Why RAMSI should stay

Now into its fifth year and with no exit strategy in sight, questions are beginning to be asked about the future of the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI). Should it stay or should it go?

In a new Aid/Watch report, Tim Anderson argues that since RAMSI has successfully restored law and order, it should be gradually wound down to make a graceful exit. Dr Anderson correctly points out that large aid-dominated nation building efforts do not have a good track record and come with high costs. The currency swells and some sectors of the economy get crowded out while an elite of highly paid expatriates and locals participates in a foreign funded government bubble.

This does not mean that RAMSI should go. It does mean, however, that RAMSI should adjust its policies to focus on promoting economic growth rather maintaining the status quo.

As far as foreign interventions go, RAMSI is unique. Conceived from its inception as having both a military and a civil component, the aims of the mission were not only to restore law and order to the increasingly violent and unruly Solomon Islands, but also to stick around in the aftermath to oversee reconstruction. Exiting now would leave the mission only half complete. There is little doubt that RAMSI has been successful on the military front, but its contribution to economic development has been mixed.

Aid/Watch bemoans that there is little relationship between GDP and citizen welfare. Although the distribution of wealth matters, economic development means more than just higher GDP figures. It means that people have jobs, access to healthcare and education for their children and are optimistic about the future.

The Solomon Islands has one of the highest population growth rates in the world. Every year some 16,000 young people enter the workforce. Without a growing economy to absorb this swelling pool of unemployed and underemployed youth and put them into jobs, they will continue to gather on the streets of Honiara with nothing to do but sit in the shade and chew betel nut. They are a harbinger of future instability. To maintain the civil stability that has been won, economic growth is a crucial objective, one that RAMSI is justified in pursuing.

But RAMSI has to get it right. There has been little economic growth in the Solomon Islands since independence. Why are health and education outcomes no better than 30 years ago when other countries in the Asian region have transformed their standards of living within a generation?

The underdevelopment of the Solomon Islands suggests it has had some pretty lousy governments since independence. It is also damning of the many aid organisations who can show little improvement for their hundreds of millions of dollars of largesse.

The Solomon Islands does not remain poor for a lack of attention. Hundreds of reports have been written and submitted by countless multilateral bodies and NGOs over decades. The same recommendations and the same promises have been made, yet the reforms that are essential to remove constraints in agricultural and private sector development have been ignored.

RAMSI has done better than its predecessors and built a base for future growth by overseeing the restoration of macroeconomic stability in the Solomon Islands. But efforts to increase economic production have focused on reducing regulatory barriers to business in Honiara and encouraging foreign investment. The Solomon Islands, where most people do not even participate in the cash economy, now has world-class banking regulations.

The majority of Solomon Islanders have not benefited from these measures because this is not where the bottlenecks to economic growth are. RAMSI is right to be pursuing reform, but it has been persistently aiming at the wrong targets.

Agriculture is the key to raising rural living standards and existing land tenure is the key impediment to raising agricultural output and incomes. Traditional land ownership was appropriate to subsistence farming, where the areas of land being worked changed according to family needs, but a move to cash production needs property rights in land. Separating use rights from ownership rights using long-term leases can unlock productivity gains without destroying traditional ownership. Land surveys and land registration are necessary first steps.

Infrastructure is another key constraint. Agriculture and small off-farm business cannot develop without inter island transport, mobile phones and roads to link producers and consumers.

RAMSI has played a crucial role in restoring peace to the Solomon Islands and can play an equally crucial role to its future development and stability – but only if it targets the constraints that have locked the population into poverty since independence. Unless it is involved in raising agricultural productivity and increasing the provision of infrastructure including education, RAMSI risks becoming another in a long line of agencies that have promised much but delivered little.

Gaurav Sodhi is a researcher at The Centre for Independent Studies