The Solomon Islands prime minister, Manasseh Sogavare, has revealed the details of a $US37.5 million economic stimulus package.
Speaking on Monday at an official launch event, Mr Sogavare said the package was an initial response to the negative impacts of the Covid-19 pandemic on Solomon Islands' economy and society.
"It is more sensible to prevent people losing their jobs now rather than trying to get them back into work once the pandemic has receded," Mr Sogavare said.
Prime Minister Manasseh Sogavare (right) hands the Economic Stimulus Package document over to the Minister of Finance and Treasury, Harry Kuma. Photo: Solomon Islands Government
The Central Bank of the Solomon Islands said the country's economy is already heading into a recession with GDP growth for 2020 forecast to further decline to minus 4.9 percent.
Manasseh Sogavare said the package focussed on two broad areas; addressing the immediate impacts of the pandemic and building the capacity of the economy to recover from those impacts.
The package is divided into five parts:
Soft Measures (dealing with the crisis)
Immediate Recovery 1(investing in productive and resource sectors)
Immediate Recovery 2 (equity injection into public and public/private companies)
Medium Term Support ( Focus on support to stimulate and build the capacity of the economy to develop and grow)
Medium to Long-term Measures (donor funded development projects)
Some of the standout features of the package included a five year tax holiday for tourism operators in the country, loan holidays and $US8.5 million worth of subsidies for copra and cocoa export products.
There's also $US9.1 million in grants and concessional loans for large private companies to go along with equity injection into public and public/private companies, and the ramping up of donor funded infrastructure projects in the country with an emphasis on employing local workers.
Mr Sogavare said funding for the Economic Stimulus Package was being sourced through government bonds and overseas concessional loans as well as direct budgetary support from donors.
"On this regard, I wish to thank our partners for the valuable partnership with the Solomon Islands Government to help mitigate the economic fall out of the Covid-19 in Solomon Islands," Mr Sogavare said.
The prime minister said the challenge now was to implement the package and he said this would be the responsibility of a committee led by the Ministry of Finance and Treasury.
"It is the duty of my Government to ensure that enterprises and businesses that receive support under the package pass on the benefits to households and consumers," Mr Sogavare said.
"Potential areas for abuse of the support provided under the package will be identified early and addressed quickly to ensure the integrity and reputation of the program is maintained," he said.