GDP in 2011 was just over USD 1,425m yielding a low per capita income of USD 1,110. The World Bank (2012) data show that GDP expanded by 9% in 2011 and over the last ten years, the economy managed an average annual growth rate of 2%. In 2010, per capita incomes grew by 4.2% which is regionally impressive. This should have generated employment prospects but the labour force but those economically active remains at 67% since 2005. The country supports a population of 553,000 (2012) and the most recent inter-census period (1999-2009) estimates an annual population growth rate of 2.7% per annum. While political problems still persist, the Solomon Islands (like Fiji and Vanuatu) are heavily dependent on natural resources. Due to a slow pace of industrialisation, services dominate 56% of GDP followed by agriculture at 38% in 2011. The land area is about 28,000 sq km of which less than 5% are arable and crop lands. Subsistence-based economy continues to directly dominate economic activities of the majority (80%, in 2010) of population. FAOSTAT (2012) suggests that total agricultural population increased by 9% while economically active population in agriculture increased by 15% in the period, 2005-2009. Major activities include tuna fishing, mining and timber. The current HDI ranking is 142 and its value has increased from 0.502 in 2005 to 0.510 in 2011.
Baseline Poverty Analysis
A UNDP (2008) study based on 2005-06 HIES estimates a national basic needs poverty line of SBD 266 per month similar for rural households (SBD 225). The report states that in the rural areas, 15.2% of households (18.8% of all population) are in basic needs poverty. It is also estimated that 18,500 rural dwellers have expenditure no more than 10% larger than the rural basic needs poverty line and are highly vulnerable to slipping into the poverty trap. The poverty gap index is estimated at 7.5 and poverty severity is 3.5, similar to Fiji, FSM and Tonga. In rural areas, female-headed households are over-represented in the lowest 20% quintile and therefore are amongst the poorest. Some 34% of children live in these households where 65% and 50% of household heads do not have any or have beyond primary education. It is clear that only 16.6% of household heads are employed and many of them are working poor. Due to the lack of employment opportunities, one-third of all rural household heads are engaged in production for home consumption.
Data show that females made up about 50% of population actively involved in agriculture which is a 17% increase in 2010 from 2005. Education is neither free nor compulsory in the Solomon Islands. This can have potential problems in empowering gender and the 20% of the population who are in the age 16-24. There is lower participation of girls to boys in higher education with gross gender ratio being 0.86:1 for girls to boys in secondary education. Cultural and economic factors surround the gender disparity between males and females in education. Labour force participation of females stand at 24% which is half that of males. Only 1% of the seats in parliament are held by females, IFAD (2011). With massive number of youths, it is expected that increasing education, employment, life skills and information to deal with HIV/AIDS are important. Promoting agriculture which can possibly provide sustainable livelihoods is also important for these vulnerable populations.
Agriculture and Rural Development
Agriculture plays a crucial role in the Solomon Islands. Data show that its value-addition increased by 5.9% in the period 2005-2009, FAOSTAT (2012). Cereal yield has improved from 3,000 tones in 2005 to 3,500 tonnes in 2010. In this period, the food production index has also increased by 1.7% per annum. Oil-crops showed a strong growth from a low base of 72,000 tonnes in 2004 to about 95,000 tonnes in 2009. However, fish production seems to be on a declining trend (-21%) in the period 2004-09. Interestingly, both new arable and permanent crop lands have remained unchanged. However, such a productivity gain must be heavily discounted against the growing rural population and raising poverty rates. Correspondingly, output per worker in the rural sector has actually declined in 2010. IFAD (2011) states that rural population density is 16.98 per square km. The Ministry of Agriculture’s renewed livestock strategy is yet to show meaningful results as livestock production fails to improve. Customary land tenure system governs land distribution of the 87% indigenous communal land while the price and ownership of 13% public and private land are market determined, ADB (2005). In the growing forestry sub-sector, deforestation (due to logging, often un-regulated) causes soil erosion, siltation and decline in vegetation succession posing major threats to agriculture. The economy is endowed with abundant marine, ground water and adequate precipitation (rainfall averages 2,700–3,500 mm per annum) but safe drinking water is a problem. The major exports include timber, fish, copra, palm oil and cocoa which are sold in the Asia markets, mostly China. Total exports were USD 226 million or 56% of imports (USD 405 million) in 2010, World Bank (2012).
Investing in the Rural Poor
Solomon Islands: Investing in the Rural Poor, IFAD's Rural sector performance assessment (RSP). This publication may be found here.
Rural Development Indicators
Composite data about Solomon Islands may be found here.