Papua New Guinea and the Solomon Islands face similar challenges and opportunities. Atenasi Ata, CEO of the Solomon Islands Chamber of Commerce and Industry, tells us why both countries are particularly well-placed to do more business with each other.

The economy of the Solomon Islands was slow during the first half of 2019 because the country had national and provincial elections but Atenasi Ata, CEO of the Solomon Islands Chamber of Commerce and Industry (SICCI), suggests its economy will pick up in 2020. The Asian Development Bank is predicting a steady 2.7 percent GDP growth for the country in 2020.

The link between Papua New Guinea and the Solomon Islands goes beyond location and cultural heritage. Both nations share similar development goals, including delivering better power generation and internet connectivity to the provinces and further developing their tourism capacity, explains

The Coral Sea Cable, which links Sydney to Honiara and Port Moresby, will help both Melanesian countries address some of these issues and could strengthen their already close relationship.

Ata, who used to work for the Australian Department of Foreign Affairs and Trade before joining SICCI, says that the Coral Sea Cable will open up opportunities for business in the Solomon Islands, although ‘spreading it out to the provinces’ presents a challenge, as it does in PNG.

‘For the Government, [the cable] is about social impact and outcomes; for businesses, it’s again an opportunity to expand,’ explains Ata.

The Coral Sea Cable is not the only telecommunications development in the Solomon Islands. Another cable connecting Port Vila and Honiara is progressing and the government has commissioned two Solomons-specific satellites.

Doing business together

PNG is one of the main investors in the Solomon Islands, with over 50 PNG companies operating in the country, including New Britain Palm Oil, Credit Corporation and Bank South Pacific. Together they employ over 5,000 Solomon Islanders.

The PNG-owned Heritage Park Hotel is one of the leading hotels in the Solomons and an example of what can be achieved in terms of growth and investment when both countries do business together, with the Solomons needing to increase its room supply to grow as a tourism destination. The Solomon Islands Tourism Promotion Board is promoting the country internationally, appealing (as PNG also does) to those interested in bird watching, diving and World War 2, says Ata.

Power is key to regional success

Work at the Construction Campsite along Malango Junction Tina Lot I commenced on 12 December. Credit: Tina River Hydro Project/Facebook

Just like in PNG, electricity in the Solomon Islands is concentrated in its capital city, Honiara.

‘Businesses do look for the opportunity to expand into the provinces but right now that’s not happening [due to lack of electricity]. Getting cheaper and more reliable electricity will help ease the cost of doing business,’ explains Ata.

After 10 years of negotiations, the country is now closer to the development of the Tina River Hydro Development Project, which in September 2019 got a US$18-million-dollar loan from the Asian Development Bank (ADB). The 15MW hydropower plant project’s current partners include the Australian Government, the Green Climate Fund, the Abu Dhabi Development Fund, the Export-Import Bank of Korea and the World Bank.

The Tina River project has taken over 10 years to begin because 85 per cent of the land in the Solomons is customarily-owned and the organisations needed to work with and around the landowners.

‘Before this [Tina River] they’ve never had a reason to come together as commercial entities,’ explains Ata.