This working paper aims to better understand the process of graduation from least developed country (LDC) states in a Pacific small island developing state (SIDS), and provides the Development Assistance Committee (DAC) and other development partners with evidence-based analysis and recommendations on how to better manage transition in such context.

Solomon Islands is engaged in a multifaceted transition stage with financial, technical, geopolitical and environmental dimensions. Solomon Islands is scheduled to graduate from the category of LDC by 2024, and the global alliance for vaccines and immunisations (GAVI) financial support by 2022.

The transition finance approach used in this study shows that Development Assistance Committee (DAC) members have a crucial role to play to support the country’s transition and should utilise their official development assistance (ODA) in a way that maximises its impact. This would entail: helping the country move towards a sustainable economic model (both in terms of environmental and financial/debt sustainability), supporting the progressive substitution of ODA by other financing sources (in particular domestic resources and private investment), and adapting their role and strategy to the country’s evolving circumstances and needs (for example by establishing new economic partnerships in support of the country’s strategy of economic diversification and promotion of higher value-added trade and private investment).