovery plan


IN a concerted effort to revitalize its economy, the Solomon Islands government has unveiled a comprehensive set of short-to-medium-term strategies.

These measures, designed to stimulate economic growth and enhance the country’s resilience, span multiple sectors and initiatives.

One of the key strategies involves the promotion of trade in cash crops, such as copra and cocoa, as well as timber. The government plans to facilitate this trade by subsidizing domestic shipping services, which will, in turn, invigorate the agricultural and forestry sectors.

To support essential State-owned Enterprises (SOEs) and large private sector firms crucial for employment and value addition, the government is prepared to provide capital injections where needed.

The government has laid out a multifaceted approach to support the domestic agriculture and fishery sectors.

This includes leveraging new diplomatic relationships to expand international market access for local exporters, seeking accreditation to ISO standards to enhance competitiveness, promoting investments in biosecurity technologies, and facilitating access to finance through the Development Bank of Solomon Islands (DBSI) and CBSI Lending Guarantee and Export facilities.

Additionally, there will be investments in the rehabilitation of coconut and cocoa plantations and encouragement of investments in the fishery sector, with a focus on seaweed, bechdemer farming, and other viable aquaculture products.

The overarching policy objective of the government is to encourage private sector investment in value-added products, both for domestic consumption and export. This approach will center on key sectors such as agriculture, forestry, and fisheries.

The Inland Revenue Division (IRD) faces the challenge of balancing revenue collection with supporting businesses and households during civil unrest and the pandemic.

Finance and Treasury Minister Harry Kuma stressed in Parliament recently the need for flexible tax measures to assist businesses while ensuring that revenue targets are met.

“Recognizing various constraints to development and growth, the government is embarking on structural and institutional reforms, including tax reforms.

“This will address issues like a lack of access to financial services, limited competition in key areas, skill shortages, land access problems, inadequate infrastructure, weak institutions, governance challenges, and a shortage of employment opportunities,” he said.

Collaboration and coordination among ministries are actively encouraged to facilitate the planning and implementation of the 2024 budget. This includes fostering working relationships to address crosscutting needs and cost-sharing arrangements to expedite key government priorities.

The government recognizes the importance of infrastructure in facilitating international trade. It hopes that the successful completion of the Solomon Islands National Broadband Infrastructure Project (SINBIP) will not only enhance telecommunications services but also boost international trade. Furthermore, the government plans to improve and expand international port infrastructure services to foster growth and development.

Presently, the Solomon Islands Port Authority (SIPA) monopolizes international port services in Honiara and Noro. To encourage growth, the government is planning to liberalize the provision of international port services, opening the door to increased international trade.

Kuma said with 45 years of political independence since 1978, the Solomon Islands aims to learn from past development experiences and chart a new path based on its unique strengths and lessons from successful developing countries in Asia and Africa.

These measures underscore the government’s commitment to fortifying the nation’s economy, promoting development, and achieving sustainable growth, even in the face of challenges and constraints.

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