politics
Solomons In A State Of Paralysis
Print More Money and The Country Could Collapse
A chronic money shortage has paralyzed much of the Solomon Islands government. In late February aid donors were due to meet in Honiara to hear appeals from the gasping government of Manasseh Sogavare for the millions of dollars of financial bracing the country needs desperately to recover from the 20-month small civil war on the island of Guadalcanal.
The government dispatched a mission to Taipei in February to plead for a S$300 million (US$69 million) rescue loan. The Solomon Islands Central Bank has warned the government that if it continues to print money at the rate that it is doing what remains of the country’s financial structure could collapse.
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The government’s chronic money woes were caused by the cessation of the gold, fish, oil palm and log exports from which it derives most of its revenue. They were compounded by its weakness in bowing to demands for millions of dollars of “compensation” from parties involved in, or claiming to have been hurt by, the militant Guadalcanal and Malaita gangs that fought each other in rural areas around Honiara.
From early February it was impossible to reach many government offices because their phones were disconnected by Solomons Telekom, which was owed more than S$4 million (US$920,000) by government. Honiara sources told Pacific Magazine that the government set up as a coalition after the forced resignation last June of the former government, virtually at Malaitan rebel gunpoint, had little or no credibility left. “Sogavere is dominated by Charles Dausabea, who is backed by the Malaita militants,” one commentator said.
