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MCC-Pacific Islands Partnerships Lead to Growth and Prosperity

September 30, 2022

By Nancy Kim, Pathways Intern, Congressional and Public Affairs and Emily Schultz, Policy Officer, Solomon Islands Threshold Program

Landing at the airport in Honiara, the MCC team was captured by the excitement of fellow travelers returning to their families after several years, the sights of beautiful coastlines, and the remarkable performance by the ‘Are′ are people welcoming them to Solomon Islands. After the COVID-19 pandemic required only virtual communication for the first two-plus years of program development, MCC staff were travelling to support the mobilization of the $20 million MCC Solomon Islands Threshold Program.

Solomon Islands is part of the Pacific Islands region – a network made up of hundreds of islands scattered across the Pacific Ocean. Home to dynamic cultures and rich natural resources and biodiversity, the Pacific Islands possess unique economic and trade opportunities in fishing and tourism; however, countries of small size and populations are extremely vulnerable, with trade barriers worsened by remote locations. This means that unexpected shocks like natural disasters and the COVID-19 pandemic can cause crippling effects that stunt economic growth.

Since the agency’s inception, MCC has worked in the region to promote inclusive and sustainable economic development. For every grant-financed program we work closely with the partner government to develop a program that directly addresses the country’s own challenges to economic growth. Road infrastructure improvements funded by the completed $66 million MCC – Vanuatu Compact reduced transportation costs for poor, rural farmers and providers of tourist-related goods and services. When the compact ended in 2011, it was expected that approximately 15,000 Vanuatuans would benefit over the next 20 years.

Protecting Solomon Islands’ forests and diversifying its economy

The benefits of the Ring Road in Vanuatu are clear and word has spread across the Pacific Islands about not only the longevity and impact of the infrastructure, but also MCC’s strong commitment to country ownership. Following this success, MCC was excited about the new opportunity to work with the Government of Solomon Islands.

The Solomon Islands relies heavily on its logging industry. In fact, logging acts as the backbone of the economy, funding 20 percent of the government’s tax revenues. However, decades of over-harvesting have led to increasing concerns about the sustainability of current logging practices and the resulting environmental harm.

To tackle this problem, the MCC – Solomon Islands Threshold program aims to support the Government’s efforts to put in place the policies and institutions to manage its natural resources more sustainably. The goal is to uplift local communities through increased revenues, while also protecting the Solomon Islands’ lush forests. The Payment for Ecosystem Services component aims to generate environmental, economic, and social benefits through accreditation and eventual carbon credit payments for participating communities.

To ensure long-term economic growth, a diversified economy provides stability for all – like the opportunity to bolster Solomon Islands’ tourism sector. Solomon Islands has beautiful beaches, excellent scuba diving, and a unique presence of World War II memorials and relics, making it an exciting and off-the-beaten-path travel destination. Tourism creates new jobs, stimulates local businesses, and incentivizes infrastructure improvements. Women especially stand to benefit from increased tourism. With that in mind, MCC is partnering with the International Finance Corporation (IFC) to identify land suitable for tourism investments and to better respond to investor needs. Robust community engagement will ensure that MCC, the Government of Solomon Islands, and residents of local communities work together to develop plans that are responsive to local voices.

MCC’s future in the Pacific Islands

In 2020, the Republic of Kiribati was selected by MCC’s Board of Directors to be eligible for a threshold program. As part of the program development process, MCC is working closely with the Government of Kiribati to identify the nation’s most pressing challenges.

To further strengthen MCC’s relationships in the region, MCC has recently held bilateral meetings with Solomon Islands and i-Kiribati officials, and CEO Alice Albright participated in the Pacific Islands Leadership Summit hosted by the White House, highlighting MCC’s work in the region at an event about people-centered development.

MCC’s past accomplishments and present progress with nations in the Pacific Islands holds exciting promise for the future. The time we spent in ‘the Hapi Isles’ in July – speaking directly to Solomon Islanders and immersing ourselves in the culture – reflects the special importance of in-person experiences. And as travel restrictions continue to relax, MCC looks forward to strengthening its current partnerships, as well as developing new relationships along the way.