Aussies go home: New Solomons PM rocks the boat

By Craig Skehan in Honiara
May 5, 2006

The effectiveness of efforts to stabilise the strife-torn Solomon Islands is in doubt with the formation of a new government deeply suspicious of financial controls imposed by the Australian-led intervention mission.

The incoming prime minister, Manasseh Sogavare, warned yesterday that Australian officials working in the country's finance ministry should be replaced by locals, opening the likelihood of diplomatic tensions.

"Some of the Australians are now wondering what their future might be," said an expatriate, speaking anonymously.

Mr Sogavare said yesterday that where "qualified and capable" Solomon Islanders are available they should again take over decision-making roles in key areas. "One of them is the Department of Finance," said Mr Sogavare, who was elected in parliament yesterday by 28 votes to 22, in the wake of the recent politically-motivated riots.

Mr Sogavare is leading a five-party coalition including some MPs previously under investigation for financial irregularities.

The Howard Government has repeatedly said better financial controls are a non-negotiable prerequisite for the more than $200 million a year Canberra is spending on the Australian-led Regional Assistance Mission to the Solomon Islands to stem ethnic strife and corruption.

The Foreign Minister, Alexander Downer, congratulated Mr Sogavare, and said the Government looked forward to working with him. Mr Downer will visit Honiara this month for talks on the intervention's future.

Australians occupy key positions in the Solomons. Joanne Hoffmann is the Accountant-General, for example. She has been abused for not approving the disbursement of funds and for insisting on proper accountability for spending.

This has included angry responses to her refusal of funds for some overseas travel, not least one episode which infuriated the parliamentary Speaker, Sir Peter Kenilorea.

There are 17 Australians in the "financial management strengthening program" involved in crucial sectors such as budget strategies and debt management.

More Australians hold positions in the economic reform unit, which deals with highly sensitive administrative areas such as taxation compliance.

An email from an Australian finance department official, Mick Shannon, leaked last week, said Mr Sogavare would be a "disappointing choice" as prime minister and expressed fears that a change of government could result in Australia having less of a voice to "guide economic and fiscal policy".

The general secretary of Mr Sogavare's Social Credit Party has called for the country's central bank to provide large interest-free loans to pay for development projects and a tripling of the minimum wage for both the private and public sectors.

Mr Sogavare, a former permanent secretary for finance, said he would exercise responsible economic management. New policies would be jointly agreed with his four coalition partners.

He said any intended fiscal policy changes would be discussed with donor nations, the World Bank and the International Monetary Fund.

After the 2000 coup, some politicians and officials - and armed gangs - pilfered tens of millions of dollars in public funds. There is strong evidence of ongoing corruption, including bribery, in the forestry and fisheries sectors.

Mr Sogavare yesterday expressed displeasure with the regional assistance mission for failing to arrest some key figures in the previous government, sometimes referred to as "big fish", for corruption.

"The question is why they have not arrested people that are known of," he said.

The comment reflects suspicions that some politicians had not been charged because they were compliant with Australian dictates in relation to financial reform and governance issues.

Insiders say there are politicians from all sides still under investigation, including some in Mr Sogavare's five-party coalition.

Before his election, Mr Sogavare and some political allies signalled they would shift diplomatic recognition from Taiwan to China, amid allegations the Beijing and Taipei have been buying MPs with pork-barrel aid money.

But Mr Sogavare would not say yesterday when he expected a cabinet decision on the issue.

He said he would tackle the hard job of formulating joint coalition policies and hoped to announce them and a ministerial line-up early next week.

He said there was a feeling among many Solomon Islanders that the regional assistance mission had been doing a generally good job on law and order, providing services and strengthening institutions since its deployment three years ago.

The opposition position had been unfairly misrepresented as being against the intervention, Mr Sogavare said.

"But, of course, that is not to say the group does not have some strong positions on the future of RAMSI," Mr Sogavare said.

In 2000 Mr Sogavare said provisions for the Australian-led operation threatened sovereignty.

Talks between Mr Sogavare and the head of the regional assistance mission, Australian diplomat James Batley are expected.

News source: Sydney Morning Herald (http://www.smh.com.au)