3 Nov 2006

Solomons Central Bank worried by drop in investor confidence

11:02 am on 3 November 2006

The head of the Solomon Islands' Central Bank says investors are shying away from the Solomon Islands following the prime minister's threats to oust the Australian-led intervention force.

Rick Hou, the governor of the Central Bank of the Solomon Islands, says the political situation in the Pacific nation remained very uncertain.

He says a Central Bank survey of investors, banks and other groups in Honiara revealed the political row between Honiara and Canberra had damaged investor confidence and left the business community nervous.

Mr Hou says people who have already put things on the ground are very nervous.

But he says others who have not put things on the ground, fairly advanced as they may be in terms of plans and financing, are now putting all these things on hold and watching and listening very carefully to what Solomon Island leaders are saying.

Solomons Prime Minister Manasseh Sogavare last month threatened to oust the Australian element of Regional Assistance Mission to the Solomon Islands (RAMSI).

He has accused Canberra of having political motives for pursuing his friend and adviser, Australian lawyer Julian Moti, over child sex charges.

Canberra denies the claim.

Rick Hou says investors, both domestic and foreign, see RAMSI as representing security, law and order and stability.