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Date Posted: 19:37:56 07/10/03 Thu
Author: Anonymous
Subject: Cont
In reply to: 's message, "More on SG" on 19:27:17 07/10/03 Thu

Section Summaries of The Constitutional Reform Project
For the Solomon Islands - UNDP (SOI/02/003)

Summary of points regarding the concept of and approach to 'state'

The Solomon Islands has long been a decentralised country, the basic units of administration being small traditional groupings. The current move towards decentralisation is intended to counter what is seen to be an unworkable unitary system of government introduced at Independence.
There are strong feelings among the public that both national and provincial governments have failed them.

The conflict and the profound changes in the country's circumstances since 1999 have given added urgency to the move towards a stronger form of sub-national government.
Under the proposals for change provinces are to be renamed 'states', though there is no difference in the meaning of these two terms.

'State' government could be introduced through new legislation but, instead, Parliament has chosen to introduce a new constitution as a basis for this.

The political debate on what a new constitution should embrace is not closed. Some ask whether the proposed office of 'state governor' is really necessary, fearing it would impose an excessive cost burden on small 'states' and that it might prove to be simply a comfortable refuge for retired politicians.

Different provinces differ in their interest in the functions that might be devolved to them - and their capacity to assume those functions varies and is limited.

Provinces range in population from a little over 2,000 (Rennell-Bellona) to more than 120,000 (Malaita). Irrespective of population size and resources it is intended that all should become 'states'.

Summary of points arising through lessons learned from elsewhere

As in the Solomon Islands, in other countries the expectation has been that decentralisation would improve delivery of services and local level participation in decision-making, but the results have been disappointing.

Papua New Guinea's approach to decentralisation has influenced thinking in the Solomon Islands. However, the system of sub-national government in that country is not working effectively.

The Federated States of Micronesia model of island-state federation attracts some, but it has been developed in circumstances that are quite different from those of the Solomon Islands and not least in having a strong alliance with a generous 'backer' , the USA.

Indonesia rushed decentralisation and this caused confusion and opened up new opportunities for the spread of corruption.
กค Problems in the implementation of decentralisation included inadequate capacity at sub-national level to handle additional powers effectively; scarcity of both national and sub-national financial resources; inexperienced sub-national political organisations; and poor or non-existent accountability.

Decentralisation cannot just be 'handed over'. It has a chance of being effective only if it is treated as a process, over time, with careful planning, preparation and training prior to implementation of a decentralisation programme.

Careful prior evaluation is needed of the problems decentralisation is expected to rectify.

Transparency and accountability are crucial to success.

Care is needed to avoid unrealistic concessions to emotional or impractical demands that seem important at the time the system is being decided;

Mechanisms to deal with any problems or grievances that may arise during the implementation phase are important.
Summary of issues arising in respect of further decentralisation

A summary of a wide range of issues raised during interviews conducted by the Study Team is presented in Table 1 of the report.

Control of internal migration and settlement is seen in most provinces as a key requirement for a secure future and there is widespread support for provinces or 'states' to be given power in this area. However, this is a contentious issue with a potential to infringe on human rights. Existing legal provisions to control the movement of 'troublemakers' who have given rise to this issue could be but are not being used.

Recent calls for controls over internal movement are also a reaction to wider problems, such as uneven development, the lack of employment opportunities for many young people at home, and the reluctance of police to deal with troublemakers.

Difficulties will be encountered in efforts to control internal movement because there is a long-established pattern of mobility of Solomon Islanders, there have been many inter-island marriages and there are many inter-island children.

Measures to control movement could worsen national fragmentation and disunity.

Any human rights infringements would adversely affect Solomon' international relationships.

There is considerable variation in the quality and quantity of the natural resources available for subsistence and for development. The role of a national government is to ensure that people in resource-poor areas are assisted, through the generosity of the resource-rich, through funds distributed by the central government.

A transparent and fair sharing of resources is a pre-condition to the co-operation of the resource-rich provinces as a nation. However, they feel that a disproportionate amount of the profits generated from their natural resources has been spent on building up the capital, Honiara - that it is not helping their neighbours, and that they themselves are not getting a fair share of the proceeds of development.

Unevenness of resource distribution places pressure on people to move to areas where resources are adequate. The inflow of people to Guadalcanal is well known. There have been other inter-island shifts of population and, in the climate that has developed from the Guadalcanal-Malaita conflict over resource-sharing each of these settlements is potentially an issue.

Concern for personal and provincial security is a primary factor driving the current momentum for 'state' government.

Some provinces seek to define 'state' citizens and to make a distinction between 'indigenous ' citizens of a 'state' and other Solomon Islanders.

Decentralisation has been discussed only in provincial or 'state' terms - the relationship between the central government and the first sub-national level of government. The nature of, and mechanisms for, government and governance below the level of Province or 'state' have not been considered.

Below the province/'state' level, governance becomes more difficult in that this is where the new quasi-democratic institutions meet, and may clash with, the traditional.

Embracing traditional leadership in government has long been on Solomon Islands' agenda. However, it is not easy to fit 'tradition' with formal government. Traditional leadership varies greatly between culture groups, the status of traditional leaders has been weakened because much of their former power and influence has been assumed by formal government and by the Churches.

It is unusual for a woman to be recognised as a traditional leader, despite the fact that women influence male leaders' decisions, and that over half of all Solomon Islanders inherit their land rights through women.

Women's lack of political knowledge and understanding diminishes their capacity for meaningful engagement in governance.

There is a need to identify and implement mechanisms to ensure greater representation and participation of women at all levels of government was stressed.

Given the central role women play in food security, agriculture development and subsistence, it is important that provinces or 'states' improve their commitment to extension support services for women.

A key governance issue in Solomon Islands today is a role for youth in planning and decision-making processes. Traditionally, young people were to be 'seen but not heard'. Yet they are now struggling to cope with conflicting and often competing traditional and modern views.

Young people feel they are being pushed aside by a lack of education opportunities and employment options and that they are 'forgotten' by community leaders and by government. Young women often have the lowest status in their society.

Expanding opportunities for partnership at local and 'state' level and strengthening the capacity for youth to be involved will be fundamental to good governance and effective devolution.
Summary of decentralisation issues for selected sectors

There is a strong view that provinces/'states' must act to ensure basic education is more firmly 'anchored' in community life, and with greater parent participation.

The Ministry of Health is concerned about a lack of community 'ownership' of health services and the people's reluctance to accept responsibility for their own health.

There is unclear or inconsistent understanding of the process or implications of further decentralisation of the health care system.

All consulted on health issues believe in the importance of a national Ministry of Health to set and maintain standards, policies and protocols and to co-ordinate health care delivery.

Most stressed an immediate need to focus on strengthening the existing rural health care arrangements to prevent any further regression in health status.

A comprehensive review of current provincial health services as the basis for developing a Rural Health Services Framework is to be undertaken and this will be very useful for determining what functions might be devolved and how this might be done.

As with many other aspects of government, policing is 'in crisis'. The Royal Solomon Islands Police Force has lost public confidence - and has yet to resume its capacity for enforcement.

Security fears drive a Western Province call for a state-based police force In some other provinces, however, it is felt that a multi-ethnic mix of police officers is needed - to ensure local officers are restrained from allowing perceived customary 'obligations' to interfere with their duties.

Differing policing standards and practices between 'states' would be confusing and the focus of 'state' police might be on issues of local significance that might compromise co-operation between 'states' and the pursuit of law matters of national significance.

There is a possibility that a parochial police force could more easily be misused by political leaders to force the compliance of rural communities in matters such as use of customary land.

Some feel that security and law and order, and the prevention of any further deterioration in inter-island relations is best addressed through urgent reform of the national Police force and that only when this has been achieved would it be appropriate to develop appropriate provincial policing measures.
กค Stress is placed on the importance of ensuring that decentralisation reinforces national unity through the provision of consistent judiciary services throughout the country that are equitably distributed - but the existing system needs first to be strengthened and improved.

Provinces have long been frustrated by abuse of the land allocation powers of the Commissioner of Lands but some provincial administrations, too, have been guilty of having overriden policy and procedures in this respect.

All Provinces seek to have authority under proposed 'state' government for the administration of land. Basically, it appears that it is decision-making authority that is sought, rather than technically sophisticated and costly support functions such as mapping.

Lands administration is the one area in which a central government Ministry is developing a devolved model that could be matched to a new form of decentralisation. Its 'anticipatory' approach to decentralisation might have application to other sectors.
Summary of some perceived impacts on lives and livelihoods

In general it is true that people's lives and livelihoods could improve through 'state' government from 'local' people making 'local' decisions that are 'better' for 'local' people - provided that 'state' politicians and administrators are competent, honest, and transparent in their dealings.

The impact of decentralisation in other countries has often not been to the advantage of poorer members of society, one reason being that decentralisation increases the potential for local elite 'capture' of its benefits.

For a 'state' government system to operate effectively, it will need to be negotiated as a mutually beneficial arrangement of governance, with cost-effectiveness a priority criterion.
Both 'state' and central governments will be struggling to survive financially unless they institute measures to control 'compensation' payouts, and to prevent and penalise extortion and corruption.

Education and health sector stakeholders emphasise a need for decentralisation to be integrated with reform plans designed to strengthen 'state' management capacity and increase community involvement in planning and implementation.

Many people offered the opinion that the immediate priority should be to reinstate educational and health services to pre-crisis levels before proceeding with further devolution.

Concern has been expressed that 'state' government could increase disparities in living standards between resource-rich and resource-poor provinces and result in 'pockets of poverty'.

The pressure for 'states' to generate revenue could increase tension and conflict between government and landowners and between land owning groups themselves. It could also result in an increase in the unsustainable use of resources, and this would bring social and economic hardship.

Some stakeholders are worried that 'state' government could weaken social cohesion within and between provinces and reduce the potential for national unity. Also, tensions could turn inward and 'social capital' within a 'state' could erode.

The proposal to involve traditional leaders in government could be a positive step towards strengthening social capital but only if those chosen are truly representative of, and effectively linked with, the people they are expected to represent.

Informal networks and relationships and the unrecognised 'village governments' and 'clan-based resource management agencies' have maintained food security, cared for the aged and kept the vast majority of the country's population in reasonably good health despite the very limited achievements of governments in rural development. There is a strong implication that to be successful, 'state' government needs to build on these arrangements - but to take care not to overwhelm them.

Inadequate financial and management capacity at 'state' level is likely to undermine the effectiveness of services if capacity is not strengthened before functions are transferred.

While there has been considerable debate about decentralisation to province/'state' level, there has been very little discussion of province/'state' linkages with local organisations or communities.

'State' governments would have opportunities for innovative international trading relationships that could improve returns from Solomon Islands produce. However, care would be needed to avoid adverse impacts on the trade of other provinces, and to ensure important national government policies and macroeconomic stability are not undermined.

There are risks that 'state'-based economic development and trade could worsen regional inequality and this could greatly complicate central government policies to redress economic inequalities, to promote national unity and to facilitate even-handed distribution of the benefits of economic development.

People in business are unenthusiastic about the possibility of 'state' government, believing that it will lead to duplication of regulation and taxation and noting that provincial governments have a poor understanding of the private sector. A sensible 'state' government working cooperatively with central government could overcome these difficulties.
Summary of findings on the costing of 'states'

It is not possible to arrive at a precise costing of a form of 'state' government that has yet to be defined and that is to vary from province to province. The Study Team could access little financial data for this purpose and the uneven quality of this data risked compromising the result. Financial reporting from provinces is irregular and in some cases has lapsed, and some records are reported to have been destroyed. The Auditor-General has been unable to audit national government's 'books' for the past six years.

The bottom line is that 'state' government in Solomon Islands will be as expensive, or as inexpensive, as the available revenue allows.

In theory the costs involved in the transfer of powers and functions to 'states' should be off-set by a proportionate reduction in the costs of central government. However, the proposed state government system would require a lengthy transitional phase during which the functions adopted in each province would vary. Central government would need to retain a considerable number of functions on behalf of some provinces until all provinces were ready (if all provinces were ever to be ready) to assume those functions.

A breakdown of national revenues for 1999 and 2001 shows that the largest amounts were derived from personal taxes, goods tax (manufacture and wholesale taxes) and customs duties - mainly import duties.

For most provinces the amounts they currently receive in grants for recurrent services, health and education, plus the estimated value of public service salaries and wages that are currently paid by national government, exceed what they would receive from a 40 per cent share of the revenue received in 2001 and is close to what they might receive from a 60 per cent share.

If resource-rich provinces were allocated 60 per cent of the revenues generated within their boundaries, and those without significant resources had to rely on a share of the remaining 40 per cent held by the central government (plus its other revenues) the result might not be significantly different from the existing situation.

Depending on how rapidly the economy recovers, how the actual breakdown of revenues is calculated, and what sources are included, the provinces that have been receiving the largest subsidies could be better off - but they could also be worse off.

One of the key factors in determining the efficiency and sustainability of a 'state' government system will be the proportion of revenues that is allocated to its political structure. Under the present system, the political and administrative expenses of provincial governments totals just under $16 million. Of this, the largest three provinces, with 60 per cent of the population between them, spent 48 per cent of the total political and administrative costs. In all but three provinces political expenditure was higher than expenditure on administration.

Provinces are likely to need a significant increase in revenue simply to bring their 'basic needs' services up to a simple but reasonable standard.

Health status indices suggest that the provinces that are receiving the higher allocations happen to be those with better health statistics. Provinces that appear to be more in need are receiving the lowest allocations.

Unquantifiable costs, which include the heavy cost of corruption, 'cronyism', mismanagement and simple inefficiency could represent a greater handicap to the integrity and effectiveness of a 'state' system of government than any other factor. On the other hand, a state government system which could bring about a significant reduction of these costs could conceivably have the effect of dramatically improving the national economy to the extent that the revenue base would rise to levels which would adequately cover the costs of a 'state' government system.
Summary of proposals for revenue sharing

The degree of decentralisation of financial affairs is a critical element of the political contract that holds a country together. Yet the present structure of financial grants from national to sub-national levels has developed without a transparent monitoring and review process or any strong accountability to Parliament and the public.

Basic State Government Task Force Report concepts for revenue sharing have been used in the Study to develop a proposal for a system of revenue sharing that combines public accountability with flexibility to adapt to changing circumstances.

The proposed system could be introduced through legislation without waiting for constitutional amendments. It would be supervised and directed by a National Council on Intergovernmental Finance (NCIF) comprised of the Minister of Finance of the national government as chairman and the political heads of sub-national governments (now, provincial premiers) as members.

Revenue sharing would be in two stages: primary sharing between the national governments and all sub-national governments together, and secondary sharing among sub-national ('state') governments.

The task of NCIF in the primary stage of the revenue sharing exercise would be to determine the allocation between national and sub-national levels of government of the revenues expected to be available for the purposes of government in the following fiscal year and the two years thereafter. It would need to take into account the existing and expected financial and economic circumstances of Solomon Islands, in such a way that the functions of government allocated to each level could be performed as well as resources permit.

Increasingly vocal concerns about revenue-sharing have arisen partly from dissatisfaction with lack of transparency and accountability, partly from a sense of grievance that the current system does not sufficiently recognise the differences in 'economic contribution' among provinces and partly from the repeated failure of the national government to make timely and complete payment of whatever grants have been agreed and budgeted.

There are dangers in pressing for a state funding mechanism based on retention of export duties. as these are expected to diminish as commercial stands of timber quickly disappear and the much reduced tuna industry continues to struggle with very low market prices.

Most import duties are set to fall to low levels in the next 5-10 years as regional and global free trade sets in.

Restoring the integrity of revenue at national level is already a major challenge. This task could be made more difficult by decentralising the main revenue responsibilities to sub-national level, where supervision is much more difficult.
Summary of public awareness and understanding of the decentralisation process

'State' government is being seen as a product rather than as a process of governance reform leading to a product. It is also seen as an automatic solution to long-standing and sensitive issues such as equitable sharing of government revenue and controls on internal migration

Widespread dissatisfaction with current political leadership and with management of the nation's finances and resources has caused people to focus on a hope that by changing the system of government the problems of leadership and management will in this way be solved.

Many question the country's readiness and capacity to embark on a major change process at this time of instability. Yet others believe that 'state government' is a prerequisite for peace and prosperity and see it as 'a matter of survival.'

There is considerable misinformation about the purpose, process and implications of 'state government' and this has distorted public perception of what is envisaged.

Lack of 'political literacy' seriously limits the possibilities for civic engagement in the governance reform process. People are saying they have been 'left out' and are asking for more information.

The debate on 'state government' has become caught up in the peace process and coloured by concerns regarding provincial security. This has produced an emotionally charged climate that hinders discussion of what is needed in a 'state' system to encourage and support national unity.

Expectations of 'state' government are high, based on its perceived benefits. The risks appear not to have been considered.

Provinces differ in their views about the relative advantages and disadvantages of decentralising essential services such as health, education and policing. Planners and policy-makers in these critical sectors have not analysed decentralisation options or impacts.

A national civic education and awareness campaign was launched in December 2002 as part of the Constitutional Reform Project with the objective of improving public understanding and to prepare them for involvement in the governance reform process. A public consultation process in February 2003 is to build on this improved awareness by providing citizens with the opportunity to identify, reflect on, and discuss key governance issues.

A low level of literacy makes assimilation of information difficult, though literacy in itself is not enough as it is necessary to be able to comprehend the information and understand its' implications at local level.

Mass media in the Solomon Islands is restricted to the radio and a national newspaper and has low penetration in rural areas. Most information is disseminated through word-of-mouth and face-to-face meetings

Communication between local people and government is extremely limited and 'bottom-up' communication is not nurtured.

The low level of social integration and trust between groups from different parts of the country means there is little 'horizontal' communication. This problem has worsened since the crisis, resulting in distorted information that has increased inter-provincial tensions.

Decentralisation offers an opportunity to improve the two-way flow of information and so strengthen communication between people and their government and foster nation building, but this will not automatically happen unless 'state' governments act to make it possible.

The degree of social cohesion or unity in a society is called 'social capital'. It refers to the customs, values and networks that enable people to work together to achieve common goals. Good governance is found where social capital is strong. In the Solomon Islands there is strong social capital between individuals, families, and clans, and within language groups, but much weaker social capital between language groups and regions.

Concern has been expressed that 'state' government might weaken the already limited social capital between provinces and intensify existing differences between regions. Strengthening 'State' identity could work against national unity if a 'look after ourselves only' attitude were to develop. There is also a worry that this might lead to an internal focus on ethnic differences that could lead to disunity within provinces.

The potential for voluntary and collective action by citizens and 'civil society' organisations has been largely ignored, and even resented by national and provincial governments.
Summary of prospects for 'states'

While central government continues to struggle to regain control of public finances and the national economy flounders any new 'states' will find it very difficult to survive, let alone progress.

The report of the 1999 Census included a series of projections based on population growth and economic recovery. A 'medium' level rate of growth would mean a population of over 460,000 in 2005, reaching just under 550,000 in 2010. Two scenarios were presented: a 'stagnation' scenario, with continuing political instability and a slow or negligible return of foreign investment, and a 'revival' scenario, in which the political conflict is resolved, foreign investors return, and steps are taken to revive the economy. There are, as yet, no signs of a revival scenario developing. The Census Report suggests the possibility that the 'stagnation' situation could continue until 2014.

Even the 'revival' scenario is overshadowed by the fact that government mismanagement, failure to collect revenues and a general decline in public service standards has resulted in high national debt, relatively high rates of inflation and a general decline in development indicators that is stifling investment.

The current Public Service is one that has evolved to suit local circumstances and the needs of those with influence. It may be time to rethink what arrangement would best suit local circumstances so that the public at large might benefit from its 'Service'.

Prospects for the success of a 'state' would be much reduced if it were to inherit a public service that retained its current level of inefficiency and exposure to political interference.

If the 'state' governments are unable even to maintain the current debilitated services in the immediate future it could be that the public would react against those governments in a way that could undermine them and lead to a call for a return to strong central control.

Weaknesses in the Parliament and in the Constitution under which it operates compromise its capacity to properly support and monitor a 'state' government system.

Some constitutional provisions are nobly expressed in terms of Westminster traditions but do not make allowance for the way in which Melanesian political systems operate - so as to build on their strengths and contain their weaknesses.

Some hope is seen in the emergence of non-government initiatives such as small-scale enterprises and community-based service providers, and some communities are mobilising resources, reviving and modernising traditional governance systems and strengthening their links with each other and to overseas commercial and NGO contacts.

One idea to be considered for a future Public Service is one with four main branches: Education, Health, Police, and an Administrative, Legal and Technical Service (ALTS), each with its own governance arrangements. The combined cost of an ALTS and contracted-out activities would be unlikely to be lower than the present arrangements, but it should be far more effective in achieving re-thought goals at national/federal and provincial/'state' levels.

Some believe that if the governance reform process is 'too slow', political and civic unrest could intensify. Others are of the view that if decentralisation is 'too fast' and proceeds without sufficient consultation and planning, existing problems will worsen. While Solomon Islanders generally advocate a methodical, sequential approach to decentralisation, people's strong desire for fundamental change in governance and the heightened emotions associated with the conflict are hastening the pace of the reform process.

A systematic method of assessing a province's 'readiness' to assume additional functions is needed - and provision for subsequent objective evaluation of a province's effectiveness in managing new functions during a phasing-in period.

Henry H. Kellam III
Project Coordinator,
Constitutional Reform Project (SOL/02/003)
5th Floor Anthony Saru Building
Ph: 677 28865 Mobile 677 78042


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