The Solomon Islands economy is poised to receive a significant boost as it prepares to host the Pacific Games from 19 November to 2 December. The government aims to attract over 5,000 visitors during the event, generating approximately A$60 million in tourism revenue. The previous Pacific Games held in Samoa brought in approximately A$45 million to its economy.
To successfully host the event with participants from 24 nations, the government plans to spend A$540 million on constructing and renovating sports facilities, roads, airports, and other necessary infrastructure. Furthermore, substantial private sector investments in accommodation and tourism are already underway.
ANZ Bank Pacific Economist Kishti Sen believes there is ample opportunity to develop subcontracting capacity given the abundant human resources. The Games infrastructure will require facilities management for years, which can be provided by locally trained manpower. However, a post-Games financial strategy is necessary to effectively manage these facilities.
Sen suggests that the Solomon Islands has the potential to develop a thriving mixed economy, especially with supportive infrastructure and reduced business costs, accelerating the transition to a balanced economy.
Australia remains the largest aid donor to the Solomon Islands, providing A$161 million in 2021-22, along with financial and technical assistance for significant infrastructure projects in sustainable energy generation, climate resilience, roads, and ports. The Tina River hydropower transmission system, a renewable energy project, receives A$32 million from the A$1.2 billion AIFFP fund for the Pacific.
Post pandemic scenario
The Solomon Islands’ recovery journey is gaining momentum, with the upcoming Pacific Games poised to significantly boost the economy and provide opportunities for sustainable development in various sectors.
Remittances from seasonal workers are experiencing impressive growth, with more workers engaged in the sector in Australia. The country’s foreign reserves are robust, covering imports for 10 months, well above the six-month threshold, primarily due to donor funds rather than trade or investment, according to Central bank Governor Luke Forau.
He states that the outlook is positive for the mining industry, while fisheries and agriculture show promising signs of recovery. Agriculture exports are expected to triple in the next five years, especially in cocoa, coconut, and palm oil production.
Investments in fisheries, such as the multi-million dollar tuna processing plant in Malaita province, are projected to boost revenues by S$3.5 million and create 5000 new jobs, according to the International Finance Corporation. The Solomon Islands, possessing one of the world’s largest tuna fishing grounds, is a major global supplier of tuna.
The mining sector, supported by the country’s rich natural resources including gold, copper, and nickel, has long attracted significant foreign investment. Government sources indicate signs of renewed interest in the sector.