Australia is working together with Solomon Islands to enhance economic growth and development in Solomon Islands. Australian assistance will address constraints to growth in Solomon Islands' economy. We will continue to support infrastructure programs essential for business and trade. This includes efficient and reliable access to transport and energy. Australia will engage strategically with Solomon Islands Government (SIG) through: dialogue on economic and fiscal policy; assistance to improve public financial management; and advocacy for reform on the existing regulatory and compliance burden on business.
As announced during Prime Minister Morrison's visit to Solomon Islands in June 2019, Australia will establish a bilateral infrastructure program, worth up to $250 million in grant financing over 10 years. The program will support key national and economic infrastructure and will complement the Australian Infrastructure Financing Facility for the Pacific.
The Solomon Islands Growth Program is the flagship for Australian support to increase private sector investment in a more inclusive economy. It aims to catalyse private sector investment and increase opportunities for inclusive growth by targeting industries with the highest potential. Particular focus will be given to promoting women's participation and reducing costs to business.
Through regional programs, Australia will provide support for fisheries management – including effective regional cooperation with the Forum Fisheries Agency and the Secretariat of the Pacific Community – and improved market access for Solomon Islands' exports.
Australia's Seasonal Worker Programme (SWP), led by the Department of Employment, connects Pacific island and Solomon Islands workers with Australian employers experiencing labour shortages, typically in rural and remote areas. This benefits both parties and the average worker remits around $5,000-$6,000 during a six-month placement. Solomon Islands participation in the SWP doubled to 175 in 2017-18 and increased to 314 in 2018-2019, supported by ongoing work to train, prepare and support increased numbers of future workers.
In September 2018, Solomon Islands joined the Pacific Labour Scheme. The scheme will enable Solomon Islanders to undertake low and semi-skilled work in rural and regional Australia for up to three years. Participation numbers for 2018-19 was 21.
Australia is committed to supporting the construction of the Coral Sea Cable System between Australia and Solomon Islands. The cables will allow faster and more reliable connectivity to the people of Solomon Islands, providing opportunities for economic growth and development.
Australia will look for opportunities to assist Solomon Islands to fully benefit from the Pacific Agreement on Closer Economic Relations (PACER) Plus.
Solomon Islands Growth Program
Up to $50 million, 2016-2020
The Solomon Islands Growth Program (SIGP) aims to support increased private sector investment in a more inclusive Solomon Islands economy. It seeks to do so by making the operating environment more attractive to business and increasing the number of men and women who are able to earn a cash-based income. SIGP is the flagship investment underpinning the Australian aid program's increased focus on economic growth in Solomon Islands. It complements a broader portfolio of investments, including bilateral and regional programs that target infrastructure, market access, trade facilitation, governance, skills, private sector enabling environment reform and women's economic empowerment. The Program has three components:
- Targeted infrastructure investments delivered through existing mechanisms
- Support for private sector advocacy and economic reform
- Stimulating growth in specific sectors.
For example, the two largest activities under the SIGP are a $17 million investment (2017-2019) in the Tina River Hydropower Development Project (Tina River Hydro) and a $14 million investment (2017-2020) in a new Strongim Bisnis facility. Tina River Hydro, led by the Solomon Islands Government and the World Bank, is intended to become Solomon Islands' largest public-private partnership. The dam and power station could meet around two thirds of Honiara's forecast energy needs, significantly reducing Solomon Islands' dependence on diesel power and addressing a major constraint to business (expensive and unreliable electricity). Strongim Bisnis will work primarily with the private sector on business practice, market development, risks and resilience, and women's participation in the economy. It will focus initially on the cocoa, copra and tourism markets.
Transport Sector-Based Approach – Phase Two
Up to $50 million, 2016-2020
Australia has partnered with Solomon Islands Government (SIG) and the Asian Development Bank (ADB) through the National Transport Fund since 2011. After the success of the first phase of this program ($37.5 million, 2011-2016), we commenced the second phase in May 2016, known as the Sustainable Transport Infrastructure Improvement Program. Through this program, Australia directly supports SIG to maintain and improve transport infrastructure, including roads, bridges and wharves. Priorities are set out in SIG's National Transport Plan. The program also helps to build the skills, systems and capacity of the Ministry of Infrastructure Development to deliver reliable and sustainable transport infrastructure services. Maintenance and rehabilitation works are contracted out to the private sector, generating business and employment opportunities in Solomon Islands.
Urban Water Supply
Up to $16.7 million, 2011-2018
Australia is funding the Solomon Islands Water Authority (Solomon Water) to implement its Development Plan 2013-2017. This builds on the success of Australian funding for Solomon Water's earlier Short-Term Recovery Strategy and Action Plan (2011-2013). This supports Solomon Water to improve levels of service (in terms of quantity, quality and reliability) to a larger proportion of people in the existing service area, based on a sound financial position.
Solomon Islands Rural Development Program
Up to $31.8 million, 2008-2020
The Rural Development Program is a joint program with the World Bank, Australia, the European Union, International Fund for Agricultural Development and the Solomon Islands Government. The program is raising the living standards of rural households by improving infrastructure and services, as well as helping the Ministry of Agriculture and Livestock to deliver advice and services to farmers. Phase one of the Rural Development Program (2008-2015) had three components: building small-scale village infrastructure, building capacity in the Agriculture Ministry, and assisting rural businesses with training and finance. Phase two (2015-2020) will provide small scale village infrastructure projects in every rural ward of Solomon Islands, support productive alliances between private sector and smallholder farmers, and stimulate agribusiness activity in rural areas.