A Paradigm Shift: Political Outlook on Digital Transformation and Internet Development Challenges in the Solomon Islands – Songo Nore

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*This article is originally published in the Asia Pacific Policy Observatory December 2024 Report.

Overview

Solomon Islands is a small island developing state in the South Pacific region. It is a Melanesian nation-state as it is part of the Melanesian Spearhead Group (MSG), a regional entity comprising Papua New Guinea (PNG), Fiji, and Vanuatu. Solomon Islands has a total area of about 28,896 square kilometers with Honiara being its capital. Solomon Islands is a former British protectorate. The governing structure in the Solomon Islands consists of three levels: (1) the national government; (2) the provincial government; and (3) the local government. Honiara City Council is currently the only local government body in the Solomon Islands, and was established under the separate Honiara City Act 1999 (the ‘HCA’).

The political turn of events in 2024 General Elections in Solomon Islands has been monitored unscrupulously by neighboring regional powers as the island nation in the South Pacific has become an epicenter of regional geopolitical tension between China on one hand, and Australia and the United States on the other. 

Until May 2024, the style of leadership displayed by then Prime Minister Manasseh Sogavare has challenged the traditional regional status quo in the sense that countries in the South Pacific often capitulate to Western influence easily due to their colonial historical ties. Nonetheless, that has changed a lot under Sogavare as a new emerging trend of leadership to challenge regional political and socio-cultural status quo, divorcing the inferiority complex to ascend into a more equal playing field in the international arena. The guiding principle of sovereignty which underpins nation-states’ behavior tend to make more sense when a small island developing state in the South Pacific region defies a global superpower in that Sogavare refused to participate in Biden’s Pacific Summit.

From Sogavare to Manele – The Outcomes

According to Development Policy Centre Fellow Terence Wood, voting preferences were determined by material circumstances of the voters neither anti-China sentiment nor Hegarty’s hypothesis––the more candidates there are in an electorate, the less likely the incumbent is to win. (This hypothesis was postulated by Hegarty from his political analysis stemming from election research in PNG.) While such a proposition could hold some truth, speaking from personal observation as a PNG native, PNG’s political outcomes from general elections are very unpredictable. Therefore, the same could be true for the Solomon Islands, too.

However, Wood insisted that the material circumstances of a particular candidate in the Solomon Islands could be the common denominator triggering election victory in the 2024 General Elections. He tied that reasoning to depleting Constituency Development Funds (CDF), the largely government-funded pots of money members of the parliament (MPs) can spend as they please, resulting in economic hardship for their supporters as their financial capacity to assist them is hindered thus leading to loss of elections. This could be seen as a key contributing factor of candidates’ failed attempt to be re-elected in the latest election.

As a result, while OUR Party secured 15 seats, 18 of the Party’s incumbent parliamentarians lost their seats, with no new party members getting elected. Subsequently, former Prime Minister Manasseh Sogavare announced to step down as OUR party leader and backed Jeremiah Manele as the newly elected members of National Parliament negotiate and elect the next prime minister. In the end, Manele, who attended the 2024 U.S.-Pacific Summit as Foreign Minister following Sogavare’s refusal to join, won the Prime Ministerial election held on May 2, 2024.

Political Implications on Bilateral Ties

The continuity of OUR Party leadership in Solomon Islands politics implies a pro-China foreign relations outlook albeit Sogavare has relinquished party leadership to Manele. It is quite obvious that the change of leadership in the Solomon Islands politics with the election of Jeremiah Manele as PM will not alter the status quo of cordial foreign relations with China that was carefully crafted and nurtured under his predecessor. The Guardian reported that Jeremiah Manele as the Island’s new Prime Minister had pledged to continue its policy of embracing China.

On the other hand, Australia’s Prime Minister Anthony Albanese said he looked forward to working closely with Manele while the U.S. State Department congratulated Manele for his election in the leadership vote and the people of Solomon Islands for making their voices heard. Despite Solomon Islands’ indication to strengthen and deepen its diplomatic ties with China, the United States and Australia are willing to collaborate with the Solomon Islands under the new leadership of PM Manele. Geopolitical dynamics of regional powers highlighting security concerns continue unabated in light of the Solomon Islands having shifted its allegiance from Taiwan to China in 2019.

Solomon Islands’ Digital Development, Debt and Diplomacy

The curiosity to elucidate the impetus behind the Solomon Islands’ insistence on maintaining the status quo of a cordial bilateral relationship with China is quite intriguing. One of the factors which this essay will examine is China’s so-called “debt-trap diplomacy” focusing on investment within the telecommunications sector of the Solomon Islands. It is truly fascinating to discover how Chinese entanglement in the Solomon Islands domestic affairs has determined political outcomes, too.

Just recently, the first communication tower built by China for the Solomon Islands National Broadband Infrastructure project was commissioned, linking Sali village of Guadalcanal to the communication network. When completed, the project will also cover remote regions of Malaita, providing access for residents in remote regions to network services, e-education, e-commerce, and e-health with affordable costs. This important Chinese investment in telecommunications infrastructure came right after a dexterous political maneuvering that culminated in the removal of Daniel Suidani, an anti-Chinese strongman and former Premier of Malaita Province. 

Suidani’s removal came through a vote of no confidence as his seat was declared vacant by the speaker of provincial assembly acting upon directions from the cabinet minister responsible for overseeing provincial governments due to his anti-stance against One-China Policy adopted by the former regime of Sogavare.

Suidani is known for his outright rejection of Chinese development aid in Malaita Province. As indicated by Wood, the province was supposedly the home of the most fierce anti-Chinese opposition in Solomon Islands which is led by its firebrand anti-China governor Daniel Suidani who refused Chinese aid projects. Furthermore, it is alleged that the Malaitan protesters are said to have sparked the anti-Sogavare riots in 2021.     

On the contrary, Australia has also invested heavily in the information and communications technology (ICT) sector through its Coral Sea Cable System. This submarine ICT infrastructure development is a trilateral investment project which involves the Solomon Islands, Papua New Guinea, and Australia. Both countries are connected to submarine fiber optic Internet cable systems linking them into the Sydney Global Internet Hub. On a related note, Telstra purchased Fiji-based Digicel Pacific in July 2022 at the cost of US$1.33 billion with Australian government financing amid fears that China’s government could use the network—which operates in six Pacific countries—to carry out spying in the increasingly contested region. 

These strategic investments from the East and the West underpinned the convoluted geo-economic situations across the Indo-Pacific region.

Solomon Islands’ Balancing Acts In Focus

The Solomon Islands has come into the international spotlight due to Chinese entanglement in its domestic affairs. Sogavare’s reign has set a precedent that is likely to be emulated by neighboring Melanesian states as his successor, Jeremiah Manele, has shown unwavering commitment to cement Sino-Solomon Islands bilateral relations. 

The West tends to be reactive in their development approach and is not proactive enough. In this sense, the US is only provoked by Chinese intrusion into the Pacific Islands Countries. For instance, the 2020 United States Strategy to Prevent Conflict and Promote Stability, under Section 1: Strategic Challenge––stipulates that “Fragility can enable authoritarianism, external exploitation, and increase the influence of the United States’ competitors in both physical and digital realms. Weak states are much more susceptible to Russian and Chinese coercion. Through its Belt and Road Initiative, China has saddled many states with unsustainable debt, environmental degradation, increased long-term dependencies, and perpetuated fragility. China concertedly markets and promotes surveillance technology to client states and undermines democratic values of privacy, freedom, and equality”. 

The Internet presents the optimal opportunity for the Solomon Islands to forge its own pathway for growth and development. However, the analysis here has revealed that digital development is more or less taking cues from China. For instance, China has banned Bitcoin. In parallel, Solomon Islands has created ‘Bokolo Cash’, a digital version of its own fiat currency but has banned all cryptocurrencies. Bokolo Cash is a central bank digital currency (CBDC).

To shift the Solomon Islands into digital transformation, the government recently introduced its National Cyber Security Policy in August 2024. This is the first of its kind as cyber security concerns surface in light of digital innovation in the Solomon Islands. Prior to this, Solomon Islands developed its Five Year ICT Strategic Plan 2019 – 2023 as its blueprint for the paradigm shift into the digital era. This plan will be reviewed to craft a new ICT strategy as a way forward in the future. The Solomon Islands Government has also launched its first-ever National E-Commerce Strategy 2022-2027 in May 2023. This e-commerce strategy is compatible with the introduction of central bank digital currency (CBDC) called Bokolo Cash.

Digital Currencies and Alternative Naming System

The official currency of the Solomon Islands is the Solomon Islands Dollar (SBD), also known as Solomon Islands Bokolo Dollar. The term “Bokolo” refers to a traditional emblem depicted on the SBD, which has roots in the local shell currency used historically. While the nation maintains a strong connection to its traditional monetary symbols, its stance on digital currencies is more conflicted. On the one hand, the Central Bank of Solomon Islands (CBSI) has outrightly rejected the usage of cryptocurrencies. CBSI warned the general public that cryptocurrencies are not currencies issued or regulated by the Central Bank as they are very risky and speculative. 

On the other hand, the Sogavare-led regime has introduced a pilot project of Central Bank Digital Currencies (CBDC) in the Solomon Islands. According to the Keynote Address of the Prime Minister issued by CBSI, Sogavare stated that he is honored to address the Solomon Islands on the auspicious occasion of the launch of the Central Bank Digital Currency (CBDC) Proof of Concept Pilot Project, a ground-breaking initiative under the theme, “Leveraging Digital Technology for Inclusive and Sustainable Development: Shared Prosperity.”

That financial technology development was initiated via a partnership with a Japanese FinTech blockchain company and the Government of Japan. CBSI has launched a proof-of-concept for a central bank digital currency (CBDC) called Bokolo Cash, with the support of Japanese FinTech firm Soramitsu and the Japanese government. Bokolo Cash will be worth one Solomon Islands Dollar and project participants can use it in retail settings in the island nation’s capital, Honiara, and for person-to-person transfers whereas wholesale transfers between commercial banks and simulated cross-border payments and remittances will also be tested.

Nonetheless, certain officials from the International Monetary Fund (IMF) have provided counter-arguments whereby they argued that CBSI can proceed with its new CBDC but must be cautious as it comes with many challenges. One of which is an underlying digital infrastructure that is stable, secure, and accessible. Pacific Island Countries and other similar countries are constrained by scale and resources in introducing digital money because the digital infrastructure and institutional frameworks — legal, regulatory, and supervisory — needed for successful digital money implementation tend to be underdeveloped. In addition, many countries in the region can’t afford high development costs, such as those for training, operations, and technology development.

Although the FinTech innovation in the Solomon Islands is in a sense promoting financial inclusion, enhanced business opportunities, and efficiency in cross-border international transactions by removing the need for corresponding banking services for the country, nonetheless, it is at the same time partly contributing to the fragmentation of the Internet as digital currencies utilizes blockchain technology which runs on the Alternative Naming System (ANS), rather than the Domain Name System (DNS). The Internet Corporation for Assigned Names and Numbers (ICANN) which coordinates the global DNS that promotes the slogan “One World, One Internet” is currently faced with a significant hurdle to reconcile ANS with DNS as the former contradicts what the ICANN represents.

The new administration shall continue to navigate these intricacies as crypto matures in collaboration with international parties or engagement with ICANN.

Cultural Barrier to Universal Acceptance and Internationalized Domain Names (IDN)

Linguistic diversity stands as an impediment to universal acceptance. Promotion of a multilingual Internet will be difficult in the Solomon Islands due to its linguistic diversity. The Solomon Islands is a multilingual society that has about 70 or 80 local vernaculars. Like other Melanesian countries with similar linguistic diversity and shared oral history due to lack of a proper writing system, it will be impossible to accommodate Solomon Islands and other Melanesian countries into the Internationalized Domain Name system in the future. This presents a great hurdle for organizations such as the Internet Engineering Task Force (IETF) to achieve.

The ICANN’s Multi-Stakeholder Approach model of promoting an inclusive multilingual Internet hinges on the writing system of a country. E.g. the Alphabets Aa – Zz in English script. Without a proper writing system for the Solomon Islands, it will be almost impossible to assimilate such a linguistically diverse society into the IDN system. There are also more than 60 IDN country code top-level domains (ccTLDs) representing global communities online in native scripts (e.g., .ไทย, .中国, السعودية.).  

With its current foreign policy outlook focusing on deepening its bilateral ties with China, close collaboration with China could present opportunities to harness Chinese expertise in software engineering to develop scripts to accommodate the Solomon Islands into the IDN. However, that future remains largely unpredictable because it depends entirely on the government’s political will to legislate digital laws and formulate Internet governance policies to accommodate such a paradigm shift.    

Recommendations

As the Solomon Islands is looking far ahead into the digital economy, there are certain Internet development obstacles that need to be addressed in order to ensure a smooth transition takes place. Firstly, the underlying Internet infrastructure of the island nation which underpins a robust and vibrant digital economy is still lacking. The Solomon Islands only depend on two state-owned terrestrial ICT firms providing Internet access to the country–– Our Telekom and Bmobile. The local ICT market needs to be opened up for other mobile technology firms like Digicel and Vodafone to enter the market to promote competition and reduce the costs of accessing the Internet. An open economy is ideal for competition which has the benefit of reducing the costs of Internet services while dirigisme can limit accessibility and affordability of the Internet, effectively contributing to fostering digital divide in the Solomon Islands.

Digital literacy training is also of pivotal significance in preparing citizens for digital transformation in the Solomon Islands. On December 12, 2024, I randomly asked a few people on the streets of Honiara in the Solomon Islands about “Bokolo Cash” and the notion of a CBDC while in transit to Papua New Guinea and I was kind of surprised to hear that they are still ignorant. I was only told that CBDC was a government policy initiative during the Sogavare regime but has no effect on society as most people have little knowledge about emerging technologies like blockchain and cryptocurrencies. Therefore, digital literacy training programs should be encouraged and funded by the government in conjunction with international donor agencies to prepare citizens for digital transformations. Such initiatives will impart digital skills and knowledge to participants on how to use their mobile phones to access online services like e-ticket, e-trade, e-learning, cryptocurrency investment, AI, etc.

Last but not the least, investment in cyber security training through collaboration with international donors should also be encouraged in light of increasing cyber security threats in a digital economy. The ‘Post-Quantum Cryptography in the Indo-Pacific Program’ is a good example with the support from the U.S. Department of State, Monash University Australia’s Information Technology Department and the Oceania Cyber Security Center.

Written by Songo Nore (Edited by Dikchya Raut and Vasundhara Majithia)

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