Solomon Islands Development Policy Operation 1

closed

Solomon Islands are a fragile, post-conflict small island state and the poorest in the Pacific when measured in terms of Gross Domestic Product (GDP) per capita. Most of the population continues to be dispersed across rural areas of the archipelago, where they largely depend on subsistence agriculture. This caps food poverty rates, but exposes the population to environmental shocks. Poverty rates are higher in urban areas, where traditional safety nets are weaker and unemployment rates are high. A former British protectorate, the country became independent in 1978 and enjoyed twenty years of moderate but sustained economic growth and improvement in social indicators. The grant is the first in a series of two development policy operations in support of Solomon Islands transition from post-conflict recovery to sustainable development in the context of its National Development Strategy (NDS). The operation will support the following World Bank Interim Strategy Note (ISN) objectives: (a) address fiscal and balance of payments pressures through the provision of financing and through the attendant participation in the policy dialogue; (b) update the mining sector regulatory and institutional framework and seek participation in the Extractive Industries Transparency Initiative (EITI); and (c) improve the effectiveness, efficiency, and planning of public spending. The operation complements similar support, cited above, provided by the Asian Development Bank (ADB) and the European Commission (EC).