2016 Index of Economic Freedom

Solomon Islands

overall score47.0
world rank161
Rule of Law

Property Rights30.0

Freedom From Corruption25.0

Limited Government

Government Spending25.2

Fiscal Freedom61.4

Regulatory Efficiency

Business Freedom68.5

Labor Freedom66.2

Monetary Freedom75.5

Open Markets

Trade Freedom73.0

Investment Freedom15.0

Financial Freedom30.0

Embed This Data

Create a Comparison Chart

See how Solomon Islands compares to another country using any of the measures in the Index.

Download PDF
Quick Facts
  • Population:
    • 0.6 million
  • GDP (PPP):
    • $1.1 billion
    • 1.5% growth
    • 5.8% 5-year compound annual growth
    • $1,895 per capita
  • Unemployment:
    • 3.9%
  • Inflation (CPI):
    • 5.1%
  • FDI Inflow:
    • $23.7 million
Embed This Data

The economy of the Solomon Islands continues to be heavily dependent on forestry and suffers from a lack of dynamism. Poor infrastructure and an underdeveloped regulatory environment impede expansion and diversification of the productive base. The financial system remains rudimentary and lacks the capacity to provide sufficient credit for entrepreneurial activity.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 47 (no change)
  • Economic Freedom Status: Repressed
  • Global Ranking: 161st
  • Regional Ranking: 37th in the Asia–Pacific Region
  • Notable Successes: Trade Freedom and Monetary Freedom
  • Concerns: Rule of Law, Investment Freedom, and Management of Public Finance
  • Overall Score Change Since 2012: +0.8

The rule of law is not effectively enforced across the country, and weak property rights and a lack of transparency in the legal system are a weighty drag on private-sector development. Despite reform efforts, systemic corruption increases the cost of business and deters much-needed long-term investment.



The Solomon Islands is a parliamentary democracy and one of Asia’s poorest nations. Danny Philip’s election as prime minister in 2010 seemingly stabilized a chaotic political environment, but allegations of corruption forced Philip to resign in 2011. Prime Minister Manasseh Sogavare has been in office since 2014. In recent years, Australia has had to intervene several times to defuse ethnic conflict. Australia, the European Union, Japan, New Zealand, and Taiwan provide significant financial aid. Most of the population lives in rural communities, and three-fourths of the workforce is engaged in subsistence farming and fishing. Economic growth depends largely on logging and timber exports.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 25.0 Create a Graph using this measurement

Public offices are widely viewed as opportunities for personal enrichment. Many public officials have faced charges of official abuse and corruption, and even former prime ministers have been convicted. Threats against judges and prosecutors have weakened the judicial system’s independence and rigor. Judges and prosecutors also have been implicated in corruption scandals. Land ownership is reserved for Solomon Islanders.

Limited GovernmentView Methodology

The top personal income tax rate is 40 percent, and the top corporate tax rate is 30 percent. Other taxes include a property tax and a sales tax. The overall tax burden equals 36.9 percent of total domestic income. Government spending has risen and now equals 49.9 percent of GDP. Budget surpluses have kept public debt below 15 percent of total domestic output.

Regulatory EfficiencyView Methodology

Implementation of a simplified registration process has marginally improved the business environment. The regulatory process continues to be undermined by uneven enforcement of existing laws. The labor market is underdeveloped, and informal labor activity remains substantial. About one-third of total public spending subsidizes infrastructure development projects, many of them funded by international donors.

Open MarketsView Methodology

The Solomon Islands’ average tariff rate is 8.5 percent. State-owned enterprises operate in the electricity and broadcasting sectors. Foreign investment in some sectors of the economy is restricted. Inadequate infrastructure and political uncertainty also discourage investment. Banking dominates the underdeveloped financial sector, and access to credit, particularly long-term credit, remains very limited.

Country's Score Over Time

Bar Graph of Solomon Islands Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Solomon Islands to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Hong Kong88.6-1.0
3New Zealand81.6-0.5
7South Korea71.70.2
8Malaysia 71.50.7
10Brunei Darussalam67.3-1.6
11Thailand 63.91.5
17Sri Lanka59.91.3
19Kyrgyz Republic 59.6-1.7
26Pakistan 55.90.3
29Bangladesh 53.3-0.6
30Papua New Guinea53.20.1
37Solomon Islands470.0
42North Korea2.31.0
See Entire Region List ›

View all countries ›

Back to Top