As we write 12 Solomon Islanders have tested positive for COVID-19 in the Philippines.
The tone when one discusses COVID-19 has changed, it is no longer “this foreign virus” since our own citizens – who is also a brother, a sister, nephew, niece, an aunt, or uncle – have tested positive for the virus.
Families and friends of those that tested positive will go through what millions the world over have gone through – the isolation, the anxiety, the restlessness, the wanting to know more. They will share their feelings and frustrations, perhaps on social media, but certainly with those closest to them – including other family members, friends, and people in their community – and they too will share with others. It is real, and it is now with us - albeit consciously.
Solomon Islands is still COVID-19 free and our borders are being monitored daily. We have strict compliance measures for those that want to return to the country. We have checks before one boards the flight and additional checks when they arrive in country and are in quarantine. Close to 900 of our citizens have been repatriated, and all of them have tested negative. For that we should acknowledge the work our government is doing to keep us safe.
Most of the funds used to finance our preparedness efforts are from aid donors – some of it will have to be repaid. The government announced, and have since disbursed, close to US$ 37.5 million in economic stimulus support. The funds were sourced from current government budget, government bonds, overseas concessional loans and direct budgetary support from donors and development partners.
In short, Solomon Islands was not prepared for this, there was no “rainy day” fund we could draw from – no wealth fund, no sovereign fund, no budget surplus. Debt levels were rising well before the virus was declared a pandemic.
Contrast that to places like Timor-Leste and Vanuatu, where most of its economic stimulus is self-funded. Timor-Leste has at their disposal a US$17 billion oil-financed sovereign wealth fund: that is ten times the value of its GDP.
Vanuatu has been running budget surpluses for the last few years, financed by the sale of a modified form of citizenship. Fiscal surpluses for the last three years is approx. US$70 million (8% of GDP), and Vanuatu was planning to add another US$28 million this year.
The lesson for Solomon Islands is this, we are ill prepared for another crises – recurrent expenditure continues to dominate our national budget. The development budget has become “that other section in the budget” where we stack it up with our wish list. We have already stretched our borrowing capacity; we must start prioritizing what is important – not what is popular.
Solomon Islanders must question the kinds of debt government incurs – there should be space for citizens to be critical, and for government to be responsive. Government should not be brokers for investors, they should focus on creating the right environment for the right investors/investments to flourish.
NOTE: This article borrows figures and data from Stephen Howes and Sherman Surandiran's recently published article in the Devpolicy Blog titled: "COVID-19 spending across the Pacific: the self-funded, the aid-financed, and the constrained".