Cover Story
Samoa On A High
An outstanding haven of calm, stability and a degree of prosperity
Samoa last June reached its 40th year as an independent country. It was the first of the Pacific colonial territories to escape foreign rule that began when Germany grabbed it in 1900. In 1914, New Zealand occupied Samoa after the outbreak of the 1914-1918 war.
Forty years on from 1962, Samoa’s 176,848 citizens have cause for general satisfaction with life in their two large and several much smaller islands.
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True, the first three decades of independence were economically rocky, with earnings restricted to small amounts from bananas, cocoa, copra and a trickle of tourism.
In the 1980s, the country nearly went broke bailing out its bankrupt national airline. The banana trade collapsed, the country went to the brink of running out of foreign reserves, and public service corruption and inefficiency was rife.
Political unrest aroused by unemployment and low wages culminated in protest marches against then Prime Minister Tofilau Eti Alesana in 1997. But while two former cabinet ministers are serving life sentences for a plot in which a third cabinet minister was assassinated in 1998 and Tofilau’s successor, Tuilaepa Sailele Malielegaoi, and the Chief Justice were targeted for death, Samoa, which has no army, has remained far removed from the coups that overwhelmed such neighbours as Fiji and the Solomon Islands.
Heavy hurricane damage to infrastructure and crops in the early 1990s followed by a blight which completely destroyed taro, its primary food and export crop, were enormous setbacks. But forty years on, Samoa now appears as an outstanding haven of calm, stability and a degree of prosperity compared with most of Oceania’s 13 other independent states.
Political reforms initiated by Tofilau were followed by a radical economic reform push by Prime Minister Tuilaepa, an economist, who took over in 1999 after Tofilau’s resignation and death.
“After 40 years, there’s no resemblance to what Samoa was before,” trade, commerce and tourism minister, Hans Joachim Keil, 58, an airline pilot and former copra trader, told Islands Business.
“But it’s been good changes. We have been able to control things and work together, and there’s been freedom of expression.
“The assassination was a one off thing. People who knew Samoa couldn’t believe it. Justice was served and the guys are locked up in jail. They did it because they were evil and greedy.
“No nation is 100 percent free of corruption. But I can pretty well say that things have improved drastically than they were 30 years ago when things were really tight and regulated. When you have a strict economy and regulations people start finding a way around things.
“When you are open and transparent, and duties come down, people say why ‘do we need to smuggle when you only pay five or ten percent?’ It’s not worth the effort. You don’t get two sets of documents any more. But I can remember when that happened; one set to show to the customs and one set to pay your overseas suppliers.”
Samoa’s tax, government and economic reforms have made it something of the ‘darling’ of approving international economic aid agencies. Tuilaepa’s Human Rights Protection Party won an election two years ago and dominates the 49-member Fono (parliament) where it has little trouble contending with what for some years has been an ineffective political opposition.
For the past five years Samoa has had a relatively strong growth of about 4 percent a year. In the first nine months of last year, Gross Domestic Product (GDP) rose by just over 11 percent, while inflation dropped to 4 percent from 7 percent in 1997. The bad old days of weak foreign reserves are long gone; they stand now at a steady four months of the cost of imports.
In Apia, the capital, new buildings, steady efforts to beautify and tidy up the town, increasing number of restaurants and bars, and constant hustle and bustle present an impression of growth and business.
Fishing
At the fishing harbour, next to the fish market, small 10-metre double-hulled ‘alia’ boats which from 1995 began to land albacore tuna that swim through Samoa in previously unsuspected large amounts, are being replaced by much larger and sophisticated boats, all but a few locally owned.
With tuna sold to two canneries in American Samoa that employ more than 3000 Samoan citizens, fishing has shaped up spectacularly with 4321 tonnes worth S$36 million last year. That was 68.3 percent of all exports. Total exports that year were worth S$52.6 million.
Manufacturing
The trouble is that apart from tuna fishing and since 1999 output from a single Chinese-own garment factory, Samoa, after 40 years of independence, has found really very little that’s new in the way of goods to offset the cost of imports that totalled S$448 million last year and typically runs at over S$300 million.
The export list is lean; coconut oil, coconut cream, copra, beer and cigarettes to American Samoa. Sales of taro to New Zealand, once fetching more than S$10 million a year, have just resumed with the success of efforts to breed a disease-resistant variety able to replace one wiped out by a plant disease.
A European ban on kava, imposed last year after so far unproven allegations that tranquillisers made with it were dangerous, hit Samoa hard. Kava exports hit a peak of S$22.2 million in 1998. While a Japanese company, Yazaki, employs more than 2000 Samoans on the assembly of electrical wiring components for car manufacturers, the local value-added component is so small that what is shipped out by the factory doesn’t appear in the export figures.
“Because the value added is just the labour,” Keil explained. “We just bring in the wire and assemble it. We don’t put it in to our export figures. But it’s worth about a million a month to the economy.”
Copra
An Australian company’s recent takeover of a defunct government-owned copra mill should lead to some recovery of copra production in rural areas and make Samoa a key regional copra-milling centre.
Tourism is handicapped by an inadequate number of hotel rooms, which at last may be about to be solved. This in turn makes airlines put on more flights to Samoa.
Keil is frank about the prospects for winning foreign investment in seriously large amounts. Samoa is remote, Samoans by nature are not highly productive in their home environment, although many are attacking two or three jobs in Auckland. Prospects for landing more than a couple of big fish are not exciting.
Tourism
“We are doing what we can do. We have revised our labour legislation. Investment inquiries are coming in slowly; mainly hotels with no money and businesses with no money.
“With tourism, it is always that hotel and airline capacity is a round and round and round thing and they keep looking at each other, but our tourism is steadily growing at 5 percent.
“I would like to see one good hotel. If we get one during my tenure I’d be happy. I see developers all they time: ‘We have all these overseas funds allocated for you’ and then they want the government to come in with the money. What we want is controlled tourism.”
As in neighbouring Tonga, what keeps Samoa solvent is what the more than 100,000 or so Samoans living abroad send home to their families and tourism earnings. Last year, according to the Central Bank governor, Papali’i Scanlan, inward remittance amounted to S$149 million, which was one-third of the cost of imports.
The worry is that this flood of money will eventually diminish as feeling of ties with Samoa diminishes or should bad economic downturn in Australia, New Zealand and the United States, where most overseas Samoans live, put Samoans out of jobs.
But since speculation about the longevity of remittances began a dozen years ago, they have steadily grown. Samoans have a powerful affection for their native country and the extended families they’ve left behind.
Practically, all Samoa’s exports emanate from agriculture. Eddie Wilson, president of the Samoa Manufacturers’ Association and owner of an agricultural produce processing business, insists that intensive production and processing of coconuts for copra and oil, vanilla, cocoa, ginger, fruit and coffee could end Samoa’s fundamental economic weaknesses.
“Coconut and cocoa alone could look after more than 70 percent of the population.”
But coconut and cocoa output is a shadow of former volumes and other output is minuscule.
What the trouble is, Wilson says, is a land ownership system which makes it difficult to lease land, which except for a few bits of freehold, can’t be sold. This means that land can’t be used as collateral for loans.
Land acquisition is one of the great stumbling blocks for resort projects also. While the government has a few sites available, a prospective developer in pursuit of sites in other areas must win leasing consent from the numerous members of the landowning families. That can be an interminable and quite likely a fruitless undertaking.
The neat villages that line the 35 kilometres of road between Faleolo Airport and Apia, the homes of people who show no signs of great impoverishment, belie the poverty lying hidden by verdant vegetation a little way inland.
Beggars are appearing, the old and the very young, on the streets of Apia, where people from the larger but little developed island of Savaii, which has 24 percent of the population, flood in for education and the hope of jobs. Savaii, which Apia people treat as an escape from city pressure, is just waking up to tourism. Several small resorts have recently opened there.
The government plans to build a town there, one day. But jobs in Apia are hard to come by. A census last year showed that between 1991 and 2001 unemployment rose from 1175 to 2618. That’s just 144 more jobless a year.
Numbers are kept down by heavy migration, which keeps Samoa’s total population growth almost stagnant.
Social problems
While unemployment and population pressures are but a fraction of what other Pacific Islands countries are trying, with little success, to assuage youth, other social problems are compounded by more crimes, a worrying level of the marijuana habit and a remarkably high incidence of youth suicide, mainly by young men, that Samoa’s churches have been attempting to address with little impact for two decades.
An astute expatriate resident of Apia says if it were not for the powerful influence and social input from the churches, the government would be floundering with its efforts to address the impact of harmful erosive forces on Samoa’s still largely village-bound society.
Samoa is far better regulated than it was 20 years ago. “But there is still a fair bit of corruption,” Islands Business was told. “I think the government is also going a bit soft. There is less depth to it than there was a year or two ago.”
Apia’s 38,836 residents can expect to be hit by worsening water and waste problems unless these are attacked vigorously now, according to a report from Samoa’s newly created Planning for Urban Management Agency. Samoa’s islands are being attacked by land clearing, building, deforestation, contamination by human waste, soil erosion and fertilizers and other chemical runoff, it says.
Wilson, a dynamic character, as many of Apia’s young businesspeople are, is insistent that his country cannot rely on that remittance forever. One day they’ll dry up, he says.
Minister Keil says: “It’s nice if they keep coming since ties are still strong enough to prevent that happening. But what happens in 10 or 20 years, I can’t comment.”
