Financial crisis taking its toll

Solomon Islands has been warned to brace itself for the worst in the coming months. Central Bank Governor Denton Rarawa is predicting the economy to slow down due to global financial crisis, the Solomon Star reported. The problem, he said, is expected to continue or even worsen in 2009. Already the crisis has been felt mainly in the areas of growth, production, balance of payments, government revenues and to some extent, employment.

 

In PNG, tax revenue is expected to fall as a result of the global credit crunch. The Internal Revenue Commission (IRC) revealed that its expected tax revenue has dropped by K1.5 billion (US$0.5 billion) from last year. This year, IRC projects the tax revenue to be K4.6 billion (US$1.6 billion)-decreasing from last year's tax revenue which was projected at K6.1 billion. IRC Commissioner General Betty Palaso said the drop in tax revenue was because of the global financial crisis. The global crisis has affected world commodity markets resulting in a decrease in the prices of commodities, including the mining and petroleum sector. Statistics from IRC reveal that in the mining and petroleum sector the revenue dropped from K2,392.2 million in last year's projection to K626.5 million this year.

 

Nickel price drop puts pressure on SLN

A business analyst says New Caledonia's nickel industry is also facing pressures to adjust to the economic crisis. At New Caledonia's sole nickel producer, about 2500 workers could now face a cut in working hours as the SLN nickel company tries to cope with the price slump. SLN, the territory's biggest private sector employer, announced plans for a 10 percent reduction in working hours and a 20 percent cut in production to deal with the downturn.

 

There is an alarming increase in the reporting of suspicious transactions like fraud and money laundering. The Fiji Intelligence Unit has noted the increase of reported cases from 27 in 2007 to 202 cases in 2008. In January this year, 50 cases were reported. Unit director Razim Buksh said his unit has noticed a continuing trend in the number of people that fall victim to such scams. In 2007 alone, the FIU received 27 such cases where people were subjected to bogus investment, lottery and remittance schemes.