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HONIARA, Solomon Islands (April 1, 2002 - SIBC/PINA Nius Online)---Prime Minister Sir Allan Kemakeza, facing heavy political pressure over the devaluation of the Solomon Islands dollar, has sacked his Finance Minister, Michael Maina.

Mr. Maina had announced the 25% devaluation during his budget address last week and said it was essential to save the country's remaining external reserves.

He won praise from the Central Bank for taking tough measures that the bank considered long overdue. But there was anger in Sir Allan's coalition government. Many members are believed to have first heard of the devaluation when Mr. Maina announced it.

Opposition groups in Parliament have moved a vote of no confidence in the government as a result.

Sir Allan said the sacking resulted from the lack of consultation by Mr. Maina on the devaluation.

To avoid a constitutional crisis and political instability he decided to sack Mr. Maina effective immediately, Sir Allan said.

Sir Allan thanked Mr. Maina for his dedication and hard work with the Ministry of Finance, saying the former minister will be approached later in an effort to have him continue to assist the government.

Sir Allan appointed the Member of Parliament for West Guadalcanal, Laurie Hok Si Chan, as the new Finance Minister.

Mr. Chan graduated from Sydney University in Australia, with a Bachelor of Economics degree, and has extensive commercial experience.

Sir Allan said he believes that Mr. Chan, as new minister, can work towards strengthening the Ministry of Finance.

This will include looking at appointing foreign expert advisers to focus on improving the country's production and exports sectors.

Mr. Maina confirmed to SIBC News that he has received his letter of dismissal.

Since the 2000 coup, aid donors have withheld substantial amounts of funding. They said they need proof that the Solomon Islands is addressing law and order problems after two years of ethnic conflict and has reestablished credible financial management.

Last Tuesday, Mr. Maina brought forth a budget that devalued the currency and cut the public sector payroll. He also announced plans to restructure and reinvigorate financial institutions.

The Central Bank of Solomon Islands threw its full support behind the devaluation.

It reiterated Mr. Maina's warning, saying that without this corrective measure the country would run out of foreign reserves soon.

A statement from the bank said the minister's decision on the exchange rate was inevitable and commended the government for taking such tough action.

It said the current economic situation is a direct consequence of postponing such difficult but necessary decisions in the past.

The bank said the public may experience increases in the prices of certain goods and services.

It said this is part of the sacrifice that all Solomon Islanders have to make now, so that the economy is restored and the country's future well being guaranteed.

But the announcement took even some senior members of the government side by surprise.

The Deputy Prime Minister and Leader of the Independent Group within the coalition government, Snyder Rini, walked out of Parliament to show his disagreement.

Mr. Rini said the Minister of Finance has powers to devalue the dollar but because it was a major policy change he should have consulted with the Cabinet first.

SIBC understands that both the Cabinet and Government Caucus quickly began putting pressure on Mr. Maina to withdraw the devaluation, which has not occurred.

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: 

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