| The Courier - N°159 - Sept- Oct 1996 Dossier Investing in People Country Reports: Mali ; Western Samoa |
Small countries with a limited resource base are frequently buffeted by economic forces over which they have no control. If you live in Western Samoa, however, you are likely to be preoccupied by forces of a different kind. For while most of the time, Mother Nature presents a benign face in this attractive and fertile Pacific state, every once in a while, she loses her temper.
Tropical storms are an unavoidable reality in much of the Pacific and they breed a special form of resilience which should impress the inhabitants of more temperate climes. The people of Samoa, and other cyclone prone countries in the region, are adept at picking themselves up and, if necessary, starting all over again, once the winds have passed. But between 1989 and 1993, the Samoans' capacity for renewal was to be tested more than ever before. Like a plucky boxer facing a much stronger opponent, the country would just be struggling back to its feet when another hammer blow would send it reeling.
The closest to a knock-out punch came in December 1991 in the shape of Cyclone Val-the worst storm to hit the islands in more than a century. This brought death and injury, as well as widespread economic devastation. The coconut and coffee trees on which the country depends for much of its export income were either swept away or stripped bare. Many homes were also destroyed and infrastructures were severely damaged. (The 1993 cyclone, although less powerful, caused further crop destruction.)
Over the last five years, virtually all the damage has been repaired. Indeed, a great many facilities have been upgraded with plans for further improvements in the pipeline. To some extent, the credit for this remarkable recovery must be shared. Overseas donors played an important part in restoring key infrastructures while expatriate Samoans, whose remittances are an important 'invisible' earning for the country in normal times, also rallied round. But the key players, of course, were the people themselves, who rose to the challenge of reconstructing their country.
Today, Western Samoa - which has a population of 165 000-is experiencing an economic mini-boom. Growth during 1996 is expected to be between 5% and 6% for the second consecutive year and there are encouraging signs of a new, home-grown entrepreneurial spirit. This is not to say that everything in the garden is rosy. The latest growth figures need to be set against the unavoidable recession caused by Cyclones Val and Ofa (which struck in 1990) and a mediocre economic performance throughout the 1980s. And while there is some evidence of diversification, the economy is still very narrowly based. There is also considerable room for improvements in health care and education provision. Doubts have been expressed, for example, as to the accuracy of the official literacy figures. Finally, there is a high level of dependence on foreign aid (the country's main donors are the Asian Development Bank, Japan, Australia and the European Community).
Economists will tell you how notoriously difficult it is to express the wealth of a developing nation in statistical form. GDP figures can offer a pointer, but they do not present the whole picture as they take no account of the informal economy. Western Samoa provides a particularly good illustration. At US $950, the estimated per capita GDP is very low by Pacific standards. Yet there is clearly no starvation. A great deal of the food consumed by the Samoans simply does not 'show up' in the cash economy. The term subsistence agriculture seems peculiarly inappropriate here since locally available food sources are many and varied.
Similarly, many of the materials used to build the 'fares' (traditional houses) in the villages are obtained without recourse to builders' merchants. And when a Samoan wants a new house, he builds it himself-with the help of his family and neighbours. This involves skilled carpentry work-for which people would pay highly in industrialised societies - and which does not register either in the country's economic statistics. So it is clear that the basic GDP figures do not paint a complete picture. Nonetheless, they illustrate the relatively underdeveloped state of the formal economy.
Looking at exports, Western Samoa's traditional agricultural sector has gone through some rough times, for a variety of reasons. In the past, the mainstays were copra and coconut products (oil and cream), cocoa and tarot
The storms destroyed or damaged many of the coconut and cocoa trees, wiping out exports for a number of years until new plantings could reach maturity. The market in food products derived from the coconut had been depressed in any case. One reason for this was negative publicity over the high cholesterol content of coconuts, although more recent research, suggesting that not all types of cholesterol are bad for you, has at least partly restored the reputation of this highly flexible crop.
Taro, which is Western Samoa's staple food crop, was exported in ever increasing quantities during the 1980s but the trade has suffered badly in recent years because of an outbreak of taro leaf blight.
Today, Western Samoa's most important primary exports are, once again, coconut-based (oil and cream). With the new trees reaching maturity, production recommenced on a small scale towards the end of 1994. The following year saw a big jump in exports and the figures for 1996 are expected to - come close to pre-cyclone levels,The marketing situation has also improved as a result of privatisation. The old Copra Board, a parastatal with a reputation for inefficiency, was abolished in 1990, its assets being bought for a nominal sum by a Samoan businessman who has invested heavily in refurbishment. This has all been achieved despite continuing low prices for coconut products in the world markets.
Cocoa takes longer to recover but harvesting of the first new crop is due to take place this year with the emphasis on a high value, fine tasting variety. A new chocolate factory (Wilex C.C.P. Ltd), also masterminded by a local entrepreneur, Eddie Wilson, has been built with assistance from the EU's Centre for the Development of Industry (CDI) and a credit from the European Investment Bank (EIB) channelled through the Development Bank of Western Samoa (DBWS). This is a particularly significant venture since it aims to maximise added value before export. The factory is currently operating well below full capacity, awaiting the arrival of the first local crop, but there are high hopes for its long term success.
The other main crops exported are bananas and kava. The latter is a mild narcotic based on the root of the pepper plant, which is used in pharmaceutical preparations. It also has an important place in Samoan (and wider Pacific) culture, being drunk in diluted form on ceremonial occasions.
With a view to achieving further export diversification, a number of other agricultural/horticultural export possibilities have also been identified. These include asparagus, mangos and cut flowers. The most likely potential market for new tropical production is New Zealand-already the destination for more than half of Western Samoa's exports. However, this country has stringent health rules with rigorous controls on the import of plant and animal material. The understandable aim is to protect the local farming sector from diseases introduced from outside, but it creates an additional hurdle for potential exporters in the developing countries of the Pacific. In particular, Western Samoa needs to come to grips with the fruit fly problem, if it wishes to make inroads into the New Zealand market.
Timber also once featured prominently in the trade statistics before declining at the end of the 1980s. There are hopes for a revival here with the authorities keen to encourage value added processing of wood products within the country.
Despite its obvious association with the sea, Western Samoa has never really gone in for commercial fishing. While the Exclusive Economic Zone is small by Pacific standards, the country being 'hemmed in' by other island nations and territories, it is still more than 40 times the land area. The government would particularly like to attract foreign investment in fish processing and canning.
It is probably unrealistic to expect a small and geographically isolated nation such as Western Samoa to develop a highly diversified industrial base but there have been one or two notable ventures which show signs of potential. The above-mentioned chocolate factory is one such. The country also has a highly successful brewery. It is not uncommon for developing nations to produce their own local beer but Western Samoa's Vailima brand has managed to break out successfully into the regional market, bringing in useful foreign exchange in the process.
The biggest industrial success story-dwarfing all other manufacturing ventures-has been the establishment of a factory by the Japanese company Yazaki to produce wire harnesses for cars. The business employs some 2500 people (mainly women) in a highly labour-intensive operation-and it makes a significant contribution to the trade balance. The value-added electrical components are re-exported for incorporation into cars sold mainly in Australia.
The company was attracted by a number of factors including low labour costs in this non-unionised society, and the political stability of Western Samoa. Perhaps most important, however, were the incentives offered by the government. These went well beyond the usual tax holidays provided by developing countries to attract foreign investors. Indeed, it was the government that built the factory and the company was allowed to occupy it rent-free. Some observers have expressed concern at such largesse but the authorities are insistent that it was still a good deal. They point to the jobs that were created (a huge number by Samoan standards) at a time when many people's livelihoods were threatened by taro blight. They also argue that the profits of the operation are retained in Western Samoa, thereby helping to boost the wider economy.
The service sector offers perhaps the best potential for expansion of Western Samoa's formal economy. Top of the list here comes tourism (featured in a separate article), which has been expanding much faster than the underlying rate of economic growth. Despite the increase in both visitors and income, tourism is still underdeveloped. The government (supported by the opposition) believes that this is one field where Western Samoa definitely has a 'comparative advantage'.
Linked to tourism, of course, is the air transport business. Although it might still be possible to obtain passage on a merchant ship bound for the South Sea islands, the vast majority of visitors arrive by plane, and good air connections are obviously essential. The history of the country's national carrier, Polynesian Airlines, offers two object lessons. The first is how not to run an airline and the second, more recent and encouraging one, is how to grasp the nettle when the crisis finally breaks. In 1992, with tourism in mind, the government owned airline decided to expand its operations substantially. It leased three long-haul aircraft which it hoped to fill with visitors in search of a new tropical haven. The market research was clearly inadequate and the planes flew with many empty seats. Other aspects of the company's management proved deficient and there was a chronic lack of financial. Debts mounted at such a frightening rate that the budgetary position of the entire country was threatened.
In 1994, the government took decisive action, bringing in Richard Gates, the experienced airline entrepreneur, who is credited with having turned Air New Zealand around. Relatively small airline businesses in the Pacific are not likely to make a.fortune for anyone, but with proper management, they should at least be able to break even and perhaps even turn in a small profit. This was not something that even the prodigious talents of Mr Gates could achieve, however, with the crushing burden of debt accumulated by Polynesian Airlines. So the government assumed responsibility for the debts and then gave the new manager a free hand, on the firm understanding that the taxpayer would not come to the rescue again.
On the airline side, the operation was drastically slimmed down. The leases on the large aircraft were terminated, staff 'down-sizing' took place and bath ticketing and financial management were tightened up. The positive impact of these measures was soon evident, with a small operating profit registered in 1995.
Left with huge debts, the action of the authorities was equally impressive, although it entailed discomfort for most Western Samoans. In order to restore its own financial position, the government instituted 15% public expenditure cuts across the board. In macro-economic terms, it is generally acknowledged that this strong medicine was needed, but the social consequences were all too clear as well: reduced funds for health and education, and pressure on important capital investment budgets. Perhaps fortuitously for the country, the financial crisis caused by the Polynesian Airlines debacle coincided with the payment of a substantial Stabex payment from the European Community. The country's was eligible for Stabex funds because of the collapse in agricultural export receipts following the cyclones, and the money-which was directed mainly into infrastructure projects-could hardly have come at a better time. Meanwhile, the government has paid off a large portion of the airline's debt with the residue rescheduled for payment over a five-year period.
The government has taken a number of steps aimed at attracting offshore finance business to the country. Western Samoa now has a comprehensive legal framework governing such activities, including crucial provisions guaranteeing secrecy. Another vital factor in attracting offshore funds, which has already been mentioned, is political stability. There is even the suggestion that the country's time zone, which puts it almost a day behind Australia and New Zealand, might somehow be turned to its advantage in global financial dealings (although it is not clear how the benefit would be derived in otherwise legitimate transactions).
The last three years have seen a big increase in company incorporations and there are now more than 2500 offshore companies (including 15 banks and eight insurance companies) registered. It is difficult to imagine Western Samoa ever challenging the likes of Liechtenstein, the Bahamas or Jersey in this market, given its geographical distance from the main industrialised nations, but even a successful 'niche' operation could bring some useful income to the country.
Five years ago, when the Courier last covered Western Samoa, the emphasis was heavily on recent constitutional changes and most notably, the introduction of universal franchise. At the time, there was a lot of interest in how the traditional Samoan way of life (faa-Samoa) would be affected. This is based on the village structure and the matai system which vests considerable authority in family heads. There is also a strong attachment to the Christian faith, as exemplified by strict Sunday observance rules (also found in Tonga and other Pacific countries).
In fact, the Samoans appear to have embraced their more 'westernised' system of government without any difficulty. Although everyone over 21 has a vote, one still has to be a matai to be eligible to stand for Parliament. In contrast to hierarchical structures elsewhere in the Pacific, however, the system here seems to be based largely on merit and it is not particularly exclusive (there are an estimated 19 000 matai). The matai, nonetheless, exercise considerable authority in village affairs, most notably over the use of customary land.
In short, the change seems to have caused few problems because Western Samoa already had its own decentralised form of democracy. It was not a question of educating people about hitherto alien concepts.
The fact that change in Western Samoa is slow and progressive rather than sudden and violent, is recognised by most observers to be a good thing. An illustration of this evolutionary approach is the arrangement governing the position of Head of State. The post, which is held by His Highness Malietoa Tunamefili 11, currently appears to be a cross between a presidency and a monarchy. Under the 1962 independence constitution, two of the country's four paramount chiefs were given the position, to be held jointly, for life. With the death of Tupua Tamasese Meaole in 1963, the surviving incumbent became sole Head of State. There will be no automatic succession, however, and Parliament will decide who should have the post in future, with the term of office limited to five years. There is obviously a great deal of respect for the Head of State and his office among Western Samoans, although it should be stressed that his role is largely ceremonial, with political authority being vested in the elected government.
As for party politics, there are two groupings represented in Parliament, the ruling Human Rights Protection Party and the opposition Samoa National Development Party. The party system is not particularly strong, however, being based more on personalities than ideology. Corruption is not seen to be a major problem although a major row did blow up recently over a critical report issued by the Auditor-General for 1994. This led to him being suspended and this issue had not yet been resolved at the time The Courier went to press.
Western Samoa is not unique in having to adapt to a rapidly changing world. The phenomenon affects all societies, with modern communications technology increasingly breaking down the 'protection' that geographical isolation used to afford. In Westem Samoa, as elsewhere, there must be concern about the impact of this on the country's traditional way of life. Yet the indications are that this Pacific nation is managing the transition rather better than many other developing countries. The people seem to combine an unselfconscious pride in their traditions and cultural assets with a pragmatic welcoming of ideas from outside which help to improve their material wellbeing. The hope must be that this process can continue as we approach the third millennium. S'imon Homer
According to archaeological evidence, the islands of Samoa were first settled about 3000 years ago, after gradual migration within the Pacific from people originally from South East Asia. Samoa, it seems, was the cradle of the Polynesian culture, and settlers from there spread to other islands of Polynesia in the east, north and south.
The first European to sight the group in 1722 was Jacob Roggeveen, and although there was intermittent contact between European sailing vessels and the islanders during the 18th century, more permanent contact was established with the arrival of the European missionaries in the early 1980s. They were soon followed by traders looking for copra, beche de mer, sandalwood and other products. Later, some of the trading firms, notably German, fumed to large-scale production of copra and other products such as cotton, cacao and rubber, which also led a corresponding increase in interest on the part of colonial powers.
In the late 1800s, the Samoan group became the focus of colonial rivalry between Great Britain, the USA and Germany, leading, in 1900, to the partitioning of the islands between Germany and the United States. The eastern part of the group came under American control and has remained so to this day, while Germany controlled the western islands. Britain received territorial concessions elsewhere in the Pacific.
At the outbreak of World War I, New Zealand took over what had come to be known as German Samoa, and became the administrative power there under the League of Nations and later the United Nations until Western Samoa became the first Patific island nation to become an independent state in 1962.
(Source: Government of Western Samoa. this text is taken from the information brochure prepared by the authorities for distribution to delegates at the recent ACP-EU Council of Ministers meeting).
Dream ticket ?
Depart Nuku'alofa-12.00, January l 2000 Arrive Apia - 14.00, December 37 1999
People with cash to burn are often ready to spend surprising amounts of money in their pursuit of the unusual. Tonga has already recognised this as it begins preparing for the third millennium Lying just to the west of the International Dateline, it believes it will the first country to see the sun rise on the new millennium, although other Pacific territories have also made the claim. (For this purpose, we ignore the purists who point out that the third millennium will not actually begin until January 1, 2001.) Celebrations are planned and bookings are already being taken.
Westem Samoa is obviously not in the running for this distinction since it is east of the dateline, but what this means is it will be the last nation in the world to say goodbye to the old millennium. This surely presents an opportunity for the local tourist industry.
And what about those intrepid voyagers who fancy greeting the year 2000 in Tonga and then 'seeing out' the old millennium 24 hours later in Samoa. If i were an airline manager, I would be examining the possibility of extra flights from Nuku'alofa on the big day. (Let's hope it's not a Sunday I)
'Economic future in tourism end manufacturing'
The Courier visited Western Samoa at the end of June while the country was hosting the ACP-EU Council of Ministers meeting. At the time, veteran Prime Minister, Tofilau Eti Alesana, was recovering from an operation, and his duties were being carried out by his deputy, Tuilaepa Sailele Malielegaoi, who is also the Minister of Finance. Despite a hectic schedule, the Deputy Prime Minister kindly managed to find a slot for a keynote interview with The Courier.
· There is growing evidence of a new economic dynamism in this island nation, which has managed to find its feet remarkably speedily after the destruction wrought by cyclones in 1989 and 1990. With this in mind, we began by asking the Minister about the economic prospects for the country ?
-I think they are excellent. Our country suffered a major catastrophe as a result of the cyclones, coming, as they did, in two successive years. There was major damage to our infrastructure and forestry resources- coconuts and cocoa. At the time, we estimated the bill at more than $600m. But the rehabilitation of the infrastructure went ahead quickly, thanks to the major support provided by bodies like the World Bank, the Asian Development Bank, and of course, the European Union, not to mention the bilateral donor countries who answered our call for help. So in some ways, it was a blessing in disguise. We suffered badly, but with the assistance that came, we have been able to improve our roads and electricity supply, and the protection of our foreshore. It also encouraged us to embark on replanting to replace the trees-mainly cocoa and coconut -that had been destroyed. Last year, for the first time since the cyclones, our copra exports came back in strength. We have, at last, started to approach the pre-cyclone export levels.
· What are likely to be the key sectors for future economic activity ?
-We believe that the economic future of our country now lies more in tourism and in manufacturing industries. Dealing with the latter first, we have already succeeded in attracting some industries. The major investment so-far has come from Yazaki, a Japanese company that produces wire harnessing systems (electrical components) for vehicles. This employs almost 3000 people in Western Samoa. In fact, the company set up here before the cyclones and it did not take long for us to see the benefits. The value added equivalent provided by just that one plant is roughly equivalent to our total agricultural exports for last year. So you can see the importance of manufacturing industry for us. We have provided very generous incentives and have also allocated sufficient government land to provide space for factories.
The other industry which is now in the forefront, in terms of foreign exchange earnings, is tourism. We now earn four times more from this sector than we do from agriculture-and agriculture is supposed to be the mainstay of our economy.
Of course, we mustn't reduce the priority that we give to agriculture. It is one area where we have the resources. More specifically, I think that we have great potential for beef production. If we should have another cyclone, the trees will be damaged but cattle should not be affected. So I think we should look more towards beef production and other forms of agricultural diversification. We do have some good commercial farming in place at the moment, but it is not enough. We need to do more.
· What about the chocolate industry ? You have traditionally grown cocoa but you now also have a factory to process the raw material right up to the end product.
-This is a direct result of our drive to promote more manufacturing - whether it is export-oriented or geared towards import substitution. The chocolate venture is a new one and I think there are good, prospects here as well.
An important point is that we are moving back into growing the fine flavour variety of cocoa here. We used to be one of the 14 producers of fine flavoured cocoa in the world, and we got premium prices for it. But somehow, over the years, we switched to producing inferior quality bulk cocoa. We regretted doing that and are now switching back to the higher quality variety-which is just coming back into production following the cyclones. So here we have another potential area for exports. On the other hand, taro which used to be our major export prior to 1993 is facing difficulties. It is affected by a disease, the taro blight, which seems to be uncontrollable.
· Thinking in particular of the impact of tourism, are you concerned that an influx of foreign visitors might damage Western Samoa's unique and very special culture ? I see, for example, that you now have a 'McDonalds' restaurant in the centre of Apia.
- No. I am not really concerned. In 1992, we set up our own tourism festival. This takes place in the first week of September and is quite clearly intended to be a feature event with an emphasis on promoting tourism. All the activities at the festival focus on the various aspects of our culture-the arts, the dances, the preparation of food, the singing and so on. It seems to me that our drive for tourism is actually helping to revive some of the cultural aspects that would otherwise have been dvina out. So I believe there is a complementarily between culture and tourism, so long as we ensure that the relationship between the two is maintained. I think this point is backed up, if you look at the growing popularity of ecotourism nowadays. This is very much concerned with preservation-of both the environment and of local cultures.
· In international circles, Western Samoa is deemed to be a least-developed country on account of its low GDP per head figures. Yet nobody is starving here and you appear to have a very 'rich' lifestyle, even if people don't have a great deal of cash in their pockets. Do you think the international classification is a fair one ?
- I think the first point to emphasise is that a lot of the signs of development you see here are of recent origin. They date back only to 1992-93. Infrastructures have improved considerably over a very short time and this could well create a certain impression about the people's standard of living. On the other hand, it is true that our economy is not completely based on cash. And, of course, our earnings are in Tala which go a lot further here than their dollar equivalent in the United States.
· Presumably, it is to your benefit to be classified as an LDC because it gives you access to more sources of foreign funding ?
-I am happy to leave the classification to the experts. They are the ones who come and estimate our average per capita income, which is then used as the yardstick for placing a country in one or other category. I think it is ironic though, that if you go to a country like the USA, which is supposed to be very rich, you find beggars on the street. It certainly makes you wonder. Perhaps it is not really the statistical wealth of a country that is important, but its social system. And our social system here ensures that no-one goes hungry.
· That leads on rather neatly to my next question. What do you think are the main social challenges that need to be tackled here ?
-We still have quite a lot of 'service care' needs in the villages that we need to attend to. That is why we have placed the highest priority on social services over the next five years. I am talking here in particular about health, education and water supplies. There are still a lot of villages that need to have piped water brought into the home. Education-wise, we have reasonable access, but we need to improve the teaching material that is available in the classes and upgrade the general level of village schooling. We need to dissuade families from moving to the capital in the belief that they can get better education for their children here. So we still have a lot of work to do to ensure that the primary schools in the villages are upgraded. It is not simply a question of ensuring that competent teachers are available, but also as I say, providing good teaching materials and laboratory equipment for science subjects.
· All of this obviously needs to be paid for, which entails healthy government finances. You recently had a serious problem over the debts run up by Air Polynesia, and you took very stringent measures to tackle this which resulted in expenditure cuts. What do the figures look like today ?
-They are OK. We are running a budget deficit which means we have to borrow both overseas and locally, but we try to keep the deficit at a reasonable level.
· What has been the effect of introducing the Value Added Goods and Services Sales Tax (VAGST) ?
-It has helped enormously. Of course, in order to sell the idea, we had to reduce other taxes and duties. As you know, there is an international trend towards removing customs duties and shifting revenue-raising in the direction of consumption taxes. Customs levies, which are the traditional source of revenue are diminishing. So what we have done is to lay the foundation for the eventual shift in our revenue base. Also, we promised to cut income taxes even more-from 38% to 25% within two years.
· Has this measure been implemented yet ?
-No, it is due to be introduced in 1998.
· Finally, I would like to turn to a constitutional question. Western Samoa introduced universal franchise some five or six years ago, but you still have a system in which only matai (family heads) are entitled to stand as candidates in elections. Do you envisage any further changes to the system ?
-I cannot really see that we will ever change again. The Constitution stipulates that our government is based on Samoan traditions and Christian principles. When we introduced universal suffrage, we were applying something that had always been there in any case. Samoans have always taken part in the process of choosing their leaders and voting is simply another way of doing this. The only difference is that we would arrive at a decision by getting together through our village structures and talking, whereas your system involves marking a ballot. So the change was quite in accordance with our customs.
Let me say something about the way villages choose their matai. When there is a question of succession, everyone has a right to take part in the process. There is no age limit. So in that sense, you could argue that we are more advanced. And we always had female matai, even before the arrival of the Europeans.
In this respect, I believe we are quite different from Fiji and Tonga. In Tonga, the dividing line is quite clear. If you are born a noble, you remain a noble and if you are born a commoner, you will always be a commoner. It is the same in Fiji. There, you are automatically a ratu K your father was one. By contrast, here in Samoa, my son cannot automatically succeed to my title. So to become a matai, a person has to earn it, and to put his case at the family meeting which is convened to choose a successor. Usually, the person chosen is the one who displays the best leadership qualities. I think I should also point out that becoming a matai is not that difficult. If you want to be one, you inform the family and if they think you have matured sufficiently, you will generally get the position and then become eligible to be a parliamentary candidate. It is typical that when a family sees a fellow has matured, he becomes a matai.
Area: 2934 km² (Exclusive Economic Zone of 130 000 km²)
Population density: 57 per kiLomÃ©tres
Capital: Apia (situated on the island of Upolu)
National language: Samoan (English is the business language)
Currency: Tala (WS$) made up of 100 sene. In June 1996, 1 ECU was worth approximately WS$ 3. (US$1 = WS$ 2.3)
System of government: A unicameral constitutional democracy with strong traditional elements. The current Head of State is one of the country's four paramount chiefs, and he holds the office for life. Thereafter, the Fono (Legislative Assembly) will elect the Head of State for five-year terms.
There is universal franchise (introduced in 1991) but in order to be a Parliamentary candidate, one has to be a matai (family head). Western Samoa is said to have about 19000 matai. The minimum voting age is 21.
Head of State: HH Malietoa Tanumafili II
Prime Minister: Tofilau Eti Alesana
Main political parties: Human Rights Protection Party (HRPP), Samoa National Development Party (SNDP)
Party representation in Parliament: HRPP 35, SNDP 11, Independent 3. (The HRPP total includes 11 members elected as independents in the April 1996 election who subsequently joined the governing party).
Economy (1995 figures unless otherwise stated)
Annual GDP per capita: approx US$ 950
GDP growth rate: 7%. The target for 1996 is 34%
Principal exports: coconut oil (WS $8m), coconut cream (WS $4.8m), copra (WS $2.2m).
Balance of payments: exports - WS $21.7m, imports - WS $228.1m. 'Invisible' earnings, officially described as 'net foreign earnings' amounted to WS $171m, leaving a current amount deficit of WS $36.8m in 1995 (20%lower than the previous year). The main 'invisibles' are private transfers (remittances from Western Samoans living abroad), tourism, income from services and the value added trade of the Yazaki electrical components firm.
Inflation rate (end 1995): 1 %. Inflation tends to fluctuate a great deal. The figure for 1994 was 18.4%.
Government budget (projected for 1996/97): revenue WS $288.4m, expenditure WS $312.7m, deficit WS $24.3m.
Accumulated government debt: WS$ 389 m
Life expectancy at birth (1993): 67.8 years
Adult literacy (1993): 98% (A UNESCO report in 1994 suggested that real literacy levels were significantly below those indicated in official figures)
Enrolment in education: all levels from age 6-23: 74%
Human Development Index rating: 0.700 (88th out of 174)
Folasaito Joe Annandale and his wife Tui are the brains behind Western Samoa's latest tourist facility- the Sinalei Reef Resort, which has just opened on the beautiful south coast of Upolu island. They are among a growing number of Samoan entrepreneurs who are injecting new dynamism into the country's economy although they are somewhat unusual in the tourist trade. With the notable exception of the famous 'Aggie Grey's Hotel' in Apia, tourist accommodation in Western Samoa has tended to be the preserve of foreign investors, including some of the major international hotel chains.
At first sight, it is surprising to discover how underdeveloped the tourism sector is in Western Samoa. Tour operators may be inclined to use the phrase 'tropical paradise' a little too freely but this island nation certainly seems to meet most of the essential criteria. It has the obligatory golden beaches fringed with palm trees, extensive coral reefs and striking mountain scenery overlaid with lush vegetation. The vivid colours leave a particularly strong impression. Greens predominate but there are also many copper-leafed trees and bushes, and an abundance of red, orange and yellow flowers. Western Samoa can also offer a number of special features which are important in marketing terms. There is, of course, the legendary hospitality of the Samoans and their distinctive and vibrant traditions. This must be one of the most musically 'literate' populations in the world, a talent which is reflected in the numerous choirs/dance groups. The harmonies are impressive and the traditional dances are both expressive and entertaining. There is also the unique 'fare' architecture which is a particular source of fascination to outsiders, not to mention the Robert Louis Stevenson connection. The famous author spent the last four years of his life in Western Samoa and the house where he lived- which used to be the Head of State's residence - has recently been converted into a museum.
The potential for expanding tourism is something that has not escaped the government. In today's highly competitive free-market world, countries are being urged to exploit their 'comparative advantage' and the Western Samoan authorities recognise that this sector offers some of the best prospects for future growth.
Like most other economic activities, the tourist trade was badly hit as a result of cyclone devastation in 1989 and 1990. However, visitor numbers have increased substantially since then. Indeed, looking at year on year earnings, the tourist sector is performing better than any other area of the economy. In 1994, income was WS$.58 million (50 000 + visitors). The following year, it reached WS$.78m and there are hopes that it could top WS$.100m in 1996. Of course, no-one in Samoa is talking about 'mass' tourism. The country is too far from the main industrialised nations to be able to offer traditional package holidays (perhaps fortunately !), and too small to absorb the cultural and environmental impact without lasting damage. Having said this, the market can be divided into two very distinct portions. At one end of the scale are the low spending 'back-packers'-often taking advantage of relatively cheap 'round the world' airline tickets to stop off and sample the pleasures of Western Samoa. These tourists may not spend very much on a daily basis but they are reasonably significant from a financial standpoint because they tend to stay for quite lengthy periods.
At the other end, you find the high-spending, 'exclusive' customer willing to pay for high quality accommodation and catering. Perhaps not surprisingly, the Government is more interested in attracting the latter, which is why they are keen to encourage investors such as the Annandales.
The Courier spoke to Joe Annandale about his business strategy when we recently visited the country. The Sinalei Reef Resort, which has received EIB loan financing channelled through the Development Bank of Western Samoa, has just 20 rooms (including four suites) giving it a capacity of less than 50. Customers will be offered a tropical idyll and a chance to escape completely from the pressures of modern living. The long term aim, according to Mr Annandale, is to entice Europeans in general and Germans in particular. The latter, it is said, have a preference for environmentally-friendly, 'escapist' vacations and, of course, there is a historical link between Germany and Western Samoa. Until a European clientele can be built up, the focus will be on attracting guests from Australia and New Zealand.
Although there is no question of Western Samoa being swamped by visitors from overseas, even a modest increase in tourist numbers is bound to have an impact in this country of just 165000 inhabitants. On the negative side, the Samoan system of customary (village) land ownership sometimes appears at odds with entrepreneurship founded on individual ownership of property and resources. In the early stages, Joe and Tui Annandale encountered local difficulties-including squatters-when they bought the land to develop the resort. The usual arrangement is for overseas tourism operators to lease customary land, a process which may involve protracted and ultimately fruitless negotiations with the matai (village heads) who have traditionally used the land for other purposes. Of course, the clash between traditional land tenure systems and 'modern' capitalism is not restricted to tourist ventures-as mining operators in Papua New Guinea have discovered. But while one understands the frustrations for developers, who may find themselves embroiled in complex and interminable land disputes, we should also recognise the concerns of local people who see a possible threat to their way of life.
On the positive side, new tourism developments mean jobs and trading opportunities. In the building of the Sinalei Resort, the Annandales drew heavily on local labour, employing 35 people from the neighbourhood. As Mr Annandale pointed out, this was essential for a complex designed to fit in with the local environment. The Samoans have always built their own houses and only they had the required carpentry skills. The resort also employs 35 regular staff for catering, housekeeping etc. and again, the majority are local people.
Finally, there is one criticism often levelled against tourist ventures which certainly does not apply at the Sinalei Reef (or other Samoan hotels). This is that most of the food and drink consumed by visitors is imported. The Annandales make a point of purchasing their fish, meat and fruit locally, thereby ensuring that some of the financial benefits of their venture flow back to their own community: in short, a happy combination of astute public relations and good economics.
'Revive the agricultural base'
Tupua Tamasese Efi a former Prime Minister of Western Samoa, is leader of the opposition Samoa National Development Party which won 11 of the 49 seats in the parliamentary elections held in April 1996. In this interview, he outlines his own and his party's views on some of the key political and economic issues in his country.
· In what ways does your party offer a different agenda from that of the governing HRPP ?
-I think the differences are mainly of emphasis. The present government tends to focus on law-making and exploiting the country's least developed status. Our focus would be more on developing our indigenous agricultural industries. If you scrutinise the economic picture in Samoa, you will find that there has been a very substantial decline in agricultural exports in the last fifteen years. Our economy, if you can call it that, is increasingly sustained by largesse-the donations that we get from overseas. This has complicated our situation. Our relative economic independence has been sabotaged to a point where, suddenly, we are getting a proletariat. That might be unavoidable in a lot of places, but it doesn't have to happen in a small country like ours which has self-sustaining village units, and a potentially secure agricultural base supported by products like cocoa, copra and bananas. If you look at what is happening today, you see that, all of a sudden, we have a new class of under-privileged people with absolutely no income at all. And the tragedy is that it has happened without anyone really noticing.
So our emphasis is to try and revive our agricultural base, and to seek out exports. In the past, our economy was sustained by cocoa and copra exports, and a lot of our food was sold to New Zealand. Now, you find that there are hardly any exports.
· So your focus would be more on boosting the traditional aspects of the Samoan economy.
-Not necessarily traditional. Our party is not bound to cocoa, or copra or whatever. But we are committed to improving our agriculture. It matters little whether it is traditional or other crops. But we need to break back into the New Zealand market. This is the best place to aim for. Australia has its own tropical sector and nothing that we can produce is needed by them. New Zealand is different. One of the biggest challenges we have to overcome in getting back into that market is our fruit fly problem. It would seem sensible for us to channel substantial resources into overcoming this hurdle so that we can sell to New Zealand again. There is a tremendous potential market-and not just for copra. There are also products such as flowers, and a whole number of other possibilities.
· Given what you have just said,what emphasis would you place on sectors like manufacturing and tourism ?
-I think that tourism is an obvious way to go and this is where we are in agreement with the government. Of course, you will have heard of the debacle of the Air Polynesia finances. When you compare the losses that were run up with our foreign exchange reserves you get some idea of how enormous the problem was. It was a situation that went badly awry.
This issue aside, we agree that we need to get into tourism-but it must be within reason. Part of the explanation for people gravitating towards tourism is that they see it as the only available avenue-or at least the most visible way of making money.
Another economic point I want to raise concerns debt. Loans can be a quick fix, but when your whole economy is tied to indebtedness, you are creating something that is built on sand. You end 'A potentially secure agricultural base' up acquiring more and more capital items that are totally unrelated to your present or likely future resources. This is one of the most destructive things that can happen to a society, and it is very clearly happening here.
· You have a rich and vibrant living culture here in Western Samoa. Are you concerned that globalisation could ultimately pose a threat to this ?
-No, I am not worried. You have to accept it as a natural development. The things that are distinctive in our culture have to find their place in adapting to the new realities. There is no point putting your head in the sand.
· Turning to political aspects, you now have universal franchise, but you still have to be a matai to be eligible to stand for Parliament Does your party have any plans to change this ?
-Some years ago, we had a constitutional convention which led to changes in the system. Attached to that was a provision requiring a further constitutional convention to be convened in 20 or 25 years (I can't remember the exact period). So we are committed to that. We have to sit down and look at the overall picture. We have gone a long way in terms of universal franchise and it is possible that we need to go even further.
But if one takes the United Kingdom as a model, I think the important lesson is that you should 'make haste slowly'. The genius of the Westminster model is that it involves careful evolution. I hope that this tradition will be followed by our country. The constitution, as it was put together some 30 or 40 years ago, has served its purpose very well but there are quite a few anomalies appearing now.
· What is your view about regional cooperation in the South Pacific What future do you see in working together with the other countries of the region- perhaps presenting a more united front to the outside world ?
-There is a lot of sense in the SAS approach-I am referring here to the Scandinavian countries getting together to form an airline. It is sensible to take a common stand where we have a common interest. But there are obviously intricacies resulting from historical, economic and social factors. At the moment I am reading a book on lain Macleod, the British Conservative statesman. His experience in the failed attempt to form a federation in the Caribbean is very revealing.
When you enter a common endeavour, there is always the pull of your own particular interests. And there can be a suspicion that the 'bigger boys' will use the others to promote their own interests. A lot of this may be perception rather than reality. Also, traditional rivalries can intrude. Sometimes you need to fall flat on your face before you Let me give you an example from the world of rugby. It took Rupert Murdoch to get Fiji, Tonga and Western Samoa to realise that our fates are intertwined. He has come in with a commercial package that has taken over the entire rugby scene in the region- with a heavy emphasis on Australia and New Zealand-and this has hit us in a big way. For example, we find ourselves being cut out of traditional rugby tours. There is no point in us trying to claim that we are self-sufficient in this area. The big lesson is that we need to cooperate a lot more with the Tongans and Fijians in order to make an impact on the wider rugby scene._
Focus on utilities
by Mylanwy van de Velde
Western Samoa's cooperation with the European Community began in 1975 with its accession to the LomÃ© Convention. From the start, the sector to benefit most from programmable funds (ECU 4.6 m under LomÃ© I and ECU 6m under LomÃ© II) was the energy sector, with the financing of the Samasoni Hydroelectric Scheme in the late 1970s and the Sauniatu Hydropower Scheme in the early 1980s.
In parallel, a programme of 260 microprojects was funded involving the development of poultry and pig farming, and fisheries, covering 96 villages on the main islands of Upolu and Savai'i. A further ECU 890 000 was allocated to the Western Samoa Development Bank, in the form of a credit line, to increase the Bank's lending capacity. In addition, at a time when copra exports were still considerable, the Community financed storage and handling facilities for coconut oil and copra pellets (ECU 900 000).
On top of programmable aid, Western Samoa received 12 Stabex transfers totalling ECU 9.3m for export losses on copra, wood, bananas and cocoa in the period 1975-84.
Under LomÃ© III, the development of the country's substantial hydroelectric power potential continued, and Western Samoa began to make considerable steps towards self-sufficiency in energy needs. While in 1980 some 78% of the electricity generated came from diesel plants, by 1986 this percentage had dropped to 26%. The volume of petroleum imports for electricity generation dropped to 36% in the period 1982-86. With the building of the Afulilo Hydropower Plant (LomÃ© III and IV), these volumes have decreased further, with positive benefits in terms of foreign exchange savings. The scheme (which was co-funded by the Asian Development Bank, the EIB, the World Bank and the Western Samoa Electric Power Corporation) involved the construction of a 10 million cubic metre reservoir, a penstock, a powerhouse, and the installation of mechanical equipment and transmission lines, and has contributed substantially to the quality of electricity supply on the island of Upolu.
Additional work has been done with LomÃ© IV funds to address the question of rural water supply: a water master plan and design study for a number of rural areas have been completed, and a public awareness programme on the rational use of water resources has been designed for implemention at such time as planned infrastructural work goes ahead.
Finally, an ECU 1 m microprojects programme has been initiated with the aim of financing the renovation of infrastructure for rural communities in the fields of water supply, health, education, tourism, agriculture and fisheries.
Stabex payments under LomÃ© 111 (1985-1989) and LomÃ© IV (1990-1994) amounted to ECU 11.1 m and ECU 5.7m respectively. These were paid to compensate for losses in coconut oil and copra products, especially, but also for losses on exports of cocoa beans and of wood in the rough.
In addition to the above grant aid, the EIB has provided a total of some ECU 9m in risk capital in the years since 1981, the bulk of which was used in connection with the Sauniatu and Afulilo Hydropower Schemes.
A further total of ECU 660 896 has been allocated in emergency aid to Western Samoa, in 1983 after a serious fire on Savai'i, and in 1990 and 1991 after the disastrous cyclones Ofa and Val.
Programming of the next tranche of EC funding under the eighth EDF has still to be completed, but the indications are that prominence will be given to extending and upgrading the water supply network.
A new health-centre for Tafua
The sight that greeted the people of Tafua when they emerged from shelter in 1990, following the passage of Ccyclone Ofa,was one of complete devastation. The tropical storm had been one of the worst in living memory and this village community on the island of Savai'i, together with many others in the Samoas, found themselves having to start almost from scratch. Homes had been swept away' crops destroyed and much of the essential infrastructure Iay in ruins.
It is a testament to the resilience and determination of the people in these communities that there are few signs today of the havoc wrought by the winds just six years ago. In some places, rows of dead trees still stand in silent witness to the power of Mother Nature, although the scene is softened : by the new crops and lush vegetation growing beneath. But the villagers have rebuilt their houses and, with some help from outside, they have been able to re-establish i the essential community facilities as well.
Through its micro-projects programme, the EC was able to offer a helping hand in the task of reconstruction. For the modest sum of just ECU 10 000, Tafua now has a new community health clinic adjacent to the site of the old one which was swept away by Ofa. In keeping with the rules of the scheme, the villagers were obliged to contribute 25% of the cost-which they provided in kind, in the shape of the labour for rebuilding the clinic. The Courier visited Tafua in June and was shownaround the facility by Nurse Agata Leuelu who provides primary health care for the 600 villagers. We also met local Methodist minister, the Rev. Siaosi Selesele, who explained how the people had taken shelter in the neighbouring school when the storm reached Samoa. It turned out to be the right choice as it was one of very few structures left standing in the neighbourhood. Villagers are obviously hoping that there won't be another 'Ofa' for a very long time' but if and when the next big wind does strike, the new ctinic-which has been built to withstand a lot more strain-should hopefully be able to weather the storm. In the meantime, it provides an important service in the delivery of health care to the people of the area. The European Community has also provided micro-project funding to help rebuild the health clinic at Taga on Savai'i.