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Abstract

Stochastic dominance analysis was used to assess export performance in two Melanesian countries of similar size and structure that are comparatively well endowed with natural resources: Solomon Islands and Vanuatu. Total export values increased over the study period in Solomon Islands, brought about by a significant increase in the value of non-agricultural resource exports. Agricultural exports showed small increases but the average annual rate of growth was only 1.3 per cent for agricultural export values compared with 10.7 per cent in non-agricultural export values. The record of commodity export performance in Vanuatu over the study period was less impressive, with a small average annual decline in total export values. This decline was caused by agricultural export values falling by 1.5 per cent per annum although it showed signs of abating in the final decade of the study period. Results suggest that both countries are capable of achieving sustainable economic development, given their generous natural resource endowments, but many factors may militate against this achievement, as witnessed by the current political unrest and crisis in public finance in Solomon Islands.

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