The MCC-Solomon Islands Threshold Program is a partnership agreement between the Government of the Solomon Islands and the U.S. Government through its Millennium Challenge Corporation (MCC).
This $20 million investment from the American people aims to address the country’s biggest constraints to economic growth: ineffective management of natural resources in the forestry sector and lack of secure access to land, which limits tourism investment. Together we are working in partnership to create greater opportunities for Solomon Islanders through two projects: the Forest Value Enhancement Project (FoVEP) and the Accessing Land for Tourism Investment Facilitation (ALTIF).
Solomon Islands, an archipelago of 997 islands in Oceania, is a small, remote island economy that faces substantial development challenges.
Logging accounts for more than half of the country’s exports and directly provides more than 20 percent of the government’s tax revenue; however, decades of unsustainable logging production have left forests over-harvested, resulting in environmental damage that incurs significant costs to the country. Without developing alternative forest management strategies, forests will no longer be the important economic and environmental resource that they are today.
With the decline of logging, the economic future of Solomon Islands will depend on investment and growth in other sectors, including tourism. Tourism offers a key opportunity for job creation, but is hampered by challenges related to securing land for investment, establishing an attractive environment for investment, and limited government capacity to facilitate investment. Without a coordinated and committed effort to grow the tourism sector, Solomon Islands will likely continue its dependency on natural resource extraction, which limits diversification and promotes a more fragile social contract between the state and its citizens.
MCC-SOLOMON ISLANDS THRESHOLD PROGRAM OVERVIEW AND BUDGET
The MCC Board of Directors selected Solomon Islands for Threshold Program assistance in December 2018. On January 22, 2022, MCC and the Government of Solomon Islands signed the MCC-Solomon Islands Threshold Program Grant Agreement, formalizing a partnership that aims to encourage sustainable development and alleviate poverty.
The US$20 million investment will work to yield economic growth in the natural resource management and tourism sectors.
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