Solomon Islands

The purpose of this Country Strategy Paper (CSP) is to provide a framework for EC co-operation with Solomon Islands under the Cotonou Agreement. The framework is based on global objectives of EC-ACP co-operation, Solomon Islands own development policy, an analysis of the political and economic situation in the country, and an assessment of the past co-operation programmes of the EC and other donors. It concludes with the proposed EC response strategy of the 10th EDF and a National Indicative Programme (NIP).

The Solomon Islands is a country located east of Papua New Guinea and is made up of over 990 islands with a total land area of 27,990 km² and an ocean area within an exclusive economic zone of 1.34m km². The official estimate of the population is about 482,000, and the annual growth rate is high at around 2.8%.

The Solomon Islands (SI) has a recent history of conflict that broke out in particular in the period of the "tensions" in 1999-2003, and in the riots in the capital Honiara in April 2006. A weak democratic system compounded by endemic corruption and a youthful population that is poorly educated and lacks economic opportunities are the causes of this fragility. A regional force (Regional Assistance Mission to Solomon Islands, RAMSI) has played a prominent role in restoring the rule of law, improving the machinery of government and introducing economic reforms since July 2003, but there is still much to do in all of these areas. While appreciated for maintaining law and order, RAMSI has been perceived by some as taking control of key SI institutions, and setting the framework for future development.

Elections held in April 2006 were considered fair and peaceful. However the subsequent selection of Prime Minister by the parliament led to a serious crisis resulting in widespread rioting in Honiara (and Auki, the capital of Malaita) requiring the intervention of additional RAMSI military forces; the selected PM resigned and the current one was appointed.

On the economic front, recovery has continued since 2003, with real GDP growth estimated at 6.2% in 2006, and GDP per capita at € 453, but the economy is heavily dependent on unsustainable logging (resource risk to be depleted by 2012 according to the IMF) and relatively massive donor support.

Under the 10th EDF the A envelope (programmable funds) is € 13,200,000 and the B envelope (funds for unforeseen needs) € 3,300,000. The focal sector is proposed to be sustainable rural development with attention to capacity building for rural development. The indicative allocation for the focal sector is €11,220,000 (85% of envelope A). The indicative allocation for other programs in the non focal sector is € 1,980,000 (15 % of envelope A), which includes support to the NAO and a Technical Cooperation Facility from which necessary Technical Assistance, studies and essential EDF-related activities will be funded.