Australia’s
regional intervention (backed by military force) in the Solomon Islands
is an episode often portrayed in a favourable light, but it can’t be
going to plan. And while that won’t matter much to those few investors
in the Solomons, including ANZ Bank and Westpac, the riots may be a
disappointing turn for those investors backing a recovery based on
political reforms and Australian and New Zealand economic assistance.

The Regional Assistance
Mission Solomon Islands – or RAMSI – is the second act of regional
military intervention by Australia’s 10-year old coalition government.
Though notionally a creation of the South Pacific forum, RAMSI is
largely a creature of Australian foreign and defence policy, and one
undertaken with reluctance.

Local
criticism of RAMSI relates to the concentration of development
assistance in and around Honiara, as well as the limited training of SI
locals in skilled work now undertaken by expatriates. RAMSI’s work
program consists of plenty of aid in essentials, in social services and
infrastructure, as well as developing skills and lifting probity
standards in government.

Kick starting the Solomons’ economy
remains a top goal of locals and RAMSI, with aspirations to foster a
diversification in the economy away from the four primary commodities
(timber, copra, cocoa and fish). Some economic sectors are making
progress, with private investment rising in sectors such as village
hydroelectric projects and inter-island travel, both enablers of other
commerce.

Many aspects of the Solomons’ economic infrastructure, however, are in need of investment.

Until
recently lollies were a common cash substitute in commercial
transactions in the Solomon Islands. A shortage of coins led some
shopkeepers to offer change in the form of sweets. Thanks to Australian
aid, the central bank has since early this year had a larger supply of
coins in circulation, so at least some things are changing.

Peter Fray

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