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The Solomon Islands and Vanuatu to Drift Away from the Least Developed Countries’ Status

According to UNCTAD’s findings businesses and consumers located in the two rural Pacific island countries can expect a future that is well connected and more prosperous. UNCTAD gave out Rapid eTrade Readiness Reports to the Vanuatu and Solomon Islands government on 16th and 18th July 2018. This was part of the eTrade for all Initiative by UNCTAD. The Solomon Islands which comprises of over 900 islands received the report after signing a deal with the government of Australia to install an undersea cable which will increase the speed of internet in the region. The Solomon Islands is located 2,000 kilometers in the northeast part of Australia.

The Australian government will pay two-thirds of the whole project that cost $100 million. The deal was reached out between Peter O’Neill, the prime minister of PNG and Rick Houenipwela the prime minister of Solomon Islands at Brisbane. According to Malcolm Turnbull the prime minister of Australia, the country spends billions of dollars annually on foreign help, and the project is a practical way of investing in the future growth of their neighbor’s economy. After completing the project will connect the two countries to the mainland of Australia. It will also link Honiara the capital city of Solomon Islands and the outer islands of the archipelago.

This comes amid calls by the Solomon Islands to diversify its economy to ensure that the help of e-commerce strengthens sectors such as mining and timber enabled sectors like tourism, fisheries, and agriculture. The released report stated that the telecommunication sector liberation that took place in 2009 resulted in a significant penetration of mobile phones in the region. Moreover, it changed the manner in which people in rural areas are linked to the banking and government services as well as to one another. The report added that 94% of the population can now access mobile signal and the penetration rates of the mobile phones increased to 78% in 2017 compared to 20% in 2010.

Joseph Ma’ahanua permanent secretary and trade commissioner for the foreign ministry said that the trade industry comes with a lot of benefits in the country. Sven Callebaut consultant at UNCTAD noted that trade was a bedrock of the Solomon Islands. He added the e-commerce is the platform that can help in realizing the development of private sector and competitiveness of trade. According to him, bassing on the report, the government has highlighted its commitment and can take the first step towards developing a strong e-0commerce space. ASYCUDA automated customs system by UNCTAD has assisted the customs agency in the country to collect revenue worth around $130 million (1 billion Solomon Island dollars) since its launch in 2015. The system automates the transactions of the customer by improving transparency, processing time and shelving time for a lot of imported goods such as food items.

Vanuatu which is located 1,000 kilometers southeast of the Solomons Island is also shifting its focus towards an online based economy by thinking about Rapid eTrade Readiness Assessment of its own. Bob Loughman. Vanuatu’s deputy prime minister witnessed the launching of the report at Port Villa. According to the report, e-commerce space in Vanuatu still has got a wide gap. But there is a strong foundation created by government effort and readiness, investment in information by the public, favorable regulatory regime, facilitation of trade and technology and communications (ICT) infrastructure which will help the country to benefit from the digital revolution that is already being enjoyed by economies from other regions. To reap well from the digital future, the government of Vanuatu will have to overcome a lot of challenges. Adoption of e-commerce by businesses more so medium-sized, small and micro enterprises in the country will need trust and confidence in electronic systems of payment that are yet to be spread widely.

Moreover, microfinance and banking institutions will be forced to work with the lending business associations and the government to make sure that financing gaps are narrowed. This is what will help them to invest in ICT. It could also help in motivating venture capital and business incubators from New Zealand, Australia, and other Pacific Islands countries to incorporate e-commerce of Vanuatu into their investment schedule. Both Vanuatu and the Solomon Islands are part of a commitment by UNCTAD in helping integrate the developing countries from the small island into the global trading system. It also aims to back them in growing their economies and fighting against the geo-climatic challenges.

According to the director of UNCTAD’s technology and logistics division, Shamika N. Sirimanne, the assessment of the two nations helped the governments in coming up with a great vision to develop their e-commerce space and integrate well with global and regional economies.  He added that UNCTAD would support efforts by Pacific Island Forum countries to uncover the e-commerce’s potential for the development of national trade and development of private sector. The Rapid eTrade Readiness Assessments were the 9th, and 10th carried out by UNCTAD. Moreover, they were the 2nd, and 3rd carried out for Pacific islands country after the one for Samoa that took place in July 2017.

Tuvalu and Kiribati also requested for eTrade Readiness Assessments that UNCTAD is looking forward to backing soon. The Solomon Islands will move away with its status of Least Developed Country after the growth of its key economic indicators. United Nations also recommended Vanuatu to graduate come 2020. UNCTAD held the workshop with the aim of having organic economic growth during and after graduating from the status of Least Developed Country in the Pacific. The workshop took place on the 20th to 21st June 2018 in Porta Vila.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinpacific.com and we base our discussion on technology in Pacific countries and the rest of the world.
Denis the Tech guru

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