8 November, 2010— "Solomon Islands Growth Prospects – Constraints and Policy Priorities" was prepared in response to a request for assistance in identifying new sources of growth, employment, revenue, and foreign exchange following the expected decline in logging by 2014.

The report warns that examples of rapid and sustained economic growth globally are rare. The Pacific Island Countries face particular disadvantages, due to their small size and large distance to major markets. Solomon Islands may face especially severe constraints, as its scattered population reduces access to infrastructure and increases the costs of transport.

The report states that prospects for economic development in Solomon Islands will be significantly improved if four key potential sources of growth are prioritized. These areas include:

• Increasing productivity in agricultural production, on which most Solomon Islanders will continue to rely
• Ensuring that major natural resource industries - including mining and tourism – are well regulated, so that benefits flow to Solomon Islanders
• Increasing labor mobility, with Solomon Islanders having increased opportunities to acquire skills and incomes from work in Australian, New Zealand and other overseas economies
• Improving the administration of aid, with more predictable flows of resources and capacity, with mutual accountability for results.

According to the report, economic growth is likely to be concentrated in urban centers, areas of high agricultural production, and areas with natural resource potential.

The report points out that the benefits of this growth can be spread more equitably if efforts are made to connect rural populations to urban markets and carefully target investment in services and infrastructure where economic activity is taking place.