Foreign accountants take over Solomons purse-strings

HONIARA - Foreign administrators will take over the purse-strings in the near-bankrupt Solomon Islands this week to root out ghost employees and try to balance a budget plundered for years by ethnic militias.

Australian officials leading a 2225-strong force of police and troops said on Monday sorting out government finances was essential for ensuring the lawless former British protectorate gets back on its feet.

"The priority area is to develop a credible and affordable 2004 budget. The 2003 budget is to be stabilised," the senior Australian aid adviser in the South Pacific nation, Margaret Thomas, told reporters in the capital Honiara.

"The team of advisers and personnel will look at cleansing the local public service payroll, remove ghost employees and establish a secure payroll system."

The intervention force -- the biggest military deployment in the region since World War 2 -- went into the 1000-island chain last month to restore order and prevent the country becoming a base for crime and, potentially, terrorism.

Years of ethnic clashes between rival Malaita and Guadalcanal islanders fighting over land around Honiara has caused hundreds of deaths and led to a police-backed coup in 2000.

The country of 450,000 people, lying around 1800km northeast of Australia, had spiralled deeper into anarchy since the coup and disbanded militia emptied the treasury regularly by extorting "compensation" or "goodwill" payments.

The government has not serviced its debt for two years and public servants often go unpaid. The public payroll is believed to be riddled with ghost employees -- people who do no work or may not even exist.

But the intervention force, broadly welcomed by islanders and including soldiers or police from New Zealand, Fiji, Papua New Guinea and Tonga, has given the Solomons new hope. The Australian diplomat leading the force, Nick Warner, said on Monday that 2265 guns, including 575 high-powered military weapons, had been handed in ahead of the expiry of an amnesty on August 21.

In addition to policing and financial administration, the foreign force is completing Honiara's main prison so that people convicted of crimes can actually be sent to jail.

Thomas said 17 Australian accountants and advisers would take up senior positions in the finance ministry and customs, and any wrongdoing they discover would be dealt with.

"I stress that this is the first stage of a much longer process of economic reform and more broadly rebuilding the machinery of government," Thomas said.

"Other reforms will not make sense unless we can get this budget stabilisation work done."

- REUTERS