The Solomon Islands economy has experienced steady growth over the last two years. Derek Aihari, Director of InvestSolomons tells Business Advantage PNG that the country is looking to develop its already close links to Papua New Guinea.

The Heritage Park Hotel in Honiara. Credit: Heritage Park.

Business Advantage PNG (BAPNG): What are the most important sectors in the Solomon Islands?

Derek Aihari (DA): We mainly depend on fisheries and agriculture as our main sectors. We also rely on forestry.

BAPNG: The Regional Assistance Mission to Solomon Islands (RAMSI) ended in June 30 of this year. How has this affected the country?

InvestSolomons’ Derek Aihari

DA: During the times when RAMSI was with us it brought in a number of good things, including improvements in security and also the general environment in terms of improving the social sector – as well as the economic reforms we underwent. We are confident that we will continue after they have left.

Over the last few years—since the problems we have had—we have recovered. We have been travelling steadily over the last two years, with growth of 3-4 per cent.

BAPNG: What are the main PNG companies doing business in the Solomons?

DA: I think PNG is ranked third in terms of foreign direct investment for the Solomon Islands. One of the investments is Guadalcanal Plains Palm Oil, which is originally from Papua New Guinea [New Britain Palm Oil]. In the services sector, we have Bank South Pacific (BSP) with us—they took over the role of Westpac. Also Credit Corporation, another financial institution. In the tourism sector, we have one of the biggest hotels in Honiara: the Heritage Park, which I am proud to say while with this agency I brought into Honiara. We also have a number of PNG investments in retail.

BAPNG: Why are so many PNG companies interested in doing business in the Solomons?

DA: I would say that PNG is the closest sister, the big sister, in terms of locality. PNG companies come to the Solomons because of the traditional ties we have. We have blood ties, we can talk the same language. One of the ideas we have is that, because it is so close, we can build some residences in Solomons. They can fly to PNG, work and come back in the afternoon for a rest.

BAPNG: The Solomons are also getting more choice in the financial services sector?

DA: We have established two more banks in the Solomons: Pan Oceanic Bank from Sri Lanka and Bred Bank from Vanuatu, which is a French company. So there is some improvement in banking services.

BAPNG: What is the regulatory framework like? How easy is it for foreign companies to set up?

DA: We have undergone some reforms. Last November, we improved the system of registration. We now have an online registry system. It will make it easier for foreigners to register, as well as locals, and incorporate a company or list a business name. It is easier now for foreign and local investors to register an entity and run a business.

BAPNG: What are main sectors you are looking at promoting to the international business community?

DA: The growth is in the services sector. One of the ideas is to promote the tourism sector, as well as the mining and minerals sector. We have a number of reforms going on at the moment. The government has a plan to develop a Special Economic Zone, where we can offer incentives. We have a tuna cannery and we are currently looking at one more in Malaita Province, the biggest province in the Solomons. Work is underway. Very soon we will be looking at investors to come and develop that place.