SOLOMONS NEEDS US$ 166.4 MILLION FOR BUDGET, DONORS TOLD

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HONIARA, Solomon Islands (February 27, 2001 - Solomon Islands Broadcasting Corporation/PINA Nius Online)---The Solomon Islands government needs more than SI$ 840 million (US$ 166,404,000) to help finance its budget for this year.

In a paper on the 2001 Peace Budget presented at the consultative meeting with aid donors yesterday, Finance Secretary Leslie Teama said the government expects to raise SI$ 189.5 million (US$ 37,539,950) in revenue.

The government expects to spend SI$ 463 million (US$ 91,720,300) in recurrent expenditures. It therefore needs SI$ 280.9 million (US$ 55,646,290) from external sources to fund the recurrent budget deficit.

On the development budget, Mr. Teama said the government would need SI$ 563.3 million (US$ 111,589,730) to finance programs and projects aimed at driving peace, restoration of law and order, ensuring maintenance of social services and economic reform.

He said the government is not expected to contribute a cent to this development budget.

Mr. Teama said with aid donors' assistance and support for the 2001 Peace Budget, the Solomon Islands will be able to survive the current economic crisis.

Some aid donors have already indicated that they will only assist the Solomon Islands if the government will assist itself first.

The government expects to table the 2001 Peace Budget in Parliament by mid-March.

Prime Minister Manasseh Sogavare told the meeting that the government is virtually depending on local and overseas borrowings to bridge its budgetary gaps.

He was supported by figures released by the Central Bank Governor Rick Hou.

Mr. Hou said if the trend continues the Solomon Islands will exhaust its foreign savings within the next few months.

He said if this happens, the country will not be able to import basic needs such as food, medicines and fuel.

Mr. Hou called on development partners to be sympathetic to the country's efforts to revive the economy after all it had gone through.

Meanwhile, the aid donor community has started responding to the government's request for help in rebuilding the country after the devastation caused by the two years of ethnic conflict.

Minister of National Planning and Human Resources Development Michael Maina said outside of the aid donors meeting that the British government is to give more than SI$ 7 million (US$ 1,386,700) towards primary education.

Mr. Maina confirmed that documents for the assistance will be signed in Honiara this week.

Minister of Education William Gigini said the money will go towards the purchase of equipment and other much needed materials for primary schools.

Britain is the second country to assist the education sector. Since last year, New Zealand has assisted with the operational costs of community high schools.

The government explained to aid donors why it has granted remissions to certain businesses and investors despite its fall in revenue.

Finance Secretary Teama said that the government was conscious of the fragile business and investment environment resulting from the ethnic tension.

It has therefore embarked on a policy aimed at restoring the confidence of the few remaining major businesses and investors.

Mr. Teama said the government has granted tax relief by way of remissions to selected investors and businesses to assist them recover from losses incurred as a result of the ethnic conflict.

The government's granting of remissions has come under heavy criticism from the Parliamentary Opposition.

In other developments:

* The Peace Monitoring Council believes members of the police and prison services may still be holding on to a number of police weapons that have not yet been accounted for.

Chairman Sir Peter Kenilorea said an inventory of the Rove police armory last week by international peace monitors confirmed more than 500 police weapons have still not been accounted for.

He said police have said that law and order and national security can only be maintained when all weapons are safely kept at the police armory.

* About 800 public officers who had been sent on unpaid leave due to the government's financial problems since the height of the ethnic tension have been recalled to duties.

* Opposition MP and a member of the government deposed in the coup in June last year, Alfred Sasako, called on the aid donors to uphold the principles of democracy or be damned for double standards.

Mr. Sasako was a minister of state in the government that was deposed following a June coup by members of the Malaita Eagle Force militia and elements of the police paramilitary force.

For additional reports from the Solomon Islands Broadcasting Corporation, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Solomon Islands Broadcasting Corporation.

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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