19 June 2015
Bringing Business to Solomon Islands
The highlight of this week for me has been the seventh Australia Solomon Islands Business Forum. This year’s was the first ever to be held in Honiara – the first six were all held in Brisbane. And by the end of proceedings on Wednesday night, it was universally proclaimed as the best forum ever.
That’s largely because of the much greater participation by Solomon Islanders than has been possible when the forum is held in Brisbane. Prime Minister Sogavare led the way by spending more than half a day at the forum, and many of his ministers and senior staff followed suit. That meant that Australian businesses could engage directly with members of the government, exchanging information, ideas and concerns.
I was struck by the sense of optimism that pervaded all the discussions. Central Bank Governor Denton Rarawa started the trend by pointing out that Solomon Islands’ macroeconomic indicators – things like debt levels, inflation, growth and so on – are all actually quite strong.
Many other presenters – including SIEA, Kokonut Pacific and Soltuna - spoke of their recent and ongoing successes in Solomon Islands. And we heard of even more enterprises where there is great potential for success over the next few years, including Axiom’s nickel development in Isabel and the Tina River Hydro project.
One of the most engaging discussions was on the tourism sector. Those of us lucky enough to live here can see the enormous potential of Solomon Islands as a major tourist destination. But as a tourism sector expert from the International Finance Corporation reminded us, tourism is a highly competitive industry. Solomon Islands is in direct competition with places like Fiji, Vanuatu and New Caledonia – and that’s just in the Pacific. Just because Solomon Islands has great natural beauty doesn’t automatically mean that tourists will come here.
So the big question is this – what is Solomon Islands competitive advantage in tourism? To my mind, the answer came in a presentation from Carnival Cruises, which carries a million Australians on cruises each year, mostly in the Pacific.
We learned that Australia is the world’s fourth largest cruise market and the fastest growing. We learned that Carnival is looking for new destinations in the Pacific and is interested in expanding operations in the Solomons if the right conditions are met. And our presenter pointed out that Solomon Islands is actually closer to Australia than many other destinations in the Pacific.
That looks very much like a natural competitive advantage. Solomon Islands suddenly finds itself right next door to a big, fast-growing market and with the right natural assets to supply that market. I can’t think of too many other sectors where Solomon Islands enjoys such a big advantage over its competitors. The challenge now is to make the most of that advantage and turn it into sustainable jobs and income for Solomon Islanders.