Tuesday, 18 December 2012 8:57 AM

Logging Revenue Expected to Decline

The logging industry in the Solomon Islands has been the country's biggest money earner for the past 30 years.

Recently, however the government announced that logging revenue is expected to decline from next year.

A Solomon Islands political economist, at the University of Hawaii's Centre for Pacific Islands Studies, says this may not be a bad thing.

Dr Tarcicius Tara Kabutaulaka explained why, to Caroline Tiriman from Radio Australia's Tok Pisin service.

"The fact is that we cannot cut trees at the same rate that we have been doing since the 1980s, so it was bound to decline at sometime. So the prediction that it would decline in 2013 is nothing knew, although I must say, however, that low production has actually increased last year and it would be interesting to see what happened this year. I don't have the statistics for 2012, but in 2011, log production increased. But there was also a significant increase in log prices and so when you see an increase in log prices, you also see a significant increase in log production, making it much more unsustainable," says Dr. Kabutaulaka.

When asked about the resource owners when the country will feel the pinch from the decline in log revenue to the Solomon Islands, Dr. Kabutaulaka replied that although the resource owners will feel the pinch, it will impact government revenue much more.

"If you look at the share for commodities exported in 2011, you will notice that log makes up for about 46 per cent. The other industries make up the rest. Mining made up for about 16%. So the share that the logging industry has is quite significant and so it will impact government. It will also impact landowners. I think they will be both negative, as well as positive impact, negative impact in the sense that a source of revenue for some landowners will no longer be there. But at the same time, logging has had a lot of negative impacts in terms of social conflicts within communities. Perhaps the absence of logging is not such a bad thing after all."

While asked if Solomon Islands will be better off looking at other industries to bring in revenue in the absence of the logging revenue and the country's single mine industry, Kabutaulaka stated that Solomon Islands can still make it.

"I mean Solomon Islands economy, like the economy of a lot of Melanesian countries, Papua New Guinea, Solomon Islands, in particular is dependent largely on natural resource extraction and there's a problem there."

"There's a problem in that if you look at countries around the world, countries whose economies depend largely on natural resource extraction and export tend not to do very well economically and tend to have social conflicts as well. There is a whole discussion around this in which political scientists, economists and geographers and so on have come to describe this as resource curse, that the more you're dependent on natural resources, the more you have problems in terms of economics, in terms of social conflicts as well."

"And so perhaps this gives Solomon Islands an opportunity to look at its economy more broadly and to say how can we shift the Solomon Islands economy away for a dependence on natural resource extraction and the export of raw material, that perhaps the decline in income from the logging industry is an opportune time for, not only this Solomon Islands government, but Solomon Islanders more generally, to relook at our economy and see how we can build a much more diversified economy, that's not dependent on the extraction and export of one particular commodity."

Letters to the Editor All Letters
By STEVE BANI Vura Heights, East Honiara
By GEOFFREY MAURIASI USP, Lacuala Campus, Fiji
By CHARLES KOULI Gizo, Western Province