Accelerating Practical Digital Development in the Solomon Islands

Report No: AUS0002066

Public Disclosure Authorized

Public Disclosure Authorized

October 2020 . Digital Development Department

East Asia and Pacific Region

Public Disclosure Authorized

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Contents

EXECUTIVE SUMMARY 1 I. NOTE FOR THE READER- A FRAMEWORK FOR DIGITAL DEVELOPMENT ASSESSMENT 1 A. Introduction ...... 1 B. Description of Framework Components ...... 2 1. Prevailing Factors ...... 2 2. Enablers ...... 2 3. Digital Economy Strategic Outcomes ...... 3 4. Digital Government Elements ...... 3 5. Strategic Digital Government Outcomes ...... 4 II. REALIZING VALUE FROM A DIGITAL ECONOMY IN THE SOLOMON ISLANDS 5 A. Best practices from beyond the borders: how countries drive growth from the digital economy ...... 5 B. Digital economy maturity and development opportunities in the Solomon Islands ...... 10 1. Digital Transformation of Industries ...... 13 2. E-Commerce and Logistics ...... 16 a. Sector Specific Focus: Tourism ...... 21 b. Sector Specific Focus: Agriculture ...... 23 c. Sector Specific Focus: Fisheries ...... 25 3. Trade Logistics and Trade Facilitation ...... 26 4. Financial Technologies (FinTech) ...... 29 5. ICT Sector ...... 31 6. Digital Entrepreneurs...... 32 III. DIGITAL GOVERNMENT – DELIVERING PUBLIC VALUE AND STIMULATING DIGITAL ECONOMY DEVELOPMENT 34 A. Digital Government Strategic Outcomes ...... 34 B. Digital Government Program Elements ...... 36 1. Strategy and Planning ...... 36 2. Governance and Management ...... 39 3. Architecture, Processes, and Standards ...... 42 4. Technology Infrastructure ...... 44 5. Information Systems and Data ...... 47 IV. FOUNDATIONAL ENABLERS OF DIGITAL ECONOMY AND DIGITAL GOVERNMENT: STATUS AND ISSUES 50 A. Legal and Regulatory Environment ...... 50 B. Policy, Planning and Institutional Environment ...... 54 C. ICT Infrastructure, Access, and Connectivity ...... 57 D. Cybersecurity ...... 61 E. Digital Skills and Awareness ...... 62 F. Digital Identification ...... 66 G. Digital Payments ...... 68 ANNEX 1 - Digital Government and Digital Economy Prevailing Factors 73 ANNEX 2 - Solomon Islands Digital Economy Workshop Report 79 ANNEX 3 - List of Institutions Consulted 80

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List of Acronyms

ATS Automated Transfer System

BMCL Bemobile Company Limited CBSI Central Bank of Solomon Islands CSD Central Securities Depository DFAT Department of Foreign Affairs and Trade FXBC DATEC Datec Solomon Island Limited MCA Ministry of Communication & Aviation MCILI Ministry of Commerce, Industry, Labour and Immigration MEHRD Ministry of Education and Human Resources MFAET Ministry of Foreign Affairs & External Trade MHMS Ministry of Health and Medical Service MoFT Ministry of Finance and Treasury MPS Ministry of Public Service OAG Office of the Attorney General PMO Prime Minister’s Office SISCC Solomon Submarine Cable company SIVB Solomon Islands Visitor Bureau SP Solomon Post STCL Solomon Telekom Company Limited TCSI Telecommunications Commission of the Solomon Islands

EXECUTIVE SUMMARY

There is broad consensus within the Solomon Islands Government (SIG), the Solomon Islands business community, and among its development partners regarding the potential contribution of digital technologies (information and communication technologies/ICT) to the Solomon Islands’ social and economic development. The recent approval of the National ICT Policy, in close alignment with the National Development Strategy, confirms that consensus and provides a clear statement of strategic intent with respect to the nationwide deployment and management of ICT.

The SIG, with support from the Government of Australia, has invested US$136 million1 in a new submarine cable system connecting Honiara to Sydney and four islands in the archipelago to Honiara; the Coral Sea Cable (CS2) was declared ready for service on February 1, 2020. The new cable is expected to be a key catalyst and accelerator for the contribution of digital technologies to the Solomon Islands’ development when domestic connectivity beyond the cable landing is available. The expectation is that this investment will deliver faster and cheaper internet services over current service and enable for the first time Internet to the large rural population, creating new opportunities for the country with vastly improved access to the internet. The new access will further enable businesses across the islands to access global markets and participate in global supply chains. It will enable new business models and digitization of current operations. Citizens will be able to complete government procedures (registrations, licenses, taxes, etc.) from their homes or their phones. Healthcare providers will be able to get remote support from specialists and order medicines and supplies online. Students will be able to complete online courses and access the worldwide body of knowledge. Citizens will also have access to a wide range of entertainment and social media activities, further expanding their domestic and international awareness and quality of life.

But a great deal needs to happen before these opportunities can be realized for the Solomon Islands. High-speed access to the internet from a handful of points across the country is just the beginning. Access needs to be distributed out to ‘the last kilometer’. Digital government systems need to be developed and implemented. New laws governing electronic transactions and related issues need to be written and existing laws updated. Processes and operations of both businesses and government need to be changed to accommodate and leverage the global mesh of interconnected digital processes and resources. People need to develop digital awareness and skills.

This endeavor will require substantial investment. It is also going to require collaboration, coordination, and the concerted effort of organizations and individuals across the entire spectrum.

This report provides an overview of the current situation and a set of recommendations to accelerate digital development in the Solomon Islands, based on a review of available data and consultations with key stakeholders. It aims to identify priority policy/regulatory requirements, recommended actions, and possible investment/support opportunities. The scope covers:

1 SSC presentation to World Bank team, November 2018.

▪ Digital economy, defined herein as the broad range of business and economic activities that arise from ICT and use digitized processes and information as factors of production ▪ Digital government and the deliv