Financial Crime World

Corruption Scandal Rocks Financial Industries in Solomon Islands as World Bank Boosts Support for Reforms

The financial industries in Solomon Islands have been rocked by a corruption scandal, prompting the World Bank to boost its support for reforms in the country. This move comes as Solomon Islands continues to grapple with economic shocks caused by unrest, COVID-19, and international supply issues.

Background

Protests and rioting in Honiara late last year caused widespread destruction, resulting in an estimated $86 million worth of damage - roughly 7 percent of the nation’s GDP. The impact was further exacerbated by a decline in tax collections from affected businesses, reduced economic activity due to lockdowns, and higher import prices for goods.

World Bank Support

The World Bank has committed an additional $15 million to support the Solomon Islands government’s efforts to strengthen financial management, address debt issues, and empower the Solomon Islands Independent Commission Against Corruption. The funding is aimed at helping the country continue providing necessary services and operations while working towards improved public financial management, anti-corruption efforts, and environmental sustainability.

Quotes

“We’re pleased to be standing with Solomon Islanders in meeting the unprecedented economic shocks the country has faced in the past two years, and to assist in keeping the government’s ambitious reform program on track,” said Annette Leith, World Bank Resident Representative in Solomon Islands and Vanuatu. “This new support will help Solomon Islands continue to focus on strengthening financial management, improving the business environment, and responding to the significant threats of climate change.”

Reform Program

The existing government reform program aims to:

  • Increase transparency in procurement processes
  • Keep debt at manageable levels
  • Support more efficient tax processes
  • Strengthen reporting processes of the Solomon Islands Independent Commission Against Corruption
  • Boost women’s representation in anti-corruption efforts

Additionally, the reforms will focus on improvements to climate adaptation planning by:

  • Increasing the number of communities assessed for climate vulnerability and adaptation
  • Reducing single-use plastics
  • Decreasing imports of plastic bags

World Bank Support Increase

The new assistance comes as the World Bank announces an historic increase in its support to Solomon Islands, with over $130 million expected to be approved throughout June. The additional funding will support four projects:

  • Fisheries management
  • Aviation and roads infrastructure development
  • Rural area infrastructure development