5 Key Takeaways from the 12th Australia Solomon Islands Business Forum
By Leonard Chite and Vivienne Storey
Last month, Pacific Legal Network’s representatives Vivienne Storey and Leonard Chite attended the 12th Australia Solomon Islands Business Forum, in Brisbane, Australia. It was an incredible event, revived in person after a few years break due to COVID-19.
Outlined below are our five (5) key takeaways (the list is by no means exhaustive):
1. Innovative business partnerships are crucial to economic development
There was an emphasis on the need for external business partners/investors to incorporate capacity development, in conjunction with revenue and profit making goals, resulting in the transfer of real skills. Real skills are important tools to help bridge the existing skills gap, enabling the consistent delivery of high quality products and services. Several speakers attested to the need for work experience, which would in turn help increase quality work output. We agree, ‘experience’ is a product of skillsets and breadth of knowledge gained over a period of time in a certain field of expertise or profession. To achieve real skills development, current and potential investors must look for ways to give local Solomon Islanders work experience opportunities moving forward.
2. Projected economic growth
It was highlighted that the country’s economy is slowly recovering from COVID-19 and the November 2021 riot. The Russia and Ukraine war has caused some disruption as well. It was recorded in 2022 that the country’s import was up by 19% to $4,460 while export down by 7% to $2,982m; creating a trade deficit equivalent to 13.5 % of GDP. We totally agree that there needs to be a regulatory framework or mechanism implemented to help curb or narrow the deficit gap. More focus should be placed on incentivizing our domestic manufacturing, packaging and other industries, to help boost the export of our products and services. While we accept that logs and other raw materials are exportable commodities – careful assessment is required to avoid unsustainable harvesting, and more focus should be on the production and export of secondary products as opposed to primary. Also, local businesses need to understand the requirements for exporting of commodities, i.e. international market expects both quality and quantity – thus the need for farmers and entrepreneurs, etc. to collaborate to meet the requirements for exporting. Regional organizations like MSG, PIFS, Pacer Plus, etc. are there to help with issues of scale and market access when needed.
3. Business opportunities; requirements and challenges
Regionally there is a negative connotation to the current Geopolitics with China and US - but for the Solomon Islands, it has attracted attention and focus like never before. As a result of the switch to China, the Western Allies, including their affiliates, have stepped up their presence in the country, with the US recently opening an embassy in Honiara - and other countries following suit! The country is currently undergoing an infrastructure boom with development partners (including China) providing much needed financial support. Part of the assistance that China has offered is the construction of the Pacific Games’ stadiums and related infrastructure. Other projects include Solomon Islands Road and Aviation Project, Land and Maritime Connectivity Project, Solomon Islands Infrastructure Project, Tina Hydro Scheme, Solomon Islands Broadband Tower Projects, Bina Harbour, and other Solomon Islands Government Projects.
With the Pacific Games looming, investors are aggressively looking to invest in the country and development partners like World Bank, DFAT, USAID, ADB and JICA which are focusing on, among other areas: tourism, digital and tangible infrastructures, supporting the blue economy and improving essential services. While it’s positive to see this investment taking place around the Pacific Games, it’s incumbent on government to ensure best practice standards are met for these projects and other day to day infrastructure issues are also addressed. For example, the bad road conditions, expensive electricity costs, continuous water supply, theft problems, and land issues.
4. Trade and investment
Regional bodies, including Pacer Plus, are tirelessly working with/through the Ministry of Foreign Affairs and External Trade (MFAET) - to implement regional agreements, strategies, and pragmatic approaches to help harmonize trade and investment in the country and around the Pacific region. As Pacer Plus Head of Secretariat eloquently said: “Pacer Plus is not the silver bullet,” but it helps to alleviate some of the challenges and hurdles faced by Pacific Islands in entering into the international market. For instance, Pacer Plus is currently working on, among other things, providing platforms to boost professionals' and skilled labors’ recognition, through more widely recognized accreditation - alleviating the walls of strict requirements, which quite often prevent Pacific Islanders from entering the international labour space.
5. Game changer bills are pending
A classic example is the Value Added Tax Bill (VAT). While it is still early to discuss this – VAT is aimed at, among other things, removing stamp duties, sales tax and other minor taxes to replace them with a VAT or GST (regressive taxation) system similar to other jurisdictions in the Pacific.
Last month, while responding to the speech from the Throne, the Prime Minister called on Permanent Secretaries and responsible officers to forward the outstanding Bills, before the cabinet. He expects them to be tabled in Parliament in this 6th meeting. The pending Bills include:
(1) Constituency Development Fund (Amendment) Bill;
(2) Public Health Emergency Bill;
(3) Mineral Resource Bill 2023;
(4) Electricity (Amendment) Bill;
(5) Petroleum (Amendment) Bill;
(6) Education Bill;
(7) Forestry Bill;
(8) Building Code Bill;
(9) Environment Bill;
(10) Pacific Games 2023 (Amendment) Bill;
(11) Value Added Tax Bill;
(12) Electoral Act 2018 Amendment; and
(13) Special Zone Bill.
The introduction of these bills would be fundamental in accelerating development and productivity.