The Native Iowan

The following are answers to questions as posed by the Solomon Star. It is important that the answers be printed as is and that literary license is not allowed. This is not an interview… It is a submission with answers to specific questions…

As the new President of Chamber of Commerce what are your immediate plans for SICCI?

Since there are so many important issues that need urgent attention it is hard to prioritize just a few. The business law reform deals with a number of issues, as will the labour law reform, but a short list of other priority areas would include; road improvements in Honiara (Ranadi in particular), inter island shipping including navigation aids, customs clearance times, Solomon Airlines management, water and electricity supply, telecommunication costs, garbage collection and disposal, urban land use, national legislation on lands, business friendly taxation reform.

On top of these issues the Government must also see growth in the tourism, mining, plantation and fisheries sectors if it is to avoid a growing trade deficit, a weakening Solomons Dollar, and higher unemployment.

The Chamber realizes that this is an immense task. Which is why the Government should utilize the expertise of the private sector in making decisions, rather than importing expensive and oft-times confused consultants. Utilizing immediately available private sector business experts to develop policy that aims to enhance the business environment is an obvious choice to make.

The Government has promised greater engagement with the private sector but we need further commitment and continuous meetings to develop how we can actually help government formulate policy. Just saying something does not make it reality. The Private Sector as represented by the SICCI is standing by to assist, partner and cooperate. It remains the responsibility of Government to involve us in a productive and permanent manner.

The SICCI must continue the path established last year whereby an honest partnership with SIG is maintained creating a venue where positive progress and cooperation is fostered. There is, sadly, a thought process that Government and Private Sector are adversaries. By understanding that Government needs Private Sector and that Private Sector needs Government we can prepare to move forward together rather than in opposition. The Chamber proved its commitment last year but remains disappointed in the time lost through political agendas being primary to economic agendas. Both agendas must be addressed yet an imbalance, as we have experienced in the past, easily costs us time we do not have.

Consider: Solomon Islands celebrates its 30th anniversary this July. How long do we have to “get things right”?  I personally feel our problem is that we lack the consistent leadership of experienced and honorable, fair-minded individuals. Not to say that such individuals do not exist but rather that the stability required for successful economic foundations to be laid has never existed. Where are the leaders that we need to make wise decisions at all levels of the community? Government land is often “given” away to friends, relatives and cronies. (specifically noting the Western Provincial decisions to “sell” land including the famous Kennedy Island in 2004 and the loss of public land throughout Honiara) We are currently watching the drama of government vehicles (new and expensive vehicles) being “sold” to public (past public) officers for a fraction of their worth.

The leaders that do the harm to the community may not be with us for long yet the fact that the damage is done, the valuable properly sold for a pittance with the needs of the Nation left unattended; for yet another term.

I feel that we do not have too many chances to get it all “right”. In very rough numbers: Half the population is under 25 yrs. Half of this group is under 15 yrs. We are looking at a huge cross section of our population becoming more and more disenfranchised. We talk of our Nation’s valuable resources… When are we going to wake up and understand that the Youth of The Nation are much more valuable than the timber, fish stocks or minerals we argue over?

All that I read, research and understand tells me that our beloved Solomons are an economically viable land. I feel that the wastefulness of past leadership combined with the collusion of self serving business principles has sent us all down the path of penury. 30th independence anniversary this July… I’d say we have 10 years to prove the current generation has the ability and will power to make a difference.
 
2. What would be your priority areas to address in relation to commerce and industry activities in SI?

We have discussed many areas of importance above.

Specifically we will directly attend to:

• Take the SICCI to the Provinces.
• Address taxation issues with SIG.
• Continue working per developing a better and more professional Lands Office that actually does the work required in a timely manner.
• Address issues of businesses acting outside the formal sector.
• Push for transport (road, sea, air) development throughout the country aiming to find a point where the rural dwellers of the nation are no longer penalized for simply being rural.
• Bring to the forefront the issue of the Solomon “brain drain”… We need to bring our skilled and qualified wontoks back to the Solomons. The only way to do this is to offer the same opportunity and future as is being offered to these people over seas.
• And the youth of the Nation… We must become wise enough to admit that it is up to the generation now in control to ensure a secure future for our children. We need to give them respect and self esteem. Rather than sell the public playing fields we should build more sporting facilities. Our schools are less than productive. If we cannot prepare a positive future for the youth of the national all else is for nothing.

3. What areas would you like the government to do or improve in relation to commercial and economic activities and growth in the country?

In addition to the previously mentioned issues one thing that needs attention is the level of service from government. The private sector pays taxes and expects a certain return on this investment. However, what we continually see is inefficient government services and inefficient civil servants. Whilst we do understand that some departments are understaffed we believe that a lack of discipline, work ethic and leadership result in a poor level of service. Ministers are ultimately responsible for whether or not their employees work hard and steer clear of corrupt practices. However, it is management at every level that should be demanding more of their staff and themselves. The country will continue to develop at a snail’s pace if corruption and incompetence are allowed to permeate every level of public service.

A work ethic must be developed where the type of energy found in the Government Offices is the same as the energy found in private business. Right now government offices may or may not be functioning to their actual capacity with and deficiencies costing private sector directly. It does not work for Private Sector to wait for far too long to get a property transferred or a permit process completed. Files get lost in the system and the Private Sector suffers. As they say… “time is money”.

The self-serving or corrupt attitudes that have crept into the administrative life of the Solomons has to stop. This comment is pointed at Private Sector as well as Government… It does take two to tango, so they say… The idea that you have to pay a worker or officer a gratuity to do his job is farcical. It is, in my mind, a new occurrence specifically noting that such was not the norm within the first ten years of Independence.

I feel that it is now quite normal to find levels of corruption where by a pack of cigarettes gets you fast attention, where a crate of beer gets you that form processed, or where a few hundred dollars buys a blind eye to a large tax or fee or even remove a legal charge. The mentality here is that the service being supplied is for sale to the highest bidder. This holds true with Government offices, State Owned Enterprises and Commercial Business. We have come to accept the trend that you pay something extra to get good, prompt service. Or, if you do not pay, you wait, and wait, and wait…

With the greatest of respect to all parties: We all have messes we need to clean up. Finger pointing does not work but, as discussed above, I do not think we have much time to get it right.
 
4. As the former Vice Chair of SICCI and long time member of SICCI what are some of the challenges and achievements of SICCI?

We have been heavily involved in government plans to raise the minimum wage (something that the Chamber supported) and also proposed changes to taxation. The Chamber has proven to be an invaluable source of information since we have shown that we can conduct research involving thousands of employees and numerous firms very quickly. The country lacks much of the important data on which policy decisions should be made. This year we plan to undertake many more studies and surveys of our members to help the government make the right decisions.

However, undertaking such work is a challenge to the Chamber since we are a small, self funded organization. Our challenge for 2008 is to look into expanding our revenue base by attracting more members and offering a greater number of income generating services as well as seek development funding to allow our far reaching programmers to be realized.

SICCI is the premier private sector representative for the Nation. We plan to reach out to the provinces and allow the strengths of the SICCI to assist businesses and industry “out there”. I strongly note that it is important that we bring our brethren-in-business into the formal sector, which will be hard at first. The Government must make it clear to the Private Sector that there are advantages in being a part of the formal sector. Hiding in the “black market” areas of rural business is no longer acceptable and we must show others that there are distinct advantages in being part of the formal economy.

To be successful here the Chamber must prove it’s worth to its membership. It must modify perceptions of what our main functions are…
Why should any business or private individual join the Chamber?
What return for investment does it offer?
Will the partnership with Government we discuss really make a difference?
Is the Chamber just for the big businesses?

The answers here are basic and simple: By being a member of the Chamber/ by being a member of the Formal Private Sector your voice has more weight. The more of us who work together to partner with Central and Provincial Governments to “MAKE A DIFFERENCE” the easier and quicker we shall grasp success.

 
5. Do you think government support to private sector is enough or not, if no what areas needs to be supported?

SIG is good at doing consultations (probably due to donor pressure and/or advice in how to go about reforms) but there is no guarantee that the private sectors views are taken into account. The Chamber has had mixed success in this respect. What we would like to see is a greater number of private/public sector boards making real decisions regarding government policy and spending. Although we are represented on the steering committee for business law reform and for labor law reform we would like to see more private sector involvement in the real decision-making. The Shadow Board for the National Transport Fund is a good concept and one that could be repeated in other sectors. However, we recognize that the Government will be reluctant to cede some of its decision-making abilities to the Private Sector. Despite this we see that mixed private sector and government boards are more democratic and effective way of making decisions.

It is important to comment on State Owned Enterprises, SOEs, appear to demand much funding from the Government’s general treasury… Perhaps too much. Noting specifically that Solomon Airline and SolTaiyo cost the Government millions to “keep afloat”: It may be wise to consider the ability of the Government to manage such enterprises. It may be wise to dissect the reasons for such failings. Is it indeed in the best interests of the Government to continue to “invest” in losing operations? Could the money be better spent, elsewhere?

SIG should be supporting the private sector through infrastructure development. Also through bringing opportunities such as partnerships with businesses from off shore. The Government should never “give” money away to stimulate “business”. You cannot promote or develop business by handing money out. It simply does not work. Grants in the name of “development” have long been a path to fund wontoks and cronies.

Give us wharfs, an airline that is on time, good roads, and fair taxes… And then we’ll see how fast and how far we can grow.
 
6. Doing think business and investment opportunities is rising in the country? if so what is the contributing factor?

The high level of economic growth that we are seeing is to be expected after a prolonged period of self inflicted stagnation. Taking specific note that we are still below late 1990’s level of productivity.

High worldwide commodity prices are making the country attractive to investors. Palm oil, metals, timber and fish are currently in high demand. However, there is no guarantee that this will continue indefinitely, as has been illustrated by the recent global credit crisis. The government must work harder simply to remain competitive on the international arena. In order to succeed the government needs to pursue very wise, long-term strategies; which is hard to do in such a fluid system of government as we have here, with no strong party system and continually changing allegiances. Investments are likely to grow but the government must reinvest any surpluses in infrastructure and also health and education. We need an educated, well trained, workforce if we are to develop.

Following and possibly contrary to the above: The investment climate in the country is not as healthy as one may think. We are living on a short-term crest of a wave that may well crash. Logging is less than long-term sustainable. Fishing is the same. Mining… Similar, perhaps? The Government must make gains while the times are good and prepare to invest in the future.
 
The discussions per increasing tax levels rather than reviewing the entire tax system means that an investor stands little chance of creating a return on investment, honestly. Too many taxes open the door to abuse. Too much taxation promotes devious designs. Our currency is in very bad health. It would take a brave investor to bring money from off shore and, at this time, invest in SBD. Political instability is another issue that scares investors off. Land tenure noting costly and tiresome issues relating to inefficiencies in the Lands Office is another detractor to inventors. General safety and security, noting the 2006 riots that erupted without warning, is another big threat to investment.

Instability and the lack of a secure and consistent business environment increase the costs of doing business. Such increases of cost often send honest investors away from the Solomons.

We can all agree that the Solomons offer much potential. Yet the act of attaining or realizing this potential must be done in a partnership between Government and Private Sector… Not at the cost of the Private Sector. As long as we can be fair, honest and transparent we can succeed.

In ending… I offer for reprint a speech that was made to the Sogavare Government in late 2007. I feel the sentiments here have not changed…

Respected Guests, Ladies and gentlemen,
 
The SICCI has been asked to offer remarks per
 
“The Role of the Private Sector and Challenges Faced”… This is an important discussion and I very much appreciate the opportunity to address this gathering. I will keep my remarks short, succinct and pertinent…
 
First off: Allow me to begin by defining “Private Sector” … Encarta states that Private Sector is the part of a free market economy that is made up of companies and organizations that are not owned or controlled by the government. My initial comment here is that the Private Sector of Solomon Islands is unlike that of other counties. Our Private sector begins with the rural sector and flows from there. The largest cross-section of our Nation, the rural sector, is very much a part of the Private Sector. Yet this cross section of our economy is often underrepresented, overlooked, neglected, or worse, exploited.
 
Representing a powerful machine the rural sector has proven to be a strength that has supported the Solomons time and time again. Most urban businesses cater, at least to a degree, to the Rural Sector. We can be blinded at times by considering that the urban economy is the economic end all and be all.
 
It is an articulated aim of SICCI to reach out and include the rural Private Sector in our activities. We are actively, upon the request of the Premier, working to establish a branch of the SICCI in the Western Province. Choisuel Province has also requested that SICCI come and meet with them. I am convinced that our long term goals and visions must include the rural Private Sector. The sooner we consciously do so the stronger our economy will be.
 
Secondly allow me to attempt to paint a picture of our current economic situation: 2007 has been a dynamic and challenging year. Consider: The flow-on effects from the 2000 to 2003 economic disruption are still with us. The civil disobedience experienced in 2006 is still a legacy we bear. The disaster experienced in Western and Choisuel Provinces in April this year simply adds to our list of woes.  
 
I must be blunt here… Over the past seven years the Private Sector has been shaken, rattled and rolled from every conceivable direction. We have all mutually experienced much that directly or indirectly inhibits or even prohibits economic growth.

Combine this with the rising prices for basic commodities, the weak SBD we trade in versus the strengthening of currencies such as the AUD and we see quite a shadowy economic picture emerging.

Additionally; recent Government initiatives to raise the minimum wage and to modify taxation legislation, specifically targeting benefits paid to employees, distorts this picture we are trying to focus in on.
 
I am fond of stating, perhaps bragging that the Solomons is my home. I am proud and honored to be able to claim such and habitually choose to be optimistic in relation to business, our economy and the challenges we face. Where will pessimism take us anyway? No, optimistically, through the fog, the smoke, the confusion and the haze the picture of the Private Sector in the present day economy is very, very impressive.
 
We can see dedicated and loyal citizens, in both the rural and urban sectors, making due in good times and in bad. We see confidence in the face of uncertainty, resilience in the face of adversity and beautiful Solomon smiles all the time.
 
The SICCI represents many private businesses. Admittedly a fraction of the Private Sector, the SICCI membership includes locally owed, and  foreign held enterprises, all of which have survived and supported the national community through thick and thin.
 
Yet I am compelled to point out that the Private Sector does not have an infinite capacity to suffer set backs and still contribute. We have seen businesses leave. We have seen businesses fail. I shall not dissect the reasoning behind such leavings or failures but…
 
If I could wish for if not request one thing from our National Government:
 
It would be stability.
 
I say to our Elected Leaders, Please… Give the Private Sector, both the urban commercial and the rural private sectors, stability. Please: Give us good leadership. Please. Give us security. Please. Give us Fiscal responsibility. Please, Please. Give us wise laws, fair taxes and mutual prosperity.

As our National Anthem states
 
Joy, Peace, Progress and Prosperity
 
And of course…
 
God bless our Solomon Islands from shore to shore