Chinese Government provides SBD 90 million cash grant to the Solomon Islands Ministry of Rural Development to support Constituency Development Program (CDP) in 2021

On September 16, 2019, the Government of the Solomon Islands announced that it was severing diplomatic ties with the Republic of China (‘Taiwan’) and establishing diplomatic ties with the People’s Republic of China (‘China’).

As part of a larger deal associated with the establishment of diplomatic relations, the Chinese Government promised to take over the funding of the Constituency Development Program (also known as the CDP, the Rural Development Constituency, and Constituency Development Funds), which was previously funded by the Taiwanese Government.

Constituency Development Funds (CDFs) are allocations of public funds provided to Members of Parliament (MPs) across 50 constituencies in the country to be spent at their discretion. The Constituency Development Fund Act 2013 describes CDFs as ‘funds allocated to constituencies’. Broadly speaking, CDFs are considered to be any funds which are channeled through a constituency-based account.

Consequently, CDFs bypass the existing administrative structure (central and provincial governments) for service delivery and utilize the political structure (electoral constituencies) for the disbursement of funds and service delivery outputs. This forces the two delivery mechanisms (administrative and political) to be competitors.

According to official Government of the Solomon Islands records, the Chinese Government provided SBD$83,682,010 in general budget support in 2019 to the CDP (captured in Record ID#96376) and SBD$94,026,128 for individual development projects under the CDP in 2019 (captured in Record ID#96380), SBD$103,305,788 in general budget support in 2020 to the CDP (captured in Record ID#96377) and SBD$90,000,000 for individual development projects under the CDP in 2020 (captured in Record ID#96378), and SBD$90,000,000 in general budget support in 2021 to the CDP (captured in Record ID#96379) and SBD$90,000,000 for individual development projects under the CDP in 2021 (captured in Record ID#96381).

These funds were channeled through the Ministry of Rural Development and distributed across 50 electoral constituencies.

The funds were reportedly used to support social infrastructure at the local/community level, water supply and sanitation projects, and income-generating initiatives to improve rural livelihoods.

However, according to a 2022 World Bank Public Expenditure Review, ‘[t]here is little information as to how CDF resources are used.

Lack of data contributes to a poor understanding of how CDFs are managed by MPs and their staff (from selection to day-to-day management), and how effective and sustainable the expenditure is.

One of the challenges is rooted in the way CDF expenditure is reported with funds recorded as spent at the time of the transfer to MPs not at the point of execution, thus obscuring the targeting of funds.

However, it is understood that a sizable share of CDF resources is used for local infrastructure.' In August 2022, the Office of Prime Minister Manesseh Sogavare rejected allegations it was using CDP money from the Chinese Government to stay in power.