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Tuesday, May 16, 2006

Aid Dependency encourages lazy population

By George Herming

Solomon Islands needs to depend less on aid support if the country is going to sustain its economy in the long term, says Central Bank Governor Rick Hou.

The country has received a lot of aid money since independence which increased dramatically in recent years.

“We are among the highest aid per capita recipient in the region and yet the country is categorised as one of the poorest,” Mr Hou said.

Nearly half of the growth in the country’s foreign reserves is accounted for by donor support.

“But this dependency on donors, although appreciated, is not good for our country.

“Heavy dependence on donors undermines our growth potentials because in most cases, it encourages a lazy population,” the Governor said.

Recent estimates put Solomon Islands per capita income at around US$651 well behind most regional neighbours.

It is believed that donor funds have been unwisely used.

“It is obvious that we have not been investing donor funds in worthwhile assets.

“Instead of working hard, we seek donor assistance as a quick fix to our problems.

“But once the donor funds dry up, our efforts quickly falter,” he warned.

At this stage Mr Hou acknowledged that donor support is critical to our recovery process after the recent crisis that destabilizes our economy.

News source: Government Communications Unit


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