The Solomon Islands is on the cusp of a significant transition as it graduates from least developed country (LDC) status in 2027. To ensure a seamless transition, the nation adopted a Smooth Transition Strategy in April 2025 as a roadmap to guide the country towards a more resilient and sustainable future.
The Solomon Islands became an LDC in 1991, a designation that provided access to special international support measures. Less than three decades later, in 2018, the nation was recommended for graduation based on notable improvements in its Human Asset Index and Gross National Income. However, the journey has not been without its bumps. Initially scheduled for graduation in December 2024, the timeline was extended to December 2027, due to the global COVID-19 pandemic, national security challenges and subsequent economic shocks. These unforeseen events highlighted the inherent vulnerability of the Solomon Islands’ economy, underscoring the need for a strategic approach to manage the transition out of LDC status, thus leading to the formulation of a tailored strategy ahead of graduation.
Ensuring a smooth transition
The Smooth Transition Strategy aims to proactively manage the impacts of graduation, particularly on trade and finance. It outlines a series of targeted and complementary measures to mitigate these impacts and clearly identifies key agencies to support their implementation. The Strategy is purposefully positioned as an integral subset of the National Development Strategy (NDS) 2016-2035, ensuring alignment with existing national plans and frameworks.
Graduation from LDC status will inevitably affect the Solomon Islands’ access to international support measures. The Strategy delves into the expected impacts on trade, finance, and other forms of support. For instance, while the country will lose some preferential market access, it will retain duty-free quota-free access to major markets such as China, the European Union and Australia, due to the nature of its primary exports (rough wood and logs) or existing trade provisions. The Strategy also considers the potential loss of special and differential treatment under WTO agreements and the potential impact on development assistance, necessitating proactive measures to mitigate these effects.
In response to the anticipated impacts of graduation, the Strategy articulates a set of concrete and actionable measures. These include exploring the possibility of extending duty concessions with several trading partners, enhancing compliance with export standards and identifying new markets for export diversification. The strategy also emphasises the fundamental importance of technical assistance and retaining access to concessional financing mechanisms to support the transition.
Recognising that a successful transition requires more than sector-specific interventions, the Strategy highlights the need for complementary measures to reinforce national development efforts. These include strengthening institutional capacity, enhancing policy coherence, and improving coordination. Furthermore, it underscores the indispensable role of effective governance, strategic investment, and robust private sector engagement in addressing structural challenges and unlocking new opportunities for sustained growth.
The successful implementation of the Strategy requires political will from the Government and collaboration across government agencies, development partners, and other stakeholders. The Ministry of National Planning and Development Coordination will oversee monitoring and reporting, ensuring alignment with the NDS and sector plans. The Strategy will be integrated into the existing planning framework, with specific measures incorporated into sector plans and assessed through the annual national budget process.
Role of the international community
The Strategy recognises the technical assistance provided by the United Nations, particularly by ESCAP and other members of the United Nations Inter-Agency Task Force on LDC Graduation, in its formulation and validation. It also acknowledges the crucial role of the international community in the successful implementation of the Strategy. Ongoing and strengthened collaboration with development and trade partners will be essential for securing the necessary financial resources and technical expertise.
The Solomon Islands’ Smooth Transition Strategy is a testament to the nation’s resilience and forward-thinking approach. By strategically addressing the challenges and opportunities of graduation, the Solomon Islands is charting a course toward a more prosperous and sustainable future. As the nation navigates these uncharted waters, the Strategy will serve as a beacon, guiding the way to a resilient tomorrow.