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Economy
Economy of the Solomon Islands
Its per capita GDP of $600 ranks Solomon Islands as a lesser developed nation,
and more than 75% of its labor force is engaged in subsistence and fishing. Most
manufactured goods and petroleum products must be imported. Until 1998, when
world prices for tropical timber fell steeply, timber was Solomon Islands main
export product, and, in recent years, Solomon Islands forests were dangerously
overexploited. Other important cash crops and exports include copra and palm
oil. In 1998 Ross Mining of Australia began producing gold at Gold Ridge on
Guadalcanal. Minerals exploration in other areas continued. However in the wake
of the ethnic violence in June 2000, exports of palm oil and gold ceased while
exports of timber fell. The islands are rich in undeveloped mineral resources
such as lead, zinc, nickel, and gold.
Exploitation of Solomon Islands' fisheries also offers prospects for export and
domestic economic expansion. However, a Japanese joint venture, Solomon Taiyo
Ltd., which operated the only fish cannery in the country, closed in mid-2000 as
a result of the ethnic disturbances. Though the plant has reopened under local
management, the export of tuna has not resumed. Negotiations are underway which
may lead to the eventual reopening of the Gold Ridge mine and the major oil-palm
plantation.
Tourism, particularly diving, is an important service industry for Solomon
Islands. Growth in that industry is hampered, however, by lack of infrastructure
and transportation limitations.
The Solomon Islands Government was insolvent by 2002. Since the RAMSI
intervention in 2003, the government has recast its budget, and has taken a hard
look at priorities. It has consolidated and renegotiated its domestic debt and
with Australian backing, is now seeking to renegotiate its foreign obligations.
Principal aid donors are Australia, New Zealand, the European Union, Japan, and
the Republic of China.
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