The Solomon Islands' economy is largely dependent on agriculture, forestry, and fishing. For a high proportion of the population (mainly village-based), the Solomon economy involves the production of subsistence foods and other items for personal consumption. The main item of production for cash at the village level is copra (the dried flesh of coconut), but also significant in some areas is cocoa, market vegetables, and marine products including fish and shells.
The agricultural cash economy is a legacy from the British colonial period. After the establishment of the British Solomon Islands Protectorate in 1893, the colonial administration facilitated the establishment of plantations, usually run by British settlers, and the recruitment of local labor. While there were some attempts to introduce new crops into the subsistence economy, the colonial administration took few initiatives to diversify the economy before independence in 1978.
During the 1970s the logging, fishing, and rice industries increased production as a result of new private investments and international aid programs. Through the 1980s and 1990s the 2 most significant items of production for export were timber and fish. Ethnic tensions on Guadalcanal in 1999 and 2000 caused some disruptions, but a peace settlement was reached in October 2000, and these economic activities are projected to reach previous levels. Large-scale mining started in 1998, and this sector is expected to expand if political stability is maintained.
Various small-scale manufacturing enterprises in recent decades have resulted in some import substitution (replacing imports of some food, furniture, and similar items with locally made products) and limited exports of food, beverages, construction materials, and furniture. Local processing within the fishing industry is also important.
Services have been mainly confined to the public sector , particularly in civil administration and education. Tourism has remained a small-scale activity, partly because the government did not actively promote tourism as an economic alternative until the mid-1990s. An 18-month civil war disrupted economic activity in the country, but by 2001 the economy was rebounding even though tourists were warned to steer clear of Guadalcanal, where most of the fighting had occurred.