World Bank Highlights Urgent Need For Economic Reform In Solomon Islands To Drive New Sources Of Growth

Sunday, 29 September 2024, 7:38 am
Press Release: World Bank

HONIARA, September 18, 2024 – A
comprehensive and ambitious reform effort could lift
economic growth in the Solomon Islands, helping the country
overcome pressing development challenges and propelling it
toward its goal of upper-middle income status by 2040,
according to a new World Bank report.

The Country
Economic Memorandum/Sources of Growth Study launched today
in partnership with the Ministry of Finance and Treasury,
emphasizes opportunities to boost growth through
digitalization, improved transport connectivity, and better
urban planning, alongside steps to stimulate private-sector
investment in tourism, agriculture, and
fisheries.

“This analysis is crucial in recognizing
the challenges Solomon Islands faces, but more importantly,
it highlights opportunities to drive change,” said
Stephen N. Ndegwa, World Bank Country Director for
Papua New Guinea and the Pacific. “By
addressing these issues, the government can create a
stronger, more resilient economy that benefits all Solomon
Islanders. The World Bank remains committed to
supporting these efforts and helping the country realize its
full potential.”

Manasseh
Sogavare, Solomon Islands’ Minister of Finance
acknowledged the challenges while expressing a commitment to
the necessary reforms. “The findings of this report
underscore the importance of reforming our economic
policies. We are committed to taking the necessary steps to
diversify our economy, improve infrastructure, and support
the private sector. These efforts are vital to securing a
better future for our
people.”

Solomon Islands faces a
pressing need to find new sources of economic growth to
offset the decline in its forestry industry, a traditional
driver of growth. Outside logging, however, most other
sectors are underdeveloped, partly due to the country’s
relatively small economy, scattered population, limited
government resources, and challenging business environment.
The report warns that without reforms, Solomon Islands is
unlikely to meet its growth goals or reach
upper-middle-income status by 2050.

The World Bank
report recommends reforms and investments to overcome
economic geography constraints, stimulate private sector
investment, and unlock new sources of economic growth.
Priority areas include improving transport and digital
connectivity, better urban planning, reducing barriers to
trade in services, improving access to finance, steps to
lower electricity prices, strengthening land administration
systems, investments in agriculture, fisheries, and tourism,
and increasing labor mobility through better education and
training.

This research provides new insights into
Solomon Islands’ current economic headwinds. However it
highlights that with targeted reforms and strategic
investments, the government can address these challenges and
work toward a more resilient
economy.

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