Solomon Star

HONIARA, Solomon Islands (June 27) - Moves to encourage foreign investment in the country were boosted yesterday with the Foreign Investment Act 2005 coming into effect.

The new act replaces the 1990 Investment Act, often described as cumbersome and discourages foreign investment.

The Foreign Investment Act 2005 brought sweeping changes, designed to break down the barriers to foreign investment, which had restricted economic activity in the nation.

Among other issues, the new Act proposes to speed up the application process within five days, compared to three months under the previous act.

It also proposes to facilitate foreign investment applications in a transparent and accountable manner.

In a nutshell, the Act introduces a simple, transparent, non-discretionary and no-discriminatory system of registration for foreign investors.

It attempts to reduce uncertainty and increase the level of investor interest in Solomon Islands.

The Foreign Investment Act is a milestone for the country.

And it will, no doubt, boost Solomon Islands’ ability to attract foreign investment.

Foreign investment is a vital ingredient for economic growth.

Solomon Islands is said to have been missing out on its share of lucrative foreign investment because of lengthy delays in processing applications caused by an outdated Act.

The Government hopes this new Act will encourage more foreign investment and create new jobs for Solomon Islanders.

However, the Act alone would not provide an attractive investment environment investors need.

Law and order, political stability and people’s willingness to allow their land for development, are also important considerations.

For no foreign investor would invest its money in a lawless or politically unstable country.

Land disputes, too, remained a major obstacle to development in this country.

Unless landowners are prepared to lease their land on long-term basis for development, business activities would not take place.

The Foreign Investment Act 2005 encourages foreign investment.

But unless issues of law and order, political instability and land disputes are properly addressed, foreign investors would still be reluctant to invest here.

In all our genuine efforts to encourage foreign investment in Solomon Islands, all these issues need to be addressed holistically.

Only then can we leave no cloud of doubt in the mind of foreign investors to invest here.

June 28, 2006

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