nowhere dominant,

Solomon Islands

A pervasive, but nowhere dominant, presence

A ustralia's modern official links with Solomon Islands predate those between New Zealand and the archipelago by only three and a half years, writes Irene Hawkins in Honiara. Very much like its smaller neighbour, Australia's interest in the South Pacific was until the early seventies largely confined to countries with which it had some special relationship in effect, mainly Papua New Guinea.

But just as in the case of New Zealand, a combination of fac tors has caused Australians to take more note of the wider South Pacific in recent years the emergence of independent nations, the increasing com mercial presence of Japan, the region’s new strategic import ance in the face of a build-up of Russian and Chinese interest in it, and, last not least, the growing hunger for Aus tralian imports in some of the larger territories.

Australia’s High Com mission in Honiara opened in January 1975. Under the two High Commissioners since then the present being John Melhuish relations between the two countries have further deepened, and the official aid programme has got well under way, running at an annual SSI 2 million.

There is an increasing flow of politicians and civil servants in both directions. Both the

prime minister and deputy

prime minister have been quests of the Australian Government, while Australia’s leputy prime minister ittended the recent South Pa

cific Forum meeting in

Honiara. A delegation of

Queensland parliamentarians

:ame to SI recently, and a 'roup of SI MPs will visit Aus ralia later this year.

Besides these fairly recent )fficial links, there are many >ther strong ties between the wo countries. Some of them go >ack a century and more, and ertainly one of them did not tart off on an exactly happy

>asis the recruiting of a large

number of Solomon Islanders for work on Queensland’s sugar plantations in the second half of the nineteenth century.

But this was the first time a large number of Solomon Islanders had travelled to Aus tralia, and gained overseas ex perience. It was among these immigrants in Queensland that the South Seas Evangelical Church (formerly the Queensland Kanaka Mission), which is now the third strongest church movement in SI, orig

inally developed.

During the twentieth century a motley lot of planters, mis sionaries and some business men found their way to SI. By the 1920 s a number of Aus tralian commercial firms had established themselves on South Pacific islands, among them SI.

Before the last war well known Pacific traders like Burns Philp were very strong in SI, where quite a few plan tations had fallen into their hands as a result of defaulting creditors. Australia’s involve ment in the war in Solomon Islands was fairly limited. But its close association with the famous ‘coastwatchers’ has gone down in history; so has the loss of the Canberra, one of Australia’s biggest cruisers, in the Battle of Saro in 1942.

Some of the first major pri vate businesses in Honiara in construction, motor mechanics and trading were built up in the fifties, when an enterprising German emigre to Australia (who was later to be followed by more Germans) settled in Honiara. During the early fif-

Solomon Islands-Australian Trade, SSPOOO

ties too an Australian company moved into sawmilling in SI; in 1973 this company was taken over by Foxwood, at present the largest Australian investor in the country.

For a long time now, some Solomon Islanders have been going off to Australia for further education, although it has been New Zealand and the United Kingdom that took the bulk of such overseas SI students.

Nowadays there continues to be considerable regular every day contact between the two countries through the 400 or so Australians living in SI, plus some 2500-3000 Australian tourists who come every year, not all of them the best am bassadors for their country! In addition several thousand Aus tralian cruise ships passengers call briefly at the port of Honiara. Air and sea links with Australia are well developed, but there are no major direct Australian stakes in this field.

Generally speaking, Aus

tralians are well liked for their friendliness and casual man ners. But it is probably true to say that quite a few Solomon Islanders tend to feel a closer affinity with New Zealanders or Britons.

Trade links with Australia have been long-standing and were once considerably closer than they are now, after Si’s substantial export diversifi cation both in terms of pro

ducts and markets. While still in 1955, 28% of SI exports then virtually all in the form of copra went to Australia, Aus tralia’s share had dropped to under 19% 10 years later and by 1978 had declined to a mere 3% or under SSI 1 million.

Imports from Australia have also dropped from well over 50% in the mid-fifties to 33% in 1978. But even so Australia continues to remain by a long way Si’s single most important

source of foreign products.

Apart from substantial annual re-exports (in the form of cars, empty beer barrels and the like), sawn timber from the local subsidiary of the Aus tralian Foxwood company dominates SI export sales to Australia nowadays. Quantities of twist tobacco and gold are also sold in Australia.

At present the scope for exports to Australia is very lim ited. Australia produces a simi lar range of tropical fruit and vegetables to SI, and of higher quality. There is however some scope for SI spices like tur meric and for chillies. Sawn timber exports would undoubt edly gain somewhat if the Aus tralians reduced the import tariff rather than putting it up, as they may well do.

But shipping and handling

charges in Australian ports (50-60% higher than on timber exports to Europe) are at least equally serious obstacles. Thus, if Australia really means to

1977 1978 Total Exports to Australia 564 961 Of that sawn timber 162 279 tobacco (twist) 111 94

gold

56 89 cocoa beans — 56 re-exports 196 431 Total Imports from Australia 8196 10 307 Of that rice 980 1231 canned meat 427 640 flour 351 510 refined sugar 321 267

non-alcoholic beverages

230 328 beer 372 376

lubricating oils

297 331 As well as a wide range of other products, each of them

amounting

to less than SSI'A million.

help boost the region’s exports, it must tackle both the trans port and tariff problems. It is encouraging that the Aus tralian Government appears to be taking a more serious interest in the much-discussed proposal for a South Pacific Free Trade Area which would allow South Pacific products into Australia duty-free, with out the obligation of giving re

ciprocal rights for Australian

exports.

Imports from Australia run at more than 10 times the level of SI exports to Australia. They ran at SSI 10.3 million last year.

They cover a very wide range of products from foodstuff's to manufactures of all sorts. The single most important item is rice, worth SSI 1.2 million last

year. Despite a by now sub stantial local rice output, Aus tralian sticky rice continues to be preferred by many Solomon Islanders.

In sharp contrast to the trade field, Australians have been rather hesitant to put any size able direct investment into SI.

The key reasons must lie with Australia’s own richness in natural resources, and the fact that its attention has been focused on PNG.

Among the 30-40 businesses that are subsidiaries of Aus tralian companies or backed by Australian money the two tim ber companies Foxwood and

Allardyce are probably most

important. Foxwood, which has invested around SSI 2 million, is the country’s major

sawmiller (with an output of 10 000 cubic metres of proces sed timber in 1978). The company employs about 250 people, and logs on Guadal canal. It is planning to expand its production substantially this year, possibly go into pre-cut furniture components, and di

versify exports by selling also

to the UK.

Allardyce, which has been in SI since 1963, and logged on both Isabel and St Cruz, is in the process of setting up a new

logging operation in

Shortlands, where it is plan ning to put SSI 200 000 into a new sawmill and equipment.

The subsidiaries of two Aus tralian banks have played a major role in the development of the local banking system.

The Commonwealth Trading Bank of Australia and Com monwealth Savings Bank of Australia, which has the only sizeable nation-wide network of savings agencies, has been in SI since 1951, while the Aus tralian and New Zealand Bank (ANZ) arrived in 1966. In fact financial links between the two countries have been very close, especially up to October 1978 when SI replaced the $A with its own national currency. Up to the 5% revaluation of the SSI in May this year the currencies were at parity.

Both bakeries in Honiara are partly backed by Australian money, while one of the big builders’ suppliers is a wholly owned subsidiary of Lend Lease Corporation of Aus tralia. It is also interesting to note that the national airline, Solair, was originally built up by an Australian business man.

Apart from this there are a

number of importing retailing

firms, a small insurance firm and quite a few mailbox companies, largely in the mining sector. Among them CRA Exploration expressed an interest in gold mining re cently. buy out a suitable well established business.

But further progress can be expected in the field of official, bilaterial aid from Australia. In its first three-year aid pro gramme from July 1976-June 1979 Australia committed SI 6.5 million one-tenth of its total aid allocations to the South Pacific for this period to Solomon Islands. By the middle of this year at least SSI 6 million of this had been spent, and aid for the next financial year is already over committed. Allocations for : 1979-82 are not expected to j drop in real terms, and may well increase.

There are about 60 official j aid projects, largely in the com- j munications and transport j

fields, plus a small training programme and the provision of emergency relief. The single biggest chunk of Australia’s money SSI 1.6 million over three years - is going into the upgrading and expansion of the local radio station, mainly by building new studios, instal ling new equipment in both Honiara and some district centres, and training local per sonnel. Australia is also fin ancing the access road to the planned hydropower station on the Lungga River east of Honiara as well as the urgent repair of Henderson Airstrip outside Honiara.

Outside the communi cations/transport fields Aus tralian aid is going into three

projects to help cattle develop

ment, and the provision of

butchery equipment and

coolrooms.

Australia is also giving a cer tain amount of technical assist ance largely under its

Australian Staffing Assistance Scheme (ASAS).

In education, Australia is assisting the curriculum

development for secondary

schools through the University

of New England and is also funding three-month inter national training courses in anything from cattle manage ment to industrial relations, which are attended by a dozen or more Solomon Islanders on average per year. With the emergence of local secondary schools and regional universi ties Australia has preferred to concentrate on helping with higher level training and mas

ters’ degrees.

Australia’s procedures for administering its aid are often rather bureaucratic in the eyes of local civil servants, and its

policy of handling consultants

leaves much to be desired. Its degree of tying its aid is not more or less than that of most other donors. But Australia’s

aid programme deserves credit marks on several scores. Its ASAS scheme is much better than most other staffing assist ance schemes. The provisions on financing local costs are fairly generous. It is using a local lending institution the Development Bank of SI to channel some of its funds to the provinces. It is generally keen to push more money into the rural areas and is talking about a rural development fund.

Also, its system of cash grants is an effective, ‘short-cut’ way

of supporting smallish projects

with clearly defined costs.

Altogether SSI 750 000 has been given as accountable cash grants over the three-year period.

In addition to this official, bilateral support, there are all sorts of other, sometimes small ways, in which Australian money and expertise are sup porting SI. A periodic visit from a team of eye specialists

fills a vital gap in medical services.

Soon the independence film, made by Film Australia with $Bl 75 000 of aid funds, will be released in SI.

Australia’s defence forces have helped in such varied tasks as earthquake relief,

searching for a missing plane,

surveying an outlying atoll,

clearing away old unexploded

ammunition and coral-blasting to make room for a harbour.

Thus, generally speaking,

Australia’s influence in SI is pervasive, but nowhere domi nant, except in the import sec tor. This is in fact very much in accordance with the role that Australia wants to play in the region. It is keen not to be suspected of wanting to assume a neo-colonial role and lays great stress on assisting the South Pacific in maintaining or

achieving political stability,

national unity and regional co

operation.