Islands Adrift: Comparing Industrial and Small-Scale Economic Options for Marovo Lagoon Region of the Solomon Islands

Publication - 1 March, 1999
Our report "Islands Adrift" shows that small-scale development options (like reef fishing, beche de mer collection, ecotimber and ecotourism) were worth US$29 million to landowners, compared to US$8 million for industrial logging.

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Executive summary: Economic development in the form of industrial logging and the establishment of oil palm plantations is being proposed for forest lands of the Marovo lagoon area, located in the Western Province of the Solomon Islands. This study compares the economic benefits of these industrial options to small-scale economic options, including use of forest and reef resources to provide food, economic benefits of the small-scale options considerably exceed those of the industrial options. Moreover, they leave landowners in more direct control of their resources, distribute benefits more equitably, and do not expose them to the high risks of fluctuations in international commodity markets.The present value to land owners of industrial options (ie. logging and oil palm) and small-scale options is estimated to be about $SI 41 million ($US 8.2 million) and $SI 145 million ($US 29 million), respectively (1$US equals about 0.2 $SI). The assessment of a greater present value for the small-scale options is based on calculations from data collected through village and household surveys conducted in July 1998. The present value of industrial options was estimated using data obtained from the Solomon Island´s Ministry of Forests, Environment and Conservation, and a Malaysian corporation (Kumpulan Emas Berhad) that is proposing an oil palm plantation.The conclusions are supported by data suggesting that choosing to develop industrial options will diminish the value of some small-scale options and may completely displace others. Reef and baitfish stocks valued at $SI 69 million, for example, are likely to decline as a result of increased sediment and nutrient loadings into the lagoon.Future options, such as the potential return from ecotimber production and tourism, would be jeopardised by the land conversion and timber cutting associated with the industrial options. The estimated value of these enterprises – modestly developed – is about $SI 10 million.Further research into this issue would be welcomed. Various shortcomings in strictly economic analyses make these conclusions tentative. Biases are noted that tend to favour large-scale development options. More robust conclusions | on the economic impact of the various development options will be available when research being conducted now, such as the ICLARM and SI Government Marovo sedimentation impacts studies, is completed, and when environmental and social impact assessments are conducted.

Num. pages: 21