PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

By Alfred Sasako

HONIARA, Solomon Islands (Solomon Star, March 29) - Much has been said and written in Solomon Islands about funding from Taiwan in recent weeks.

In particular, Taiwan is accused of operating a secret fund for political favors.

The existence of this fund, its size and its distribution has embroiled Ambassador Antonio Chen in open debate with some former members of parliament.

Thus far, the Ambassador has failed to deny or confirm that the Embassy operates a secret fund for political favors.

However, the list of recipients seems to point to the existence and size of this fund.

Given that money is power and influence, a prima facie case exists that Taiwan is truly interfering in Solomon Islands domestic politics.

Drawing from the responses by the Ambassador, so far it does appear that Taiwan operates a special projects fund, separate from the annual cash grant of SB$20 million [US$2,870,000] Taiwan provides through the National Government’s normal budgetary process.

This grant is in support of the much talked about grants called the Rural Constituency Development Fund.

This grant appears in the Government’s Recurrent Budget and is governed by the guidelines prepared by the Solomon Islands Government through the Department of Provincial Government and Constituency Development.

It is transparent and open to public scrutiny.

From the SB$20 million each of the 50 Constituencies receives SB$400,000 [US$114,800] annually.

Based on retirement, Treasury disburses these funds in four equal installments - that is SB$100,000 [US$14,350] every three months. This funding is ongoing.

In 2005, Taipei introduced for the first time another funding called Micro Project Scheme. Again, this grant of an additional SB$10 million [US$1,435,000] is distributed evenly amongst all 50 Constituencies.

This means that each Constituency is entitled to submit project proposals costing in value SB$200,000 [US$57,400].

Guidelines for this funding, stipulate among other things that all projects are to be endorsed by Members of Parliament and subsequently submitted to the Department of Planning & Aid Coordination.

An inter-departmental committee vets project submissions before they are transmitted to the Taiwanese Embassy for funding.

As implied in the involvement of the Department of National Planning and Aid Coordination, this funding comes through the Development Budget.

It is ongoing, transparent and open to public scrutiny.

There appears to be a third Taiwanese funding about which little or nothing is known.

This fund is totally separate from the SB$20 million annual grant it provides in support of the Rural Constituency Development Fund.

It is also totally separate from the ongoing SB $10 million a year Micro Project Scheme, which Taiwan introduced last year.

Accessing this secret fund can be difficult, but not impossible. Anyone including Members of Parliament can apply.

The only prerequisite requirement is that all applications must go through the Office of the Prime Minister for endorsement.

Apart from this requirement there is no other known guideline.

The Embassy works closely with the Office of the Prime Minister in terms of project submission and disbursements.

In other words, the only way to access this fund is via the Office of the Prime Minister, which endorses all project submissions.

Outside the Embassy the only other people who have access to this secret pot of gold are those in the Office of the Prime Minister.

They know for example how big this fund is and what the ceiling is in terms of funding for each project.

Statements detailing the number of projects funded, how much and project locations are sent to the Office of the Prime Minister on a regular basis. These statements also show the balance.

I have decided to buy into the debate over Taiwanese funding in the interest of transparency and accountability - the so-called pillars of good governance - that donors have sold to us in large measures in recent times.

Briefing provided to me as then Minister for Agriculture & Livestock in 2004 may help shed some light into the existence of this secret fund and how it operates.

I use the word secret because the funding does not come through the Solomon Islands’ normal budgetary process.

No one outside the Embassy and the Office of the Prime Minister have access to details of these funds.

I have seen the list of recipients for 2004. A list of recipients for 2005 is being compiled.

In pre-swearing-in briefing with senior officials of the Department in September 2004, I was told that the Government Caucus had appropriated SB$10 million from Taiwanese funding exclusively for agricultural projects.

This was later confirmed to me at Cabinet level. According to officials, the SB$10 million is part of the SB$80 million [US$11.4 million] or so annual grants from Taiwan.

The process of accessing funds from the SB$10 million [US$1.4 million] appropriation is quite elaborate.

The Department of Agriculture & Livestock would vet all project submissions before they are sent to the Office of the Prime Minister for endorsement as they make their way to the Embassy of the Republic of China for funding consideration.

Until I left the Department of Agriculture & Livestock at the end of March last year, all efforts by Department of Agriculture & Livestock’s officials to establish the existence of the SB$10 million failed.

Neither the Embassy nor the Office of the Prime Minister could confirm where the SB$10 million was and whether it had been all spent.

Many project proposals submitted via Department of Agriculture & Livestock remain largely un-funded even to today.

Money is influence. Money is power. Influence plus power equals control.

Is it possible that this secret fund, operated by the Taiwan Embassy, is intended to influence and control the Solomon Islands government, especially when the Head of Government is personally involved in terms of endorsing project proposals?

Is such an arrangement proper?

In other democracies this sort of practice is unheard of and would never be encouraged, let alone accepted.

Parliament would be against it, members of the public would be against it and in fact everyone would be against it because it is dangerous.

It has the potential to compromise the Solomon Islands government position on many issues of national interest.

It also has the potential to impair the capacity and judgment of the leader in making decisions critical to and is in the best interest of the nation in the long term.

Having direct and exclusive access to such a fund is dangerous. Because money is influence, it is open to abuse - abuse of power, abuse of position, abuse of office - something closely akin to misconduct in office or worse.

Leaders who are careless could use such funds as weapons against individual leaders who have openly expressed an opinion - a trend, which has emerged with ringing examples in recent times.

It would be in the best interest of all stakeholders if both the Embassy and the Office of the Prime Minister could publicize details of funding given out from this secret fund by mutual arrangement on a regular basis.

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