decline in catch. it is anticipated that catch will rebound in coming months as two new fishing boats come into operation. fisheries is a sector in which the bank expects future growth with investment into the sector remaining strong. cocoa production has been one success story in 2009. due mainly to adverse weather conditions, cocoa production in 2008 was poor. earnings in the industry were however sustained due to resilient international prices. production levels for the second quarter have been very promising. it is hoped that a combination of good harvests and a fair international price will enable the cocoa industry to contribute more to the solomon islands'economy in 2009. cocoa forms an important source of income in many rural areas. the continued growth of the palm oil industry in the country has also been a major positive in the last few years. 2008 saw a 28 % increase in output in palm oil and further gains have already been witnessed in 2009. expansion in the size and yield of plantations, increases in mill processing and improvements in worker productivity are combining to drive forward the palm oil sector. it is anticipated that falls in the price of palm oil experienced over the last few quarters will be only temporary as international demand for palm oil and palm oil products remains strong. this dip in prices also does not seem to have dampened the industries plans for expansion. issues of security and land tenure however, remain as serious and continued risks to development of the industry. these issues must be confronted if this sector is to grow and increase revenues and employment in solomon islands. tourism has been identified by the government as a key potential growth area. this sector has seen a 16 % year - on - year growth in the second quarter of 2009. this is a very positive sign for the economy. one major contributor to this growth has been the recent entry of a low cost carrier to the brisbane / honiara route. this has increased competition and dramatically lowered fares for travelers. the upgrading of hotel facilities around honiara and the opening of a new hotel on honiara's waterfront may also boost tourism in the county. limited infrastructure and problems with domestic air and sea travel, remains the major barrier to developing the tourism industry across the country. the government has made steady progress in opening up the telecommunications sector. this is expected to provide a boost to the economy. the granting of a second mobile license could see new investment into the solomon islands economy. the experience of many countries is that the entrepreneurial use of mobile technology can reap huge rewards particularly in rural areas.

denton rarawa : the current state of the solomon islands'economy and thoughts on the future paper presented by mr denton rarawa, governor of the central bank of solomon islands, to the university south pacific development dialogue in solomon islands, honiara, 17 september 2009. * * * distinguished usp personnel invited guests ladies and gentlemen good morning to you all introduction first let me thank the usp faculty of business & economics for inviting the central bank to participate in this important gathering this morning. it is a privilege to be part of this dialogue. this morning i hope to provide a brief update of the current economic situation in solomon islands and to share with you a few thoughts on the direction in which i think we are heading as well as some challenges that need serious consideration by policy and decision makers. some of these policy challenges are potential areas that institutions like usp can assist the country in by employing its academic research expertise. i believe this is one key goal of the development dialogue this morning. i will begin by looking at the current condition of the productive sectors of the economy including some of the future challenges and opportunities these sectors are facing. then i will move to areas for which the central bank is directly responsible ; the monetary and financial sectors of the economy. i will also describe the actions that the bank has taken to influence events and discuss policies we may implement in the future. i will conclude with some thoughts and advice for the future. global economic crisis you are all aware that in the last eighteen months the global economy went through a severe financial and economic crisis that spared no country. earlier this year when launching the central banks'2008 annual report, i described the solomon islands economy then as a small boat in the middle of a severe storm. at that time, no one knew how strong the storm would be or how long it would last. but one thing was certain : the country has to survive the storm otherwise our boat mv solomon islands will sink. today there is growing evidence that the storm is abating. signs of recovery are emerging around the world. just yesterday, the chairman of the federal reserve ben bernanke claimed that " the recession in the united states was over ". despite these positive signs however, dominique strauss - kahn ( the managing director of the international monetary fund ) issued a stark warning only last week " that the global economic crisis isn't over yet ". other prominent commentators have suggested that growth will be " slow and uneven " and " unemployment will remain a problem