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Meanwhile, leaders in Bougainvillevowed to establish a BougainvilleReconciliation Government in thenew year, outside the terms of theconstitution if necessary. This was asignificant setback for the peaceprocess, and also a setback for Skate,who had been able to claim progresson the Bougainville issue as one of hisgovernment's most notable achieve-ments.

TERENCE WESLEY-SMITH

References

PIR, Pacific Islands Report. Daily websiteservice. Honolulu.

PR, Pacific Report. Fortnightly newsletter.Canberra.

Wesley-Smith, Terence. 1998. Papua NewGuinea. The Contemporary Pacific 10 (2):446-455.

SOLOMON ISLANDS

On 7 July 1998 Solomon Islands cele-brated twenty years of constitutionalindependence. The highlight of thecelebrations was the first MelanesianArts and Cultural Festival, whichbrought together in Honiara perform-ers from Papua New Guinea,Vanuatu, Fiji, and New Caledonia.There was even a delegation fromTaiwan. The festival also coincidedwith the nation's annual Trade andCultural Show. Furthermore, twoweeks prior to the independenceanniversary celebrations, Honiara hadhosted the Pacific History Associationconference, which attracted morethan a hundred budding and estab-lished Pacific Islands scholars fromthe Pacific Islands and beyond. It was

a busy time for Honiara.The events of June and July reflect-

ed a politically busy year for SolomonIslands. Generally, 1998 was a year ofpolitical optimism. The governmentpushed for reforms and seemed confi-dent that its program would steer thenation away from the political insta-bility and economic hardships thathave characterized the public land-scape in the last two decades. It wasobvious, however, that many of thereform proposals were not entirelynew. They reflected neoliberal andeconomic rationalist initiatives else-where, especially those propagated byinternational financial institutions andaid agencies.

To understand the political eventsof 1998, it is necessary to have someknowledge of the political and eco-nomic developments of previousyears. In particular, the factors thatinfluenced the outcome of the August1997 national elections are pertinent.

Solomon Islands since indepen-dence has been characterized by ahigh turnover of governments, whichresulted from, among other factors,undeveloped political party systems,individually biased voting patterns,and the frequency of motions of noconfidence against successive primeministers. Consequently, SolomonIslands has had eight governmentsand five prime ministers in the lasttwenty years, making it difficult toimplement policies. Governmentsoften did not survive the four-yearterm and spent much time and efforttrying to stay in power.

Furthermore, by the beginning ofthe 1990S the economy had fallenthrough the cracks, causing debts torise beyond the government's ability

444 THE CONTEMPORARY PACIFIC· FALL 1999

to repay. By the end of 1997 govern-ment debts amounted to SI$1.2 bil-lion, which was more than double thecountry's 1998 budget. The debt crisiswas exacerbated by successive govern-ments' failure to service loans. By theend of 1997 arrears from loans hadreached a staggering SI$192 million.This deteriorating economic situationwas caused by a variety of factorssuch as: a weak balance of paymentsexposed by the collapse of the logexport trade at the end of 1997;uncontrolled government spendingand noncollection of revenue, result-ing in a history of large unbudgetedfiscal deficits; massive public debtarrears and denial of further credit tothe government, which placed exces-sive pressures on both the governmentbudget and foreign reserves; weakpublic administration characterized bylow productivity; low levels of skillsand morale; the collapse of manage-ment and maintenance systems linkedto the poor financial perfo-rmance ofthe public sector, resulting in rapiddepreciation of economic and socialinfrastructures and services; theabsence of political will on the part ofgovernments to undertake reforms;and the lack of a coherent and feasi-ble strq,tegy for the correction ofstructural weaknesses of the economy.

The negative political and econom-ic situations were exacerbated bywidespread allegations of corruptionand the misappropriation of publicmoney. In 1995, for example, fivecabinet ministers were charged withreceiving bribes from an accountancyfirm and a logging company. In 1996thirty-five public servants were sus-pended after allegedly misappropriat-ing SI$1O million of public money.

In 1997 a number of governmentministers and senior public servantsallegedly misappropriated SI$ 1.3million from a Special Project Develop-ment Fund paid to the Ministry ofForeign Affairs as compensation forillegal fishing in Solomon Islandswaters. Despite these allegations, noone was convicted. A few publicservants have either been suspendedor redeployed to other ministries.

By the time Solomon Islanderswent to the polls in August 1997there was widespread desire for achange of government. Nearly everycandidate went into the election call-ing for "change" as part of theircampaign rhetoric, an idea thatcaught the attention of a public dis-satisfied with the state of the economyand the inability of the previousgovernment to alleviate the problems.Consequently, 48 percent of themembers of Parliament who soughtreelection were defeated.

Immediately after the elections acoalition government of seven politi-cal parties was elected to power, withBartholomew Ulufa'alu as primeminister. The government includeda number of new politicians whorepresented a younger generation ofleaders. Among them were peoplelike Manasseh Sogavare, Fred Fono,Patterson Oti, Dr Steve Aumanu,and Alfred Sasako, who brought toParliament their experiences in thepublic service and the private sector.They had been staunch critics of theprevious Mamaloni-Ied governmentand immediately pushed to detourfrom its paths. They named theirgroup the Solomon Islands Alliancefor Change (SIAC) government.

Within weeks of being elected to

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office, they put together a policystatement advocating economic andadministrative reforms. The details ofthe reform program, however, werenever widely discussed, and the con-cept was relatively new for a majorityof Solomon Islanders. Nevertheless,the reform program was soonlaunched as a consequence of wide-spread support from internationalinstitutions and aid agencies, and aPolicy and Public Sector ReformCommittee was later established towork out the details. It was the mostimportant agenda item for the SIACgovernment during its first year inoffice, and included plans for privati-zation and restructuring of the publicservice.

In its privatization program, thegovernment proposed to sell its sharesin Solomon Telekom, the companyresponsible for telecommunication inthe country, and Solomon IslandsPlantations Limited, which invests inthe oil palm industry; Both are joint-venture operations between the Solo-mon Islands Government and Britishmultinational companies. The govern-ment owns 58 percent of shares(about sl$I7.6 million) in SolomonTelekom, while the other 42 percentare held by Cable and Wireless of theUnited Kingdom. The plan was forthe government to sell 48 percent ofits shares to Cable and Wireless,reserving the other 10 percent for theInvestment Corporation of SolomonIslands, the government's investmentarm. The other option is for the gov-ernment to sell its shares to the Solo-mon Islands National Provident Fund,the country's only superannuationscheme.

With Solomon Islands Plantation

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Limited, the Solomon Islands Govern-ment owns 30 percent of shares(SI$13.7 million), another 68 percentbelong to the Commonwealth Devel-opment Corporation, and the remain-ing 2 percent are held by the land-owners of the Guadalcanal Plains.The plan was for the government tosell 20 percent of its shares (SI$9.1million) to the CommonwealthDevelopment Corporation, leaving theother 10 percent with the InvestmentCorporation of Solomon Islands.These shares will be paid into a TrustUnit to be set up in 1999, and eventu-ally sold to interested local peopleand monitored by the Trust Unit(Star, Oct 1998).

The other major aspect of the SIACgovernment's reform program isrestructuring the public service, whichhas proven to be an expensive institu-tion marred by poor productivity andlow levels of skills and morale. In1997, public service salaries claimedan increasingly significant proportion(35 percent) of recurrent expendi-tures, taking into account the unbud-geted 14.5 percent salary increase forpublic service employees at the end of1996. The reform program aims torestructure the public service in orderto make it smaller and less expensive,as well as to encourage transparency,accountability, cost-effectiveness, andefficiency. A greater role is to be givento the private sector through out-sourcing. Under the proposed reformprogram, approximately 550 publicservants would be made redundant, ameasure that was expected to saveabout sl$16.5 million. Under theredundancy package the first affectedwould be permanent secretaries, whohave been recommended for early

THE CONTEMPORARY PACIFIC' FALL 1999

retirement. In a letter to permanentsecretaries in July 1998, the govern-ment stated that the reason for theirpremature retirement was to facilitateimprovements in the public service.They were, however, given thirty daysfrom 28 July to make representationsto the Public Service Commission(SIBC News, 3 I July 1998). New sec-retaries to ministries were appointedin December 1998.

As a result of plans to layoff pub-lic servants, a redundancy packageworth about SI$7.2 million was final-ized in September 1998 to be award-ed to the first 550 public servants tobe laid off. Funding for the packagewas secured under a program of loanassistance from the Asian Develop-ment Bank (Star, 29 Sept 1998).

Furthermore, as part of the govern-ment's attempt to reduce the size ofthe public service and make it moreefficient and effective, the administra-tive functions of several governmentministries have been amalgamated(SIBC News, 17 July 1998). However,the number of ministries has increasedfrom fourteen to twenty, attractingnumerous criticisms from the publicand causing skepticism about the SIACgovernment's plans to reduce the sizeof government. A letter to the editorin Solomon Star (28 July 1998)doubted the government's claim thatit would save money under the reformprogram. The author stated that 550officers receiving an average ofSI$10,000 each for a minimum serviceperiod of ten years would cost thegovernment about sl$6 million inredundancy payments. Moreover, anadditional payment of 51$6 millionwould drain the National ProvidentFund of its financial resources. In

total, payments made to layoff 550officers would come to about SI$12million. But the government is bor-rowing from the Asian DevelopmentBank to pay for the redundancy exer-cise. What are the implications of thisloan for the long term?

Another interesting aspect of thereform program is that despite theprime minister's claim that the pro-gram was "home brewed," it soonbecame obvious that much of whatwas proposed characterized reforminitiatives elsewhere in the developingworld. These reflected agendas propa-gated by international institutions andaid agencies. Within months of theSIAC government's establishment,Honiara was hosting representativesfrom the World Bank, the Interna-tional Monetary Fund, the AsianDevelopment Bank, and the EuropeanUnion. Aid donors were quick toexpress support for the government'sreform programs. The EuropeanUnion, for example, in July 1998granted Solomon Islands US$I.3 mil-lion under a financing agreement tobe used for strengthening the adminis-tration of the Ministry of NationalPlanning and Development, in partic-ular, the administration of EuropeanUnion-funded projects. That was inaddition to an ongoing us$23 millionin development assistance to SolomonIslands from the European Union(PACNEWS, 13 July 1998). In anotherdevelopment, the British government,in August 1998, announced its cancel-lation of Solomon Islands' aid debt ofus$ 5 million. This was as part of agesture of support to the SIAC govern-ment's reform program. The debt waspart of a loan taken in 1981 as anindependent settlement from the

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British government (SIBC, 7 Aug1998). Furthermore, to support thegovernment's reform program, theAsian Development Bank approved aloan of US$25 million to assist clear"debt arrears, right sizing the publicservice and improving public sectormanagement" (PACNEWS, I} July1998). At the time of writing, a fur-ther loan of US$IO million was beingnegotiated with the World Bank toassist the government in the areas ofeducation, health, and the country'sfinancial sector (SIBC, 12 Oct 1998).

In the midst of the public-servicereform euphoria the realities of Solo-mon Islands political culture werenever far away. During the first sittingof Parliament under the new govern-ment, in April 1998, a motion of noconfidence was moved against PrimeMinister Ulufa'alu. It followed allega-tions that the prime minister wasinvolved in the illegal sale of govern-ment houses and land in Honiara.Again, on IS September 1998, anoth-er motion of no confidence wasmoved against the prime minister,triggering a major constitutional crisisthat landed the governor general, thegovernment, and the opposition incourt.

The September motion of no confi-dence followed months of politicalwrangling between the opposition andthe government. It was sparked off bythe prime minister's sacking ofFinance Minister Manasseh Soqavarein July, which resulted in two govern-ment ministers and three back-benchers leaving the government:Minister for Education and HumanResources Development Ronidi Mani;Minister for Police and Justice LesterSaomasi; and backbenchers, Allan

447

Paul, Nathaniel Waena, and JohnsonKoli. Consequently, by early Augustthe opposition had made a submissionto the governor general seeking theprime minister's resignation becausehe allegedly did not have the majorityneeded to rule. To back its claims theopposition presented a list containingtwenty-five signatures to prove it didhave the numbers to rule. This wouldgive the opposition a clear majority inthe 49-member Parliament. (SolomonIslands Parliament normally has 50members. However, the member forGao-Bugotu, James Saliga, died earli-er in the year.) Opposition Leader JobDuddley Tausinga called on the primeminister to resign because he nolonger had the support of the mem-bers of Parliament, saying it would be"an abuse of the democratic systemenshrined in the constitution and amockery of the principles of trans-parency, responsibility and account-ability" (PACNEWS, 10 Aug 1998). Theopposition deman-dedthat ifUlufa'aludid not resign then the governor gen-eral must call a special meeting ofParliament to vote on a motion of noconfidence (PACNEWS, 7 Aug 1998).

At that time, Governor General SirMoses Pitakaka was in Brisbane formedical treatment. Acting GovernorGeneral Paul Tovua, who was also theSpeaker to the National Parliament,in considering the opposition's sub-mission, rejected calls for a specialmeeting of Parliament. In a letter ofII August 1998, Tovua informed theopposition leader that there was noneed to call for a special parliamen-tary session because the next meetingwas scheduled for 12 October (Star,12 Aug 1998).

When the governor general

THE CONTEMPORARY PACIFIC· FALL 1999

returned, he at first upheld the actinggovernor general's decision. However,a few days later he reversed the deci-sion and called for a special parlia-mentary session to vote on the motionof no confidence. This ignited a majorpolitical uproar and constitutional cri-sis. After much constitutional debate,Parliament eventually met on 18 Sep-tember 1998 to discuss the motion ofno confidence. After a short debate, avote was taken, ending in a 24-votetie. The member for West Honiara,Lester Saomasi, was in Rennell-Bellona Province and refused to travelto Honiara despite the oppositionchartering an aircraft to bring himback.

The events of July to Septemberwere nearly a replay of the 1994 inci-dent that resulted in the collapse ofFrancis Billy Hilly's government afteronly eighteen months in office. Withintwelve months of taking office, theUlufa'alu-Ied SIAC government facedtwo motions of no confidence, whichtook a lot of time and effort awayfrom its reform program. Further-more, there is no guarantee that thisepisode will not be repeated in theremaining three years of its life.

Following this experience, PrimeMinister Ulufa'alu stated that there isa need to amend the constitution tolimit the number of political parties inthe country. This, he stated, would"ensure political stability and enablethe government of the day to imple-ment its policy and programs. . . .There is a need to develop politicalparties more professionally, so thatthose contesting national and provin-cial elections can run on party plat-forms which have ideologies, princi-ples, policies and objectives" (Radio

Australia, Pacific Islands Report, 25Nov 1998).

Parliament eventually met inOctober and did not adjourn untillate November. Apart from the 1998budget, a number of bills werepassed. These included the FisheriesBill, the Environment Bill, and theLeadership Code Bill.

By December, the country wasbeginning to settle down for theChristmas and New Year holidays.But the peace was disrupted by inter-island tensions between Guadalcanaland Malaita people following assaultsori a number of Malaitans living onGuadalcanal. The events were con-nected to statements made by Guadal-canal Provincial Premier EzekielAlebua during the handing over ofalienated land at Lunga, east ofHoniara. During the handing-overceremony he made statements to theeffect that other settlers in Honiaramust respect Guadalcanal people andtheir cultures. Some young Guadal-canal men interpreted that as a signalto chase other Islanders, especiallyMalaitans, who have settled onGuadalcanal. The premier also out-lined a number of demands the Gua-dalcanal Provinces intended to submitto the central government.

By mid-December, the crisis hadtaken a militant turn. Some menattacked a police station on Yandinaon the neighboring Russell Islandsand obtained arms. On 30 December1998, a young man from Guadalcanalwas shot dead by police at MbunganaIsland in the Central Islands Province,and another was wounded. By NewYear's Day 1999, the crisis had fur-ther escalated. Yet the governmentcontinued to use the police despite the

POLITICAL REVIEWS· MELANESIA

availability of other avenues for con-flict resolution.

It was a gloomy end for 1998 anda frightening beginning for 1999. Itseems the Bougainville crisis has beenreincarnated across the border in

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Solomon Islands. This overshadoweda politically active 1998 and an opti-mistic year for many SolomonIslanders.

TARCISIUS TARA KABUTAULAKA