The Solomon Islands, with a population of 500,000, is the third-largest state in the Pacific. It is also one of the poorest and least developed. Its islands are richly endowed with volcanic soils, marine resources, timber, and minerals, and are well-located for trade and tourism near burgeoning Asian markets. Yet living standards are scarcely higher than they were at the time of independence.
The Solomon Islands’ tumultuous history is a result of thirty years of economic stagnation.
Large numbers of migrants moved from the island of Malatia to Guadalcanal in search of better economic opportunities, and came to be resented by Guadalcanalese who claimed the Malaitans were taking their land and jobs. From the mid-1990s, civil unrest turned to violence, with open fighting bringing economic decline and finally triggering collapse. In April 2003, then Prime Minister Allan Kemakeza requested Australian assistance. After discussions with New Zealand and endorsement by the Pacific Islands Forum, an Australian-led assistance package became the Regional Assistance Mission to the Solomon Islands (RAMSI).
RAMSI landed military, police, and civilian personnel in the Solomon Islands in 2003. The immediate objective was to restore law and order by confiscating firearms and establishing a presence in the nine provinces. Those responsible for the worst of the violence were to be brought to justice.
The RAMSI intervention marked a turning point for Australia’s relationship with the Pacific islands. After years of high aid flows that tried to assist development, Australia was reluctantly forced to, in effect, take over the running of one of its closest neighbours.
This year will mark five years since RAMSI’s forces landed in the Solomon Islands, and their success to date has been mixed. The Australian Defence Forces’ pacification effort has been enormously successful. Over 6,000 militiamen have been arrested, over 9,000 charges have been laid, and more than 3,000 guns have been confiscated. Civil stability has returned, but the security gains will prove temporary if the underlying economic stagnation that led to the civil unrest is not addressed.
RAMSI has laid the foundation for development by restoring macroeconomic stability. Tax efficiency has been addressed and revenues increased. An audit system for government departments has been introduced and political ‘slush funds’ have been cut.
RAMSI’s economic production efforts, however, have focused on reducing regulatory barriers to business in Honiara and encouraging foreign investment. The Solomon Islands, where most people do not even participate in the cash economy, now has world-class banking regulations. The majority of Solomon Islanders have not been affected by these measures because this is not where the bottlenecks to economic growth are. More than 85% of Solomon Islanders live subsistence lives in rural areas.
Their gardens have kept a growing population fed, but without education and health services. Honiara teems with unemployed youth idling in the shade, despondent and restless because they have no present and no future.
There are few income-earning opportunities in the villages, and no jobs in the towns. There is no indigenous informal sector. Chinese shopkeepers and other expatriates dominate commercial opportunities.
RAMSI has concentrated its efforts on peripheral problems and ignored the real constraints to growth.
Agriculture is the key to raising rural living standards, and land tenure is the key impediment to raising agricultural output and incomes. Without land surveys, registration, and long-term leases there can be no progress. Infrastructure is the second bottleneck. Without roads, inter-island transport, education, and mobile phones, agriculture and small off-farm business cannot develop.
The Solomon Islands is better off with the involvement of RAMSI than without, but RAMSI risks becoming just the latest agency promising to deliver development with little improvement to show for their pledges.
There can be no stability in the Solomon Islands without raising agricultural incomes, providing new sources of employment, and growing indigenous commercial opportunities. These must be RAMSI’s concern if it is to have an exit strategy.
Gaurav Sodhi is a Policy Analyst at The Centre for Independent Studies.