New Zealand High Commission Honiara, Solomon Islands

SoloBis Newsletter May 2011

The May 2011 edition of our SoloBis newsletter has just been published. SoloBis is a bi-monthly update of business and economic happenings in Solomon Islands, of potential interest to New Zealand businesses.

SoloBis Special, 23 May 2011

Welcome to this Economic Update special edition of “SoloBis”, produced by the New Zealand High Commission Honiara in the lead up to the visit of the New Zealand-Pacific Business Council Trade Mission to Solomon Islands, 24-28 May. This edition covers the Central Bank of Solomon Islands 2010 Annual Report and economic outlook, as well as developments in the fisheries sector.

Our next bi-monthly newsletter will be published at the end of June. For further information, please contact, with “SoloBis” in the subject line.

NZ Trade Mission comes to town

• A New Zealand Pacific Business Council trade mission, headed by MP John Hayes, is to visit Honiara this week to investigate new business opportunities between New Zealand and the Solomon Islands. The 10 companies that are taking part deal in aluminium, vehicle tyres, architecture, automobile accessories, renewable energy, uniforms, greenhouse and horticultural products, and food exports.

• The mission will hold a “Mini Expo” at the Honiara Hotel from 9am to midday on Wednesday 25 May.

Central Bank reports a good year for the economy

• The Central Bank has given an upbeat picture of the Solomon Islands economy in its 2010 Annual Report, published this month. It describes nearly all economic indicators for the year as positive and says the trend is expected to continue through 2011 – though with some risks around inflation.

• The Bank reports that GDP growth was 7 percent in 2010. Logging was the main contributor. Total trade in goods rose 45 percent off a 16 percent decline in 2009. Services growth was also strong, particularly in construction and telecommunications (thanks to the entrance of a second mobile service provider, bemobile).

• Inflation was a record low of 1 percent thanks to stable food and fuel prices, and big drops in mobile phone prices as a result of the end of the Our Telecom monopoly. The Bank says it will use appropriate monetary and exchange rate mechanisms to hold inflation down if external pressures on food and fuel prices eventuate.

• The Bank assesses that employment grew strongly last year, though the evidence for that is mainly anecdotal.

• Governor Rarawa gave two warnings at the Report’s launch. First, he said, economic growth needed to be more inclusive, so all Solomon Islands people benefited from it. He urged the Government to press ahead with its plans to build “growth centres” in less well-off provinces such as Choiseul, Isabel and Makira, and free up investment access to traditionally-owned land.

• Governor Rarawa also called on the Solomon Islands people as a whole to lose what he called the “fitim Solomons” syndrome – an acceptance within society that Solomon Islands products, services and facilities could legitimately be of a lower standard than would be accepted elsewhere.

Korea proposes SBD1 billion fisheries investment

• A Korean consortium has announced plans to establish a major tuna canning facility and supporting infrastructure at Doma, Guadalcanal. The project is reported to be valued at around SBD1 billion (around NZ $170 million) and is expected by its principals to generate between 3000 and 5000 local jobs. The consortium, which is led by Dongwon Industries (owner of the Starkist brand) hopes to process 100 tonnes of tuna per day at a new facility west of Honiara.

• Construction plans include a 160m wharf, a large cold storage facility, shipping infrastructure and accommodation. The Solomon Islands Government is working with the Guadalcanal Provincial Government to carry out due diligence and progress the Korean project, which it considers a matter of national interest.

Disclaimer: while every effort has been made to ensure that the information in this newsletter is correct, it is drawn from open source reporting and the New Zealand High Commission accepts no liability for its accuracy, nor for any actions or omissions taken on the basis of this information.

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