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Compliance and Risk Management Frameworks in Solomon Islands: Key Challenges and Mitigation Measures
The Solomon Islands government has identified several key areas of concern that require attention to achieve economic growth and fiscal reform. A risk assessment and risk management plan have been developed to mitigate these risks and ensure effective implementation of reforms.
Poor Public Financial Management (PFM) Systems and Processes
One of the major risks facing the country is poor public financial management systems and processes. While significant progress has been made in strengthening PFM, there are still weaknesses that need to be addressed. To improve PFM, the government has implemented several measures, including:
- Adoption of a procurement reform plan
- Establishment of a dedicated procurement unit
Corruption Risk
Another key risk is corruption, which can undermine the effectiveness of public financial management systems. While Solomon Islands has many of the components of a national integrity system in place, resourcing and coordination remain a challenge. To address this issue, the government has implemented several reforms, including:
- Enactment of the Public Financial Management Act in 2013
- Introduction of new accounting software
Capacity to Implement Reforms and Political Instability Risks
The country’s capacity to implement reforms effectively is also a major risk, as is political instability, which can weaken fiscal discipline and policy commitment. To mitigate these risks, the government has agreed to engage regularly with development partners on the implementation of its Economic and Financial Reform Program (EFPR).
Other Risks Identified
Other risks identified include:
- Potential for limited engagement or withdrawal from development partners
- Need for improved governance and risk management frameworks
The Asian Development Bank (ADB) is providing technical assistance to support the government in addressing these risks and implementing reforms.
Conclusion
Overall, the Solomon Islands government recognizes the importance of effective compliance and risk management frameworks in achieving its economic growth and fiscal reform goals. By addressing these key challenges, the country can build a stronger foundation for sustainable development and economic growth.