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Solomon Islands Country Profile 2004 Solomon Islands This Country Profile is a reference work, analysing the country’s history, politics, infrastructure and economy. It is revised and updated annually. The Economist Intelligence Unit’s Country Reports analyse current trends and provide a two-year forecast. The full publishing schedule for Country Profiles is now available on our website at http://www.eiu.com/schedule The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where its latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 60/F, Central Plaza London 111 West 57th Street 18 Harbour Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1007 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7830 1023 Fax: (1.212) 586 0248 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.eiu.com Electronic delivery This publication can be viewed by subscribing online at www.store.eiu.com Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, on-line databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright © 2004 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. ISSN 1460-7093 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. Comparative economic indicators, 2003 Gross domestic product Gross domestic product per head US$ bn US$ ’000 Australia 506.8 Australia 25.5 New Zealand 78.2 New Zealand 19.5 Papua New Guinea Fiji(b) Fiji(b) Samoa(b) Solomon Islands(a) Tonga(b) Samoa(b) Vanuatu(b) Vanuatu(b) Papua New Guinea Tonga(b) Solomon Islands(a) 012345 0.0 0.5 1.0 1.5 2.0 (a) 2001. (b) 2002. (a) 2001. (b) 2002. Sources: Economist Intelligence Unit estimates; national sources. Sources: Economist Intelligence Unit estimates; national sources. Gross domestic product Consumer prices % change, year on year % change, year on year Solomon Islands Papua New Guinea Fiji Tonga Samoa Solomon Islands New Zealand Vanuatu Australia Australia Papua New Guinea New Zealand Tonga Samoa Vanuatu Fiji -6 -4 -2 0 2 4 6 -6 -3 0 3 6 9 12 15 Sources: Economist Intelligence Unit estimates; national sources. Sources: Economist Intelligence Unit estimates; national sources. Country Profile 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 Solomon Islands 1 Contents 3 Regional overview 3 Membership of organisations 5 The regional economy 8 Basic data 9 Politics 9 Political background 10 Recent political developments 11 Constitution, institutions and administration 12 Political forces 12 International relations and defence 12 Resources and infrastructure 12 Population 13 Education 13 Health 13 Natural resources and the environment 13 Transport, communications and the Internet 14 Energy provision 14 The economy 14 Economic structure 15 Economic policy 15 Economic performance 16 Economic sectors 16 Agriculture 16 Mining and semi-processing 16 Manufacturing 17 Financial services 17 Other services 17 The external sector 17 Tra d e i n go od s 18 Invisibles and the current account 18 Capital flows and foreign debt 18 Foreign reserves and the exchange rate 20 Appendices 20 Sources of information 20 Reference tables 20 Government finances 21 Money and credit 21 Real gross domestic product by industrial origin 21 Inflation 22 Output of selected products 22 Visitor arrivals 22 Main exports 22 Main imports 23 Main trading partners © The Economist Intelligence Unit Limited 2004 www.eiu.com Country Profile 2004 2 Solomon Islands 23 Balance of payments, IMF series 24 External debt 24 Net official development assistance 24 Foreign reserves 25 Exchange rates Country Profile 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 Solomon Islands 3 Solomon Islands Basic data Land area 27,556 sq km Population 409,042 (1999 national census); 508,000 (July 2003 Asian Development Bank estimate) Major islands Guadalcanal, Choiseul, Santa Isabel, New Georgia, Malaita, San Cristobal Capital Honiara (population 49,107 in 1999), on Guadalcanal Climate Tropical, maximum temperature 31°C; cooler season April to November. From November to April higher temperatures, occasionally accompanied by cyclones Weather in Honiara Average rainfall 2,290 mm per year Languages English (official language), Pidgin, 87 local languages also in use Measures Imperial and metric Currency Solomon Islands dollar (SI$)=100 cents. Average exchange rate in 2003: SI$7.51:US$1. Exchange rate on September 6th 2004: SI$7.43:US$1 Time 11 hours ahead of GMT Public holidays, 2005 January 1st (New Yearrs Day); March 25-28th (Easter); June 10th (Queenrs Official Birthday); July 7th (Independence Day); December 25th (Christmas Day); December 26th (National Day of Thanksgiving) © The Economist Intelligence Unit Limited 2004 www.eiu.com Country Profile 2004 4 Solomon Islands Politics The Solomon Islands gained independence from the UK in 1978. Standards of governance were poor from the start, but mismanagement by the government of Solomon Mamaloni during the mid-1990s led to a financial crisis. This exacerbated long-simmering ethnic hostilities between the people of Guadalcanal (the largest island) and the many thousands from Malaita, who had moved to Guadalcanal, especially to the capital, Honiara, and the sur- rounding areas. Malaitans came to dominate the public service and the police and, by the end of the decade, the hostilities had developed into militia warfare. A reform-minded government, led by Bartholomew (Bart) Ulufaralu, was elected in 1997, but an armed Malaitan militia forced the government from office in June 2000 and installed an administration led by the former opposition leader, Manasseh Sogavare, who had also been finance minister in the Ulufaralu government. Threatened with the loss of international financial support unless the government was legitimised, Mr Sogavare called a general election in December 2001, in which his Peoplers Progressive Party (PPP) saw its number of seats reduced to two. A new coalition government was installed under Sir Allan Kemakeza, the leader of the Peoplers Alliance Party (PAP). Under his leadership, the Solomon Islands government began to disintegrate in the face of renewed ethnic conflict and growing lawlessness. Law and order was restored following the intervention in July 2003 by the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI), at the request of Sir Allan, and the main focus for the Solomon Islands is now on repair, rehabilitation and economic development. Political background Post-independence rulers set In the ten years following independence the Solomon Islands had three prime poor standards ministers. The first was Peter Kenilorea, who had been chief minister at the time of independence. He was succeeded in 1981 by Solomon Mamaloni, also a former chief minister, but returned to office in 1984. Mr Kenilorea resigned in 1986 after allegations that he secretly accepted French aid for repair work in his home village. He was replaced by Ezekiel Alebua, who held the post until 1989, when Mr Mamaloni became prime minister again. After the 1993 election a number of opposition parties combined to form the National Coalition Partners (NCP), with the sole aim of removing Mr Mamaloni from power. The NCP nominated Francis Billy Hilly, an independent, for the post of prime minister and he was duly elected. But he lost office in October 1994 as a result of an attempt to reduce the highly lucrative, but unsustainable and illegal, rates of logging that had developed throughout the country. Some members of his coalition shifted allegiance to Mr Mamaloni, leader of the Solomon Islands National Unity, Reconciliation and Progressive Party, who then became prime minister once again. Country Profile 2004 www.eiu.com © The Economist Intelligence Unit Limited 2004 Solomon Islands 5 Mr Mamaloni presided over a period of mismanagement that all but Mr Ulufa’alu seeks to secure bankrupted the country and caused widespread public disillusionment with aid donor support politics. The desire of the population for change led to a large number
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