The Central Bank of Solomon Islands (CBSI) 2018 Annual Report showed that round log exports contributed a substantial portion of the country’s foreign exchange inflows.

In 2018, round logs made up 79% of foreign reserves receipts. Multilateral and bilateral aid contributed 12% while fishing license receipts contributed 7%.

Interest on foreign reserves including SDR, call account interest and investment returns made up 2% of the foreign reserves inflows while domestic market foreign exchange deals contributed under 1%.

In 2018 CBSI issued 924 Specific Authorities to Export to round log exporters. This was a decrease of 7% from the previous year. The estimated volume also decreased by 10.6% to 2.822 million cubic meters valued at approximately SBD$2.9 Billion.

Foreign reserves play a critical role in maintaining liquidity, this ensures that businesses and individuals can pay for imports – which in turn stimulates growth in the economy.

“If one were to combine round logs and fishing license receipts we can say 85 % of Solomon Islands export earnings depend on two resources – logs and fish,” stated a senior official at the Ministry of Finance statistics department, who spoke on the condition of anonymity.

“We have a looming crisis, one that we are not prepared for – both these resources, which we depend on, are declining fast…we all know valuable logs are declining and so are fish stocks.”

He says that Solomon Islands is not attracting any serious foreign direct investment (FDI) because it is not putting in place necessary protections for emerging sectors like mining.

“We have to start thinking about the future, how will we fund our future? Resources are depleting fast, and we are not doing enough, right now our economy cannot absorb the projected loss in revenue, or exchange earnings if something happens.”