22 May 2016

Private sector assessment for Solomon Islands released

Further reforms to Solomon Islands business environment are needed to attract investment that will diversify the economy and grow the private sector, says PSDI’s private sector assessment (PSA) for Solomon Islands.

CLICK HERE to listen to PSDI's Paul Holden discuss Solomon Islands' reform achievements and the recommendations of this private sector assessment in an interview with Radio Australia's Pacbeat program. 

The report, Continuing Reforms to Stimulate Private Investment: A Private Sector Assessment for Solomon Islands, identifies reform initiatives previously undertaken by the Government of Solomon Islands as having enhanced the country’s business environment. It recommends further measures to attract investment and promote formal sector employment that can help alleviate poverty and promote growth.

“Solomon Islands has implemented many private sector development-oriented reforms that have secured tangible benefits for its economy and people,” said Hayden Everett, Senior Country Specialist at ADB’s Pacific Liaison and Coordination Office. “Building on those achievements and making it easier for businesses to start-up and grow in the formal economy offers a sustainable way to accelerate economic growth and improve livelihoods.”

The report provides a snapshot of Solomon Islands current business environment, with a particular focus on constraints to private sector investment and growth. It proposes responses to a range of challenges affecting the environment, including improving the financial system, making state-owned enterprises more efficient, enhancing access to skilled labor, promoting women’s economic empowerment, supporting competition, and modernizing the tax system.

The recommendations aim to inform discussions on future reform initiatives, with the report noting that capacity constraints will limit responses initially available to the government and the business community.

The report builds on a 2005 PSA for the country prepared by the ADB. It is the first of four PSAs PSDI is producing for Pacific island countries this year. PSDI's private sector assessments focus on institutional and policy reforms needed to remove constraints to broad-based private sector growth.