CBSI’s Emphasised on Broad-Based Economy

CBSI Governor, Denton Rarawa handover a copy of the CBSI 208 Annual Report to the new Minister of Finance and Treasury, Hon Harry Kuma.

THE Solomon Islands Chamber of Commerce and Industry (SICCI) supports the statement made by Central Bank of Solomon Islands (CBSI) Governor, Mr Denton Rarawa emphasizing that the country could lay the foundation of a broad-based economy by putting more emphasis on agriculture and tourism.

The Chamber says the statement made by the Governor during the launch of the 2018 CBSI Annual Report on Monday 20th May 2019 must be seriously considered if we are to transform the country’s economy in order to sustain the rapidly growing population.

Executive Officer leading the Chamber’s advocacy department, Mr. Nelson Kere, says with the reality that forestry will decelerate, taking the initiative to be sustainable will mean that the Government will need to build up its investment in alternative economic drivers.

He also reiterated the Governor’s call stating that Solomon Islands needs growth that is inclusive so that those in the rural areas can also benefit from development.

“Tourism offers an important alternative pathway for economic growth. Solomon Islands is considered to have world class tourism potential and with Government support the country could unlock this potential and gradually provide a more sustainable source of growth.

“Agriculture is an inclusive growth area because most people in our rural areas can participate and benefit from it,” Mr. Kere said.

CBSI Governor, Mr Rarawa said to realistically grow the economy without overheating it, we should be growing at an average of 6% over the medium term.

“To achieve this, we should address structural issues in the economy, and appropriately invest in the growth areas that we can realistically develop and sustain.

“To grow at 6 percent means it will only take us around 12 years to double growth, and that rate is just right to deliver a growth that is inclusive, cross cutting and achievable,” he said.

To reach this point, Mr Rarawa said we should lay the foundations of a broad-based economy by putting more emphasis on agriculture and tourism, without disregarding other sectors.

He said to revitalize the agricultural sector, the country should seriously invest in replenishing the stock of our current commodities over the next three to four years, grow new cash crops and enhance and properly resource the Ministry of Agriculture and Livestock (MAL) and associated agencies to appropriately support farmers, while at the same time, liaising with development partners and programs on the most effective interventions.

With respect to tourism, Mr Rarawa said this is a growth sector with cross cutting positive spill overs and can be a catalyst for infrastructure, employment, education, wholesale and retail, transport and technology development.

“These are just some ways we could shape our economy as we see slowdowns in the forestry industry, and strive to diversify the economy, there are of course other important sectors as well,” he said.

Meanwhile, the Chamber continues to maintain that developing a conducive business environment in the country will contribute significantly in boosting our economy which will also have a positive impact on both the agriculture and tourism sectors.

SICCI CEO, Ms Atenasi Ata said the private sector plays a crucial role in the economic development of the country.

“Addressing the broad range of issues impacting upon businesses to support development in the Solomon Islands must be a priority. SICCI has held consultations with its members and the resultant Private Sector Scan report highlights key structural and economic challenges facing private sector, reinforcing the need for robust policy engagement between the Solomon Islands Government and the private sector.”

Issues in which the Chamber advocates on include:

  • accessing land with confidence in right of ownership,
  • reducing corrupt practices in government procurement processes,
  • gaps in infrastructure such as transport infrastructure, utilities and communications infrastructure,
  • the unnecessary and costly competition in sectors where Government also provides services such as in shipping pointing to efficiencies that could be gained instead through public-private partnerships,
  • reliable supply of, and appropriately skilled, labour,
  • costs and reliability of utility services including by SOEs,
  • a complicated and burdensome tax framework,
  • limitations to communication capabilities not allowing businesses to be efficient and to grow,
  • a bureaucracy that is not responsive to business needs,
  • and contributing to the development of new sectors.

Ms Ata says that the Chamber is in for the long haul.

“In our new Strategic Plan 2019-2023, the Chamber adopts a collaborative and long-term view with all the issues it advocates on. We have prioritised progressing discussions with Government and its partners on land reform; tax reform; infrastructure investment and corruption. Thus, whilst the conversation today is about broadening the economic base, we see that the existing inhibitors to growth which are already well-known can also reap significant dividends if addressed today,” the SICCI CEO said.

According to CBSI, the economic forecast for the next four years is for an average growth of 4.5 percent.