Friday, 9 May 2008 12:41 PM

Government Seeks to Subsidize Uneconomical Shipping Routes

In an effort to improve development in rural areas the Minister for Infrastructure Development, Stanley Festus Sofu, yesterday announced that the government, through his Ministry, will be subsidizing shipping services to uneconomical routes in the country.

Mr Sofu says the fact that shipping routes in many remote parts of the country are very expensive to run the government will give financial assistance to ship owners who are willing to serve those routes. The Minister said that the Ministry for Infrastructure Development has already called on ship owners to submit tenders.

Transportation to the nine provinces in the Solomon Islands has been a challenge for successive governments. Many in the rural areas have urged the government to improve the connectivity of the rural populace as it would increase economic activities in the provinces. As many have argued, the reason why many flock to Honiara is because there is very little opportunity in the rural areas.

Some pundits have stated that subsidizing uneconomical routes may not be the best option. "True, there is a need to serve these uneconomical routes, but I think the approach should have been staged," stated one economic pundit. "The first is investment in rural based projects, they should be small to medium based enterprises...a lot of focus should be on food production."

The pundit stated that once that is achieved then it would make sense to fully subsidize uneconomical routes as it would not only fix shipping problems, but it will also help in the countries food security.

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