Solomon Islands

Key trends and development challenges

Solomon Islands is an archipelagic state situated in the Pacific sub-region of Melanesia. With a GDP of $1.6 billion, Solomon Islands is the third-largest economy in the Pacific Islands and accounts for almost 4% of regional GDP. The country has a population of around 800,000, resulting in a GDP per capita of $2,005, ranking last in the Pacific. Its exclusive economic zone (EEZ) spans 1.5 million square kilometres, the 22nd-largest globally, comparable in size to the EEZ of the Philippines.

Solomon Islands has the seventh-highest official development assistance (ODA) to gross domestic product (GDP) ratio in the Pacific Islands region, with aid accounting for 20% of GDP. In a global context, Solomon Islands remains among the most aid-reliant countries in the world, with its aid as a share of GDP ranking 13th among 125 developing countries. The Solomon Islands government’s development agenda focuses on infrastructure investment and economic diversification. At 0.584, Solomon Islands’ Human Development Index score ranks 156th out of 193 countries.

Between 2008 and 2023, annual official development finance (ODF) disbursements to Solomon Islands — including grants, loans, and other forms of assistance — averaged $341 million. Around 6% of the development finance received by Solomon Islands during this period came in the form of loans. Loan assistance peaked at 22% of total ODF in 2019 but declined in successive years to less than 10% in 2021. In 2022, the Solomon Islands’ government signed a $66 million loan with China to build 161 mobile communication towers. The International Monetary Fund ranks Solomon Islands’ risk of debt distress as moderate.

Development partners and sector trends

The vast majority (85%) of ODF support to Solomon Islands in 2023 came from five development partners, led by Australia (34%), China (19%), the World Bank (18%), New Zealand (7%), and Japan (7%). Since switching recognition from Taiwan to China in 2019, Chinese financing has played a growing role in the ODF mix of Solomon Islands. Since 2021, China has been the country’s second-largest aid partner, providing finance for stadiums and facilities for the 2023 Pacific Games in Honiara, upgrading university facilities, and enhancing policing support.

ODF disbursements in Solomon Islands were largely consistent with regional trends in terms of sector distribution. The government and civil society sector featured prominently, accounting for close to half (46%) of incoming financing. This is driven in part by flows of ODF to discretionary government and parliamentarian funds, such as the country’s Constituency Development Funds. Human development spending has remained higher than infrastructure spending in Solomon Islands since 2008, with the exception of a spike in 2019 as a result of spending on the Tina River Hydropower Development Project. Solomon Islands was one of a small number of Pacific states that did not see a significant spike in human development spending during the pandemic.

Since 2008, Solomon Islands has received $308 million in development financing with a “principal” focus on either climate adaptation or mitigation. Over this same period, the country has seen $563 million in development financing with a “significant” focus on climate outcomes. Since 2015, Solomon Islands has seen a substantial rise in spending on climate-targeting projects. As a share of total ODF received by Solomon Islands, “principal” climate projects made up just 6% of total spending, below the regional average of 8%. Spending on “significant” climate projects in Solomon Islands made up 10% of incoming funds, slightly below the regional average of 11%.

Between 2008 and 2023, Solomon Islands received $54 million in development financing with a “principal” focus on gender equality, and $1.3 billion in development financing with a “significant” focus on gender equality. “Principal” gender equality financing constituted 1% of ODF received by the country, in line with the regional average. Conversely, “significant” marked gender financing made up 25% of incoming ODF, above the regional average of 22%. The largest project directly targeting gender equality in the country was the multi-year $23 million Addressing Gender Equality project, funded by Australia and the United Nations Development Programme.