Catalog

	Table of Contents
p. 29 of 38 BACK | NEXT Country Reports Afghanistan Azerbaijan Bangladesh Bhutan Cambodia People’s Republic of China Cook Islands Fiji Islands India Indonesia Kazakhstan Kiribati Republic of Korea Kyrgyz Republic Lao People’s Democratic Republic Malaysia Maldives Marshall Islands Federated States of Micronesia Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Solomon Islands Sri Lanka Tajikistan Thailand Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam

Annual Report 2001

---

Solomon Islands

Economic performance

Further to the contraction in 2000, real GDP in Solomon Islands declined by an estimated 5.0% in 2001. The contraction was broad-based. A positive development in the latter part of 2001 was the resumption of fresh fish exports and sale of canned fish. Annual average inflation was 8.0%, reflecting the disruption of economic activities. Government expenditure continued to increase while tax collection remained weak, mainly due to a decline in economic activity and discretionary grants of tax and duty remissions. As a result, the budget deficit rose to 8.0% of GDP. Faced with increasing arrears, the Government exceeded the statutory limit of borrowing from the central bank during the year. Broad money supply and credit to the private sector declined by 12.5% and 21.5%, respectively, reflecting the low demand for new credit due to weak economic activity. The trade deficit widened due to a sharp decline in exports, and the current account recorded a deficit of 14.3% of GDP. At end–2001, the official reserves were sufficient to cover only about one month of imports.

ADB operations

Operational strategy: After suspension of operations following a coup in 2000, ADB resumed limited operations in 2001 to assist Solomon Islands in restructuring basic infrastructure damaged by civil unrest. The objectives of ADB’s interim strategy for Solomon Islands are to support the Government in restoring essential facilities and services through the Post-Conflict Emergency Rehabilitation loan, postpone the country programming exercise, and finish any minor activities under ongoing or almost completed technical assistance projects to facilitate project continuity and closure. The strategy will be reviewed in early 2002.

Policy dialogue: ADB has helped the Government rehabilitate basic infrastructure. It has also highlighted the need to prioritize issues such as law and order, good governance, and sound public financial management. Moreover, ADB has been concerned about the Government’s delivery of basic public services in light of the political and socioeconomic difficulties the country is facing. Overall, the temporary suspension of country programming has limited effective dialogue with the Government on a medium-term assistance program.

Loans and technical assistance: No loans or technical assistance were approved in 2001.

Project implementation: Since joining ADB in 1973, Solomon Islands has received 16 loans, of which 2 were active at the end of 2001. Contract awards totaled $1.1 million, bringing the cumulative figure to $54.8 million. The contract awards ratio was 10.7%, lower than the ADB-wide average of 14.8%. Disbursements during the year totaled $10,000, bringing cumulative disbursements to $54.1 million. The disbursement ratio was 0.1%, lower than the ADB-wide average of 20.5%.

____________________________

Back Samoa	Next Sri Lanka