Find a business in Solomon Islands
The economy of Solomon Islands is still largely based on agriculture, fishing and forestry but the services sector is now an important part of the nation’s GDP, accounting for 62% (2010). The archipelago in the south-west Pacific is rich in undeveloped mineral resources such as lead, zinc, nickel and gold but most manufactured goods and petroleum products must be imported. It has a GNI per capita of US$1,130 (2012), but has seen GDP growth of 5.1% per annum in 2008-12. However, the economy remains relatively small and undiversified, and very dependent on exports of timber and logs.
The majority of the population depend, at least in part, on the agriculture, forestry and fisheries sectors for their incomes. The country’s agriculture exports amount to approximately $45 million, representing over 20% of total exports (2011). Among the country’s agricultural produce are cocoa beans, coconuts, palm kernels, rice, potatoes, vegetables, cattle, pork and fruit. The United Nations Food and Agriculture Organisation estimates there to be over 360,000 people involved in the country’s agricultural sector.
The forestry sector is a significant contributor in terms of revenue for the country and a major source of employment. The logging industry also plays a significant role in the country’s economy. Forests covered almost 79% of the country’s total land mass in 2012. Wood fuel and industrial roundwood are the main commodities produced by the sector.
The mining and minerals sector of Solomon Islands has experienced a turbulent history in recent years, as all production ceased in 2000 due to civil strife and land ownership disputes. Gold has been an important source of GDP for the country and in 1999 production peaked at 150,000 ounces; the Gold Ridge mine in Guadalcanal was the source of much of this. Allied Gold, which currently owns the Gold Ridge mine, resumed production in 2011. In recent years the potential of the country’s palm and coconut oil industries to produce biofuels has been recognised. An example is Solomon Tropical Products who began commercially producing biodiesel from coconut oil in 2010.
Prior to the arrival of the Regional Assistance Mission to the Solomon Islands (RAMSI), the island had been plagued by severe ethnic violence at the end of the 1990s; key businesses closed and the government was effectively broke. These factors combined to cause a complete economic collapse. RAMSI’s efforts to restore law and order and economic stability have led to modest growth as the economy rebuilds in the 2000s. However, this growth was halted by the global slowdown of 2008-09 leading to a contraction of 1.2% in 2009, but the economy bounced back with growth of 7% in 2010.
As an archipelago composed of 922 islands, Solomon Islands is located along five major shipping routes and rely heavily on shipping for transport and cargo. There are two main international ports, a deep-water port at Honiara on the island Guadalcanal and a smaller port at Noro on New Georgia. The international airport is at Henderson Field on Guadalcanal, 13 km of Honiara. The airport is served by a few international and domestic airlines. There are 1,390 km of roads, but only 2.4% of roads are paved and heavy rainfall makes road conditions unpredictable.
Solomon Islands are ranked 25th in the world for paying taxes, according to the World Bank’s ‘Doing Business 2012’ study. But they are ranked eighth best in the East Asia and Pacific region for the overall ease of doing business. These rankings measure the conduciveness of a regulatory regime in starting and operating a business.
There is an adult literacy rate of over 76% (2006) for the double chain of rocky islands. Over 80 indigenous languages are spoken but all education in the country is in English, and professional and managerial Solomon Islanders speak it fluently.