Download Enhancing SME Development for Economic Growth and Prosperity

The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific region
Submission 123
Solomon Islands Chamber of Commerce & Industry
Enhancing SME Development for Economic Growth and
Prosperity for Solomon Islands:
Perspectives from the
Solomon Islands Chamber of Commerce and Industry (SICCI)
Introduction
According to a recent World Bank study, Solomon Islands is one of the most aiddependent countries of the world, with international aid flows equivalent to almost half of
the country’s economy. Around US$250 million of non-military aid enters the country, but
only 15-20 percent of this amount is spent locally though local procurement or staff
expenditure.1 Despite huge inflows over the past 35 years since independence, Solomon
Islands remains poor with weak political leadership, systematic corruption, widespread
health problems including poor access and facilities, high unemployment, high illiteracy,
poor education standard, and poor infrastructural development.
Solomon Islands is not only aid-dependent, but also import-driven. It has continued to rely
heavily on the exploitation of its natural resources such as unsustainable logging, and
depended on a very narrow export base at the expense of encouraging value-adding,
downstream processing and import substitutions. Our local industries suffer and we do not
encourage the growth of the private sector because we do not create the right
environment for greater export capability and capacity, innovation and entrepreneurship.
As a nation, we need to work towards reducing aid dependence, improving local
production and improving the quality and quantity of goods and service providers. These
will eventually lead to increased exports and reduced imports. Collectively it reduces trade
imbalances in the short to medium term and reduces aid dependence in the longer term.
The private sector is said to be the engine of economic growth – but the government
should not expect that the private sector will grow in a vacuum. We have great opportunity
to ‘rebuild’ our country, and we believe it is the government’s responsibility to enhance the
growth of the private sector, if it has to move away from aid dependency and reclaim its
true independence.
1
Increasing the participation of women in the Solomon Islands Economy [report prepared by the World Bank,
Solomon Islands], page 4.
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This submission from SICCI highlights some of the negative impacts of aid in Solomon
Islands and proposes that the way to go to achieve sustainable economic growth and
prosperity is the enhancement of the SME (Small and Medium Enterprises) sector.
Aid and Sustainable Development
We are yet to prove that aid brings about prosperity to a nation and we do not believe that
aid in its present form is viable for sustainable social and economic development for
Solomon Islands, as history has taught us. Rather than being a solution, we believe aid
has created problems of accountability. Aid is not aid because some of the aid programs
are poorly structured and constrained by conditions attached to them, which undermine
the independence of the country in how it should manage its own economic affairs. Not
only that, but aid erodes accountability because our governments tend to become more
accountable to donors than to their own people.
Aid has also created a dependence syndrome. Too much aid to Solomon Islands has
created a chronic dependence, not only in government but generally in the lives of
Solomon Islanders. Because aid gives an easy ride for the government to deliver services,
successive governments are not able to prioritize generating domestic resources to enable
this country to stand on its own feet as an independent nation.
Aid dependence is evident right down to the village or community level and this syndrome
has shifted the mindset of the current generation of Solomon Islanders, breeding laziness.
Solomon Islanders are a people once known as hard-working, innovative and
independent. . However, many have become spectators of development, relying on handouts from politicians and on donor-funded projects for livelihood. Some of these aid
projects at community level cause conflicts within and between community members, as
there are issues of unfair distribution, nepotism, corruption and the like.
By default, Members of Parliament (MPs), who are supposed to be policy makers, have
become their own victims, because they make promises at election time, and for the rest
of their 4-year term, they are running around, trying to avoid their voters who swarm
around their offices for Rural Community Development Funds (RCDF). The general
public’s lack of understanding of the important roles and responsibilities of the MP as
national leaders, leads to many seeking help for school fees, compensation payments or
boat fares from their MPs, without any regard that the MP may not have the money they
seek in his own pocket or his bank account.
At the community and village level, donor projects and Parliamentarians are relied on to
establish small family or community projects, when resources to start up some of these
projects are locally available. For example, a piggery project would simply require going
into the forest and collecting the readily available bamboo, bush ropes, wood and sago
palm leaves to make the fence. People raised in villages naturally learn how to plant,
maintain and harvest a garden and those who sell their produce in the local markets
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Submission 123
usually earn a lot more than those working in a government office. With piglet prices
ranging from $100 to $300 in the villages, it will not be an issue for someone to make a
cabbage garden which can be harvested within a short timeframe and sold at the market
to generate funds to buy a male and a female piglet to start up a piggery project. Solomon
Islanders know and understand that they have access to rich natural resources, but there
is a general tendency for short-cuts to access money available through donors or
politicians, and this is not good.
Handouts have never been an effective way to achieve economic transformation and
therefore must be discouraged or stopped. Ongoing aid is not going to help the situation,
so this needs to be scaled down so that our government is left to do something for our
country to regain its dignity and reputation as an independent nation. We believe the
handout mentality has been reinforced through channeling too much aid money through
politicians.
Infastructure Development as an area of aid improvement
Rather than busy itself with handouts, the government should think about long term
benefits of the people and economy. Solomon Islands is made up of villages within
islands, and therefore investment in infrastructure is crucial to enable internal movement of
goods, services and people by sea, land and air. Poor infrastructure is holding back the
ability of rural communities to benefit from economic growth and development. Shipping
services and maritime infrastructure including ports, wharves, jetties, and navigational aids
for efficiency and safety need to be improved as much as roads, bridges and airstrips.
Improving infrastructure will contribute to the growth of the SME sector, as rural
populations where the resources most needed for development are located, will be
encouraged to participate in market activities across the islands. Villages located inland
that depend on road transportation will benefit from improved road and bridge
infrastructure. Those located on islands who depend only on movement by boat will
greatly benefit from improved and reliable shipping services. Improvement of maritime
infrastructure will benefit trade because virtually all imports and exports travel by sea.
Government services across the islands will also be improved, including the provision of
education, health and other essential social services, and the extension of financial
services to more remote communities. It is obvious that the government is currently relying
on international aid for infrastructure development, and New Zealand aid for instance is
focusing much of its infrastructure development in the Western Province. Other bilateral
and multilateral aid need to be spread across all provinces for equitable development.
However, in order to reduce aid dependence, our government should be required to match
the amount of aid provided for any and all developments in the country.
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Human Resource Development as an area of aid improvement
One important area that international aid has not really tapped into is the range of skill and
talent available among women and men in the country. Solomon Islands has so many
capable women and men who understand the norms and cultures of Solomon Islands
society well enough to undertake consultant jobs, but this resource has so far been underutilized by the donor community. Solomon Islands citizens with the right set of skills,
knowledge and experience or expertise should be considered as consultants of choice
rather than depending too much on external consultants. This area needs to be improved
if aid is to truly benefit Solomon Islands.
Another area of aid improvement is providing support for international work experience
besides academic study. Solomon Islanders would greatly benefit from exposure to work
experience in developed countries and these could be for mutual benefits, as Solomon
Islanders going abroad would have certain skills and knowledge that would be beneficial to
work colleagues in the host country.
There should be job attachment opportunities to gain experience in a range of areas
related to jobs back home, as well as full time job opportunities for periods of up to two
years. This exposure should be available to citizens in the public and private sector,
including State Owned Enterprises (SOEs), as it will give them greater confidence in the
workplace, confidence in communicating and dealing with diverse people and cultures,
and develop some good work ethics or practices that may be missing in their regular
workplaces. Such work experience should include also trade and industry areas such as
motor mechanics, heavy vehicle drivers, carpenters, brick layers, etc.
When people with international exposure enter into business, they will already have that
experience to deal and communicate more confidently with different types and groups of
people.
Aid Could Support New Technology
With the advent of new technology in Solomon Islands, international aid should also begin
to focus on the use of new technology and innovations to share development. For
instance, the under-sea cable is anticipated to greatly develop internet capacity, so school,
college and university libraries should be fully equipped with internet access and television
for student and staff research and learning. TV programs could be used to teach public
speaking and debating techniques; Health facilities could also be enhanced with modern
technology. Even the public at large would benefit from general awareness such as health
and environmental sustainability issues, disaster risk reduction and other topics, through
television broadcasts and internet access.
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Supporting SME Business Sector as a crucial step for private sector development
The SME development policy launched in 2012 shows the government’s desire to support
SME growth, but it will be of no use if it is just another book to sit on office shelves. SME
development must be inclusive and sustainable. Youth and women must not be left out.
There is an obvious desire and need for comprehensive empowerment programs in
Solomon Islands. Among current initiatives are, the establishment of the National Financial
Inclusion Unit with a secretariat sitting in the Central Bank of Solomon Islands. The
intension is to regularly bring together stakeholders from government and civil society
organizations including the private sector to devise ways of reaching out to the populations
not actively participating in the formal national economy. However, the important issue is
around materializing the emergence and growth of Small and Medium Enterprises (SMEs)
so that our local people can participate in the formal national economy.
Support for Youth
We have a youth bulge situation that is dangerous for this country if the government does
not create an environment that is conducive for useful engagement of the youth masses.
Recently, a Solomon Islands Youth Employment Coalition (SIYEC)2 was formed,
comprising membership from the Ministry of Women, Youth, Children and Family Affairs
and a number of other ministries as well as the Chamber of Commerce, the Secretariat of
the Pacific Community (SPC), Pacific Leadership Programme (PLP) and representatives
of young people. The Coalition will develop a strategic approach to address youth
employment and develop intervention initiatives with support from the SIG to address this
urgent challenge of youth unemployment and youth enterprise development in Solomon
Islands.
Solomon Islands youth problems are no different from other Pacific Island countries.
Young people of Solomon Islands experience many issues including: A low literacy rate of 30% especially in the provinces;
 An inadequate education system with a bottlenecked and eliminatory selection process
that pushes out many school students prematurely at all levels of the education system
without the basic skills for employment & self- employment to successfully make a
living;
 Girls being further disadvantaged in entering secondary school due to female
accommodation shortages in secondary schools, resulting in higher cut off selection
rates for girls, thus more boys than girls entering secondary education
 Increased criminal activities especially in Honiara linked to alcohol and drug related
activities such as the production and sale of kwaso (homebrew), the sale and use of
marijuana, resulting in drunk and disorderly behaviour, assault-domestic violence, and
theft & property damage.
2
Concept note for SI Youth Employment Coalition, Ministry of Women, Youth, Children and Family Affairs [April 2014].
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Human sexuality, sexual & mental health problems, teenage/unwanted pregnancy,
prostitution3 and suicide on the increase.
Rural to urban migration: Young people constitute the majority of people who migrate
to the urban centres for employment purposes, bright lights leaving old people & young
children that are not productive, in the villages;
Unequal distribution of services and facilities to the provinces;
High level of hidden employment and underemployment;
Limited skills training opportunities to match the labour market requirements
In our youth interventions, we must give our youth population access to vision, confidence,
motivation, purpose and clarity of direction by helping them to extract values and principles
affecting their personal attitude, work ethics, business acumen, as well as personal and
professional development. Their achievements in gaining these values will not only benefit
them and their families, but they are also relevant for the development of this nation.
Support for Women
We also have a Ministry of Women, Youth, Children and Family Affairs through which
government can mainstream gender and develop an implementation plan where women
and youth can actively participate in the national economy. This has further resulted in the
development of a National Strategy for the Economic Empowerment of Women and Girls,
soon to be launched. But for any implementation to be effective, government partnership
with civil society and the private sector is crucial.
The active participation of women and youth in the national economy can be realized by
encouraging job and wealth-creation and empowering them to advocate on environmental
issues, as these affect business and the economy. Most of our women participating in
business activities are in the informal economy and own very small businesses, especially
food and personal services that only end up unprofitable, being used to put food on the
table at the end of the day.
There are other opportunities available for women in catering, cleaning, gardening,
landscaping, fresh fruit and vegetable supply, manufactured food (eg dried, packaged
fruits/vegetables), coconut oil products such as body oils, lotions, soap; beauty therapy,
consultancy services.
Women also participate in small family owned businesses in information technology, small
scale constructions, real estate, transport services, media, printing, publications and
information services, tourism and hospitality, agricultural exports.
3
Hassall & Associates International, 2003. Youth in Solomon Islands Report: A Participatory of study of issues, needs
and priorities, p.19 viewed on 18/12/2012 @
http://www.paddle.usp.ac.fj/collect/paddle/index/assoc/ausaid00.dir/doc.pdf.
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Growth and sustainability of SMEs in the country is affected by the many challenges
commonly shared by women, including illiteracy, lack of access to credit, lack of access to
land, intimidation, and more importantly the lack of knowledge and know-how of doing
business. From the donor side, the latter should be an important area of consideration to
assist indigenous Solomon Islanders to become innovative in business.
The World Bank (SI) report on empowering women4 states that resolving current land
issues in Honiara may play an important role in reducing business costs and facilitating
women’s investment in the aid economy. The report identifies some areas of business that
women in Solomon Islands could venture into with information on minimum capital costs
provided. These include Mobile businesses (such as services rendered in one’s own
home), street selling or internet based businesses, which do not incur rental expenses.
Some suggested business ideas for women provided by the study are:
1) Dry cleaning services which has potential for high turnover, but will involve
substantial initial investment, including investment in marketing and market research.
2) Centralized cleaning service: A small business, providing house- and businesscleaning services to business and the expatriate market on a medium to large scale.
Demand would be based on the appeal of a dependable and quality-assured service,
without the need for individual negotiations with cleaning staff. This will require the
employment of an admin officer and the business can be operated from home.
3) Juice Stand: a small, central juice-stand selling pure fruit juices that would cater for
the expatriate and local markets at prices similar to those for similar products in
Australia. A Juice Stand will require the employment of at least 2 unskilled staff and
importing of second-hand equipment from Australia at standard freight rates and
procurement of fresh fruits from Honiara.
4) Phone credit on-selling: This is now a popular business that allows an individual to
on-sell mobile phone credit on behalf of the new provider at a small margin. Vendors
can load credit onto their own mobile phones and transmit this credit to others’
phones while retaining a small margin (8percent has been suggested). This presents
opportunities for Small scale entrepreneurial activity in Honiara and provinces, with
individual retailers on-selling credit.
4
Increasing the participation of women in the Solomon Islands Economy [report prepared by the World Bank,
Solomon Islands], pages vi-x
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5) More sophisticated business operations are available, with sellers diversifying into the
sale of related goods and services on behalf of the telecommunications service
providers and potentially employing staff to on-sell credit at a smaller margin.
Some of these business concepts, such as dry cleaning and centralized cleaning services
are quite new to local people because they are unheard of, especially if the women have
never been exposed to the outside world to see the range of businesses they could
venture into.
A random selection from the SICCI membership list showed the types of businesses
owned or managed by 10 women:
2 women - Food and Catering services
2 women - Travel/Tourism/hospitality
1 woman - Real Estate
1 woman – Agricultural Exporting (family business)
1 woman - Accounting Consultancy services
1 woman - Printing and publications
2 women – do not own but manage shipping companies or shipping services;
The Solomon Islands Women In Business Association (SIWIBA) is one of the Chamber’s
Affiliated Members. Following a long period of struggle since its formation in 2005, SIWIBA
finally secured assistance in 2012 from AusAID through the Pacific Leadership Program
(PLP) for renting of office space and funded staff positions, under a 2-year grant contract.
There is no doubt that SIWIBA is addressing the issue of sustainability beyond this
funding,
SIWIBA has 73 women businesses now registered in the formal sector but there are
difficulties with access to finance, especially start-up capital which will enable them to
survive. Through SIWIBA’s initiative, women now have a regular Flee Market arrangement
which gives them opportunity to showcase their products and earn income. SIWIBA also
runs short training courses on demand.
Barriers to women’s participation in the private sector
 Barriers to women’s participation begin with Education for girls, and there are multiple
barriers –
o cultural norms/obligations accept that a girl’s place is in the home so education of
boys is prioritized over girls;
o infrastructure - dormitories and facilities in boarding schools are prioritized for boys
over girls;
o security of girls – distance walked to get to school in the rural areas is a concern
that causes parents to keep girls at home.

The barriers of security is carried over in doing business.
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o Access to finance for business start-up is limited.
o Bank lending policies are so rigid that they scare away women from even
attempting to apply for loans.
o The Small and Medium Enterprises Council (SMEC) is addressing this need in a
limited way by providing guidance and assistance to SMEs wanting to access
commercial loans.
o The SI Small Business Enterprises Centre (SISBEC) provides small business
training in rural areas but impact is unknown as to how the trainings result in
business start-up for the participants.

Social and cultural expectations are that women are the primary care givers and
therefore her ‘rightful place’ is in the home. Her role in entrepreneurship is not that
highly regarded.

Literacy and access to information is another barrier: women are generally
uninformed. They lack knowledge about available opportunities, steps to take in
establishing a business, the costs involved in establishing and running a business,
and lack of awareness about existing programs where they can access assistance.

There is limited knowledge about scholarships that will increase women/girls’ access
to business studies;

Women are restricted from applying for scholarships for study because of family
obligations – time away for study will impact on family wellbeing, although the long
term benefits are likely to be greater.

Access to training in technical areas is also a barrier, but this is true for women and
men alike. Training organizations like the APTC are said to be very limiting, restricting
access for women. We are informed that they have only 10 spaces available for each
recruitment;

Technical skills to maintain sustainability of a business is usually lacking among
women entrepreneurs.

Women have no financial back-up from the government;
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Women have very little or no skills training from the government.

High rental rates for acquiring office space and accommodation in urban centres like
Honiara, Auki and Gizo is another barrier.

Access to land is difficult.
o It is usually time consuming and costly to find and register land;
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o It is not easy to use customary land as collateral for women entrepreneurs and
bank policies are not flexible to allow unregistered customary land to be used as
collateral.
Current programs of SICCI are intended to address some of the women and youth issues
raised above. We need to motivate and turn Solomon Islanders into an enterprising
population and promote local sustainable development founded on our biggest strength,
which is our human capital – as stated in our SME development policy. This has to start
from the home and extend to the community, and ultimately the province and then the
nation. We have heard of an interesting model in Fiji, where a government program
provides ‘seed money’ to families to develop entrepreneur minds in their children. A child
is given, say, $20 and expected to double the amount by the end of the week. So the child
has to come up with ideas to grow that seed money, targeting one hundred percent
increase by the end of the week.
Giving seed money to families in Solomon Islands may be too much of a risk, but perhaps
trialing this out with a small group of women and youth may be a way to start, and this is
what the Solomon Islands Chamber of Commerce and Industry aspires to do under its
SME Business Development Program, including its Young Entrepreneurs Program which
are discussed below.
The role of the SI Chamber of Commerce and Industry
SICCI is the national body representing the private sector, with current membership of 130
small, medium and large business enterprises. The advantage of SICCI is that apart from
membership of large, medium and small businesses, it has drawn membership and
affiliate membership from high commission offices, all State-Owned Enterprises, two of the
locally based universities, at least one Education Authority, the Chinese Association,
Women in Business Association, and the Manufacturers Association, making it a strong
voice for the private sector. SICCI is now reaching out to the provinces and plans to use its
Corporate Governance Program described below, to invite membership of sporting bodies.
Membership to the Chamber is important because:
1) We hold regular networking events, a good avenue to make business connections and
assist small businesses to join the supply chain.
2) We advocate on major issues affecting businesses and members have the opportunity
to contribute to these discussions to make their voices heard.
3) Membership opens up doors to local and international connections for training,
information on business forums, business development, business partnerships, trade
and other exhibitions or marketing that SICCI members have the privilege of knowing
about. Our members have the privilege of being linked up with overseas suppliers, and
some are able to attend overseas trade exhibitions, business forums and the like,
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establishing international and regional networks and business connections. These
opportunities are not easily available for non-members.
4) Some external support can only be accessed through the Chamber where businesses
compete with other local and regional businesses for assistance, such as the Business
Development Fund within the Pacific Islands Private Sector Organization (PIPSO).
5) SICCI is usually the first point of contact for individuals and businesses wanting to
know more about doing business in Solomon Islands; for those seeking partnerships
with local businesses; for those seeking locally available agents who can be a
distributor of products in Solomon Islands; and for those seeking collaboration with
SICCI to host trade and investment missions and forums.
6) Businesses within our membership have advantage over others in that they are the first
to be informed and invited to participate in programs within their areas of business
interest.
7) We receive external requests through our website for a whole range of business
opportunities such as one who requested to be linked up with businesses or groups
dealing with coconut husks, and we are able to quickly link them up with relevant
organizations within our membership.
8) SICCI also occasionally receives overseas enquiries to verify the existence of
businesses that want to do business with overseas suppliers.
9) SICCI is consulted by government and other stakeholders on private sector related
issues in Solomon Islands.
Contributions of SICCI members to national revenue and employment
SICCI’s simplified definition of small businesses are those with 1-19 employees, medium
with 20-49 employees and large businesses with 50 or more employees, while the SME
Development Policy defines micro, small, medium and large enterprises by their Net
Capital Investment and Annual Turn-Over rates in addition to the number of full time
employees.5
SICCI members and affiliates represent around 30,000 employees. Our most recent
membership survey in 2013 showed that 44 of our member companies (that is less than
1/3 of our members) contributed $130 million on payroll tax and $376 million on payroll
expenditure over the past 12 months. 96% of the employees within these businesses were
local employees while 4% were expatriates.
5
Micro, Small and Medium Enterprises (SMEs) policy and strategy as reviewed and approved by the Cabinet,
December 2012. SIG Ministry of Commerce, Industry, Labour and Immigration., page 10.
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There is a tendency to brand SICCI as the representative organization for big foreign
companies. The truth is, at the moment 62% of SICCI’s membership are Small and
Medium business enterprises. Our small businesses with 1-49 employees represent both
foreign and locally owned businesses and these are in a wide range of sectors.
The significance of the contributions of foreign-owned companies which represent 50% of
SICCI’s membership is that they employ more than 90% of the member company
employees, with at least 93% local employees and 7% expatriates. Not only that, but 90%
of the annual tax and employment expenditure are from foreign-owned and joint foreign
and locally owned businesses.
The role that large foreign investors play for the smaller companies must not be
underestimated either. SMEs provide complementary goods and services to the large
corporations. SICCI has a case example of a family-owned small business that registered
as a SICCI member not too long ago, and during their first show up at one of our
networking events, they secured a business deal with one of the larger companies and
were added to their supply chain.
SICCI support for SMEs, with specific focus on women and youth
Seeing that participation of women and youth in the private sector is largely within the
SME sector, reference is made to the 7 objectives and actions of the Solomon Islands
SME policy6 as a way forward. These objectives include:1. Put in place appropriate institutional framework for SME development
2. Promote a culture of entrepreneurship among Solomon Islanders
3. Facilitate SME access to business development services
4. Put in place mechanisms for SMEs to access appropriate business financing
5. Facilitate SME access to local, regional and international markets and market
information
6. Promote innovation and technological capacity of SMEs for competitiveness
7. Incentivize and simplify the fiscal and regulatory framework for SME growth
We believe the Chamber’s initiatives will go towards addressing some of these policy
objectives and actions, but collaboration with the government and development partners is
key to successful interventions.
SICCI Programs
1. SICCI Learn Fast SME Business Development Program, 2013-2015
SICCI’s focus for 2013-2015 under its EU NSA Grant for the ‘Business Development
Initiative’ is SME Business Development. SICCI and Learn Fast of New Zealand have
6
ibid.
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teamed up to run 3 years of training in SME Business Development. Year one (2013) was
used to develop the concept, hold discussions with stakeholders to identify potential
partners and developing of materials to be used for the program. SICCI is currently
building staff capacity to meet member needs in the areas of training and mentoring under
its various business development initiatives.
The SICCI Learn Fast program wants to create real work or real businesses as a result of
the training offered. It wants to initiate some form of incubator process to support young
people to implement what they are learning and to get them to the point of making money.
The program also intends to train local mentors ‘on the job’, and will be calling for
candidates, highlighting the skills and attitudes they need. The local mentors and young
entrepreneurs will receive training concurrently, with local mentors working alongside
Learn Fast facilitators so they can see the approach needed.
SICCI is also reaching out to the provinces for the first time, and is using business training
and development as a platform to draw membership from SMEs and provinces. During the
implementation period SICCI will target at least 2 provinces besides Honiara, but it
anticipates that beyond 2015, it will extend its targets to several other provinces until all
provinces are covered, provided that there is sufficient financial backing from government
and development partners.
The SME Business Development Program for 2013-2015 hopes to see to the training and
coaching of at least 100 youths for business start-up and training and coaching of at least
100 women in business (existing business, new business or a planned business) by the
end of 2015.
2. Young Entrepreneurs Program
Young women and young men engaged in the SME Business Development Program are
drawn from the Y@W program and SICCI’s Solomon Voices youths who are currently not
in employment plus other youths from Honiara, Guadalcanal and Malaita. The
Guadalcanal Provincial Government has already pledged its support for this program and
will come on-board as a partner. We are yet to discuss the program with the Malaita
Provincial Government.
In preparation for training and mentoring under the SICCI Learn Fast program, some of
the targeted youths have undergone training of Aspiring Entrepreneurs conducted locally
using the ILO Community-Based Enterprise Development module. Those who eventually
set up their own micro-businesses will continue receiving support with training in areas of
need to the point where they will be linked up with the NZAID funded Business Mentoring
Program, currently run for businesses operating for a minimum of 6 months.
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3. Business Mentoring Program
Since 2011, under NZAID funding, SICCI has been coordinating a Business Mentoring
Program with mentors from Business Mentors New Zealand visiting Honiara twice a year
to conduct one-on-one mentoring to successful applicants. Each mentoring visit is followed
3 months later by group training where clients learn from the trainers and from each other
through interactive discussions.
Throughout 12 months the client and their mentor communicate with each other by email
or phone concerning progressive development of the business and addressing areas of
need for the business raised by the client or realized in the course of mentoring.
Clients are assisted with developing their business plan, marketing plan/strategies,
financial and human resource management, and other areas of need. The mentoring
service is free of charge and is available to members and non-members, but SICCI
encourages clients to sign up as members.
So far 115 businesses have benefitted or are benefitting from this program, with 20%
being women. The business sectors represented by these women include: Retail trade,
Finance and business services, personal services, computer and secretarial training,
agriculture and food processing, horticulture, landscaping, café and restaurants, property,
manufacturing, printing, publishing, recording and media.
4. Export Marketing and Quality Assurance
Since 2012, SICCI has been engaged in a NZAID funded Train the Trainers Export
Marketing and Quality Assurance program, along with other Chambers within 8 Pacific
Island Countries. This is a joint program of the Pacific Islands Private Sector Organization
(PIPSO) and the Pacific Cooperation Foundation in New Zealand. SICCI is represented by
the Senior Executive Officer together with a woman director of another member company
who also represents the Solomon Islands Women in Business Association.
Many small and medium businesses are interested in exporting to New Zealand, Australia
and other parts of the world, but there is a knowledge gap in terms of understanding which
quality systems and certifications will assist with entry into the export market. Trade
opportunities for Pacific businesses could be increased if business owners were able to
enhance their quality assurance practices and marketing effectiveness and build better
distribution channels in overseas markets.
The Export Marketing and Quality Assurance program wants to grow the pool of
businesses with export capacity in general and the pool of businesses that can become
part of the ‘True Pacific’ branding which is being promoted in New Zealand. True Pacific is
a quality standard and Pacific businesses must meet strict quality standards in order to
hold a license that allows them to display the True Pacific mark on their products.
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The program provides a broad understanding and appreciation of the importance of
marketing concepts and quality assurance principles and an awareness of the practical
steps involved in applying these. This will allow the National Private Sector Organizations
of each country to communicate these understandings to individual business owners
through training activities.
The export marketing and quality assurance training will form part of the SICCI Learn Fast
SME Business development training and mentoring. SICCI hopes that through this
program, SMEs will be assisted to improve their products by learning more about quality
standards, packaging, labelling and marketing.
5. Corporate Governance Services
The Chamber will continue to actively encourage policies and actions conducive to strong,
sustainable, economic growth and free enterprise, but will remain politically neutral,
advocating on policies affecting the private sector and general issues relating to
transparent and accountable government. To address issues of governance (corruption,
nepotism, conflict of interest, etc), SICCI has an AusAID funded Corporate Governance
program which has been under planning and development as well as internal capacity
building over 2012 and 2013. A Memorandum of Understanding has been signed between
SICCI and Asian Development Bank (ADB) for the design of training modules, and
delivery of training and training of local trainers. The program will initially run seminars
targeted at directors of both private companies and state-owned enterprises and these
seminar series are anticipated to begin in mid-2014.
Public-Private Sector Partnership
1. Celebrating Business Achievements through Business Excellence Awards
The public-private sector partnership is gradually being realized with evidence shown in
SICCI’s collaboration with the Solomon Island Government to give recognition to locallybased businesses through an annual Business Excellence Awards event that began in
2013. The inaugural Solomon Islands Business Excellence Awards event last year worth
more than $750,000 gave recognition to and celebrated business success with businesses
and business owners with a range of awards of business excellence. Ten (10) of the
thirteen (13) award winners were SME’s with only three (3) foreign-owned companies.
Among the winners were one community-based organization from Malaita and one not-forprofit organization in Honiara that also competed for awards. There were also seven (7)
SMEs out of the fourteen (14) runner-up award recipients, demonstrating the value and
recognition that SICCI renders to SMEs in the country. This flagship event of the Chamber
will continue for many more years to recognize SMEs for their business successes.
2. Collaborating to support SME Business Development
The continued growth of the economy is reliant on a vibrant, growing private sector, which
is dependent on an environment of peace, security and stability in which the business
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community can operate and create the kind of economic growth needed to ensure a better
future for all Solomon Islanders. In this regard, support for our youths is crucial.
The SICCI Learn Fast SME Business Development program which will address
entrepreneurship and employment for youth and women, including its provincial outreach
will require substantial support from Government and Development partners through their
bilateral and multilateral programs, to get SMEs to stand on their own feet. This is in line
with the objectives of the SME Development Policy referred to in this submission.
The SI Youth Employment Coalition on the other hand aspires to develop a strategic
approach including developing intervention initiatives with support from the SIG to address
youth unemployment and youth enterprise development in Solomon Islands.
The National Strategy for the Economic Empowerment of Women and Girls is about to be
released and it is important that there is Government commitment with tangible support
towards implementation of the strategy.
3. Partnership in Disaster Response
The two most recent natural disasters of 2013 and 2014 saw greater collaboration
between the SI Government and the private sector. Apart from direct response from the
business community to the Temotu Tsunami victims, SICCI raised more than $600,000
through its fundraising drive efforts – an auction on the Inaugural Business Excellence
Awards Gala Night, and a joint telethon with the Solomon Islands Broadcasting
Corporation (SIBC), the same day.
Likewise, during the recent flash floods that hit Honiara badly, the business community
was among the first for emergency response with water, food and non-food items (NFIs),
despite being hard hit by the disaster themselves. The Chinatown bridge had collapsed,
and with only one two-lane bridge trying to bear with the entire Honiara traffic east to west,
the already congested roads in Honiara became further congested. The brief stand-still
that followed the heavy flooding, slowed service delivery. The limited bridge and police
capacity to deal with traffic and other emerging problems worsened the situation for
businesses and government.
As the national private sector organization SICCI worked very closely alongside the
Ministry of Infrastructure Development, Royal Solomon Islands Police, Honiara City
Council and Ports Authority to work out ways to improve the situation. As a result of this
collaboration, Ports Authority remained opened throughout the nights to enable delivery
and collection of cargo containers, MID worked with Police and other stakeholders to
ensure that the Mataniko bridge was safe, and SICCI sat in a number of cluster groups of
the National Disaster Management Office where it requested interventions from business
houses where and when assistance was needed. This partnership is anticipated to
continue and grow stronger.
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Conclusion and Recommendations
Women and youth can have job and wealth-creation power, if given an environment that is
conducive to them becoming competitive, focused and productive to meaningfully
contribute to the growth of the economy and the quality of the domestic labour market.
An improved environment for SME growth must also include addressing the infrastructure
issues that are limiting market access and restricting the ability of rural communities to
benefit from economic growth and development.
Training provided in entrepreneurship must integrate access to vision, confidence,
motivation, purpose and clarity of direction by helping especially our youths to extract
values and principles affecting their personal attitude, work ethics, business acumen, as
well as personal and professional development. This is good for the nation in the long run.
Human resource development through aid needs to consider the skills and talent of
Solomon Islands citizens and provide consultancy opportunities that are currently offered
to international consultants.
Aid assistance needs to also consider access to information through modern technology.
The use of internet and television will supplement information and research done through
books and other print material. This requires support to educational institutions and
facilities such as libraries and science laboratories, hospitals and other health facilities.
Opportunities for international exposure through short term job attachments and up to 2
years of employment in other developed countries will give Solomon Islands citizens
confidence to work and communicate with people of diverse cultures and gain from
learning new ways of doing things including good work ethics or practices that may be
missing in their regular workplaces.
Local entrepreneurs and aspiring entrepreneurs need good role models, ongoing training,
and personal mentoring and coaching to groom their businesses to a point where they can
stand alone and run. They need to be assisted to get into the supply chain, both locally
and externally.
Pockets of interventions such as those of SICCI, the SI Youth Employment Coalition,
SIWIBA and other Civil Society Organizations not mentioned in this submission, will
gradually lead to the emergence and growth of SMEs, but the donor community must
begin to rethink where and how their resources could be better placed for significant
impact. Our efforts as the national private sector organization are towards increased
skills, employability and productivity towards the future prosperity of Solomon Islands.
… end…
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BIBLIOGRAPHY
Concept note for Solomon Islands Youth Employment Coalition, [April 2014]. SI
Government. Ministry of Women, Youth, Children and Family Affairs
Hassall & Associates International, 2003. Youth in Solomon Islands Report: A
Participatory of study of issues, needs and priorities, p.19 viewed on 18/12/2012 @
http://www.paddle.usp.ac.fj/collect/paddle/index/assoc/ausaid00.dir/doc.pdf.
Increasing the participation of women in the Solomon Islands Economy [report prepared
by the World Bank, Solomon Islands].
Micro, Small and Medium Enterprises (SMEs) policy and strategy as reviewed and
approved by the Cabinet, December 2012. SI Government. Ministry of Commerce,
Industry, Labour and Immigration.
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