Plagued by weak governance, high poverty rates and recurring social unrest, Solomon Islands currently is the biggest recipient of Australian official development assistance in the Pacific. The former British protectorate, which the United Nations still classifies a least developed country, has a predominantly rural population with 87 percent of citizens residing in the countryside and subsisting mainly on small-holder agricultural production. Foreign assistance has played a front-line role in the country’s development efforts, with ODA still being a key funding source for its government.
Having a primary commodity-based economy means the country is reliant on imports of manufactured goods. Timber has long been Solomon Islands’ main export, but heavy deforestation due to logging has prompted a conscious shift to other abundant resources: both foreign firms and donors have channeled their investments to boosting cocoa, copra and palm oil production, along with gold mining operations. Government policy itself is focused on ensuring food security for the local populace, although it has recognized agriculture as the likely basis for broad-based sustainable growth. Meanwhile, the high cost of imported fuel drives the preference for renewable energy sources, with the state and its bilateral donors supporting initiatives to develop minihydro, solar, wind power and biofuel systems.