Solomon Islands Threshold Program - Constraints Analysis

MCC’s evidence-based approach to its investments begins with a mutual understanding of a country’s main growth challenges. During the first phase of the compact or threshold program development process, MCC and the selected partner country, jointly conduct a constraints-to-growth analysis (CA). This analysis identifies the constraints to private investment and entrepreneurship that are most binding to economic growth in the country. The results of this analysis enable the country, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.

The Constraints Analysis Report for the Solomon Islands Threshold Program highlights the following binding constraints to economic growth:

1. Inability to access land: Land is inaccessible for investment in long-term, sustainable economic activities in most parts of the country. This is due to an inability to clarify rights holders and establish enforceable agreements. This issue is particularly problematic for the development of the tourism industry.
2. Inadequate natural resource management: Inadequate oversight of logging and mining sectors has led to significant losses in government revenue, environmental damage, and insufficient benefits to communities. The country’s primary tourism asset, coral reefs, are also poorly protected and at risk of further degradation.