Samoa

Politics:

• Analysis

  Samoa politics: Fourth quarter marked major milestones

  Samoa politics: Fourth quarter marked major milestones

  FROM THE ECONOMIST INTELLIGENCE UNIT

  The final quarter of 2011 in Samoa was marked in momentous fashion, with a trio of significant events. In late December 2011, as expected, the World Trade Organisation approved Samoa's membership, in a culmination of a 13-year process. Samoa now has until mid-June to ratify its accession package, which includes the controversial relaxing of rules on the importation of left-hand-drive vehicles and high-fat turkey tails.

  The new year was marked in Samoa by the country's widely reported recrossing of the International Date Line, moving a day ahead, to align the country with key trading partners, including Australia and New Zealand. The new year also saw the marking of the 50th anniversary of Samoan independence from New Zealand. A large programme of events is planned to mark the occasion throughout 2012, including the minting of commemorative coins in May.

  Ironically, early 2012 also saw the controversial government-ordered demolition in March of the "Fale Fono"--Samoa's first parliamentary house, which was opened in 1916--on safety grounds.

  April 26, 2012

• Background

  Samoa: Key figures

  Tuiatua Tupua Tamasese Efi

  A former prime minister, and the current head of state (since June 2007).

  Tuila'epa Sa'ilele Malielegaoi

  Mr Tuila'epa has served as prime minister since 1997.

  August 27, 2008

• Structure

  Samoa: Political structure

  Official name

  Independent State of Samoa

  Form of state

  Parliamentary democracy with a UK-style cabinet-led government

  The executive

  The prime minister, chosen by a majority in the Fono (parliament), selects 12 ministers to form a cabinet; cabinet decisions may be reviewed by the Executive Council, which consists of the cabinet and the head of state

  Head of state

  Tuiatua Tupua Tamasese Efi

  National legislature

  Unicameral, 49-member Fono. Of the total, 47 members are elected by all Samoans aged 21 or over to represent 41 constituencies, while the remaining two are elected from electoral rolls made up of non-Samoans. Elections are held every five years

  Legal system

  System of lower courts leading to the Court of Appeal

  National elections

  March 2011; the next election is due in March 2016

  National government

  The Human Rights Protection Party (HRPP), led by Tuila'epa Sa'ilele Malielegaoi, currently holds 30 of the 49 seats in the Fono

  Main political parties

  HRPP; Tautua Samoa Party (TSP)

  Key ministers

  Prime minister, minister of foreign affairs, tourism & trade, attorney-general: Tuila'epa Sa'ilele Malielegaoi

  Deputy prime minister, minister of commerce, industry & labour: Fonotoe Nuafesili Pierre Lauofo

  Agriculture, forests & fisheries: Lemamea Ropati

  Communications & information technology: Tuisugaletaua Sofara Aveau

  Education, sports & culture: Magele Mauiliu Magele

  Finance: Faumuina Liuga

  Health: Tuitama Leao Tuitama

  Justice: Fiame Naomi Mataafa

  Natural resources & environment: Faamoetauloa Faale

  Police: Sala Fata Pinati

  Revenue: Tuiloma Pule Lameko

  Women, community & social development: Tolofuaivalelei Falemoe Leiataua

  Works, transport & infrastructure: Manualesegalala Enokati Posala

  HRPP parliamentary speaker

  La'aulialemalietoa Leuatea Polata'ivao

  Central bank governor

  Atalina Enari

  January 15, 2013

Economy:

• Background

  Samoa: Economic background

  Gross domestic product by industrial origin
  (Tala m; constant 2002 prices)
  	2002	2003	2004	2005	2006
  Agriculture	129.8	124.7	116.1	121.6	116.6
  Manufacturing	137.3	144.5	137.0	133.3	121.5
  Electricity, gas & water	42.1	42.2	43.1	44.7	46.7
  Construction	53.8	54.8	74.3	84.5	87.7
  Trade	196.9	201.2	206.3	218.5	232.2
  Transport & communications	104.6	113.3	120.8	126.9	130.8
  Finance	76.3	82.7	90.4	94.8	102.7
  Public administration	71.0	75.0	78.9	90.5	100.5
  Others	83.4	85.1	87.9	89.2	90.7
  Less imputed bank service charges	-10.2	-10.9	-11.6	-12.0	-12.3
  GDP	885.0	912.6	943.3	991.8	1,017.2
  Source: Asian Development Bank, Key Indicators of Developing Asian and Pacific Countries.

  Download text file (csv format)

  The Samoan economy is based on agriculture, with subsistence farming the primary economic activity. The main food crops are coconuts, breadfruit, bananas, cocoa and taro (a root vegetable). Tourism also expanded in fiscal year 2007/08 (June-May), and there is a small-scale manufacturing industry.

  August 27, 2008

• Structure

  Samoa: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011a	2012b
  GDP at market prices (Tala m)	1,430.0	1,420.0	1,480.0	1,510.0	1,541.7
  GDP (US$ m)	540.8	520.0	595.7	651.6	673.6
  Real GDP growth (%)	-4.1	-1.7	1.7	1.4	2.1
  Consumer price inflation (av; %)	11.6	6.3	0.8	5.2	2.1
  Population (m)	0.2	0.2	0.2	0.2	0.2
  Exports of goods fob (US$ m)	46.9	25.9	35.1	27.4	–
  Imports of goods fob (US$ m)	-249.0	-207.9	-280.0	-318.7	–
  Current-account balance (US$ m)	-53.2	-9.3	-58.7	-76.1	–
  Foreign-exchange reserves excl gold (US$ m)	87.1	165.9	209.5	166.8	–
  Total external debt (US$ m)	205.6	235.5	–	–	–
  Debt-service ratio, paid (%)	3.5	18.2	6.7b	–	–
  Exchange rate (av) Tala:US$	2.64	2.73	2.48	2.32	2.29
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2010	% of total
  Trade	24.1
  Transport & communications	14.0
  Construction	13.7
  Agriculture	10.0
  Public administration	9.5
  Finance	9.1
  Manufacturing	8.2
  Other	11.4
  Principal exports 2011	% of total	Principal imports 2011	% of total
  Fresh fish	14.6	Food & live animals	23.9
  Coconut oil	6.9	Machinery & transport equipment	21.5
  Beer	3.6	Minerals & lubricants	21.1
  		Manufactured goods	15.2
  Main destinations of exports 2011	% of total	Main origins of imports 2011	% of total
  Australia	62.9	New Zealand	30.0
  New Zealand	19.5	Singapore	21.1
  American Samoa	6.6	US	11.2
  US	3.3	Australia	10.1
  Japan	0.5	China	6.4

  Download the numbers in Excel

  Download text file (csv format)

  January 15, 2013

• Outlook

  Samoa: Country outlook

  Samoa: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: The political scene in Samoa will continue to be dominated by the ruling Human Rights Protection Party (HRPP) during the current parliamentary term, which ends in March 2016. At present, the HRPP, led by the prime minister, Tuila'epa Sa'ilele Malielegaoi, enjoys the support of 37 members of parliament (MP), including seven independents, in the 49-seat legislature. Samoa will benefit from financial support from international donors in the 2013-14 forecast period, but this will increase the country's already significant external debt. The government's attempts to narrow the fiscal deficit will be impeded in the next two years by the need to finance reconstruction following Tropical Cyclone Evan, which struck the country in December 2012. The Economist Intelligence Unit forecasts that real GDP will grow by 2.1% a year on average in 2013-14. We expect inflation to average 2.8% a year in the period as global food and fuel prices remain relatively low.

  DOMESTIC POLITICS: The political scene in Samoa will continue to be dominated by the ruling HRPP over the current parliamentary term, which ends in March 2016. The main opposition Tautua Samoa Party (TSP) performed creditably, winning 13 seats, giving it a platform from which to pose a challenge to the HRPP. Following the poll, a string of allegations of bribery and corruption were brought before the courts, leading to the dismissal of four MPs, including three members of the HRPP and the then leader of the TSP, Va'ai Papu Vaipule. In by-elections for these seats, the HRPP won all four seats, increasing its tally of MPs to 30. It also enjoys the support of seven independent MPs. Power is increasingly being concentrated with Mr Tuila'epa. In September 2012 he appointed himself minister of the legislative assembly, a role previously held by the deputy prime minister, Fonotoe Nuafesili Pierre Lauofo. The prime minister, who now holds eight government portfolios, said that he had "hardly anything to do". The self-appointment, and the manner in which it was announced-via an interview with the Samoa Observer newspaper-will heighten concerns about Mr Tuila'epa's high-handed rule. Having successfully passed a constitutional amendment (under the previous parliament) to prohibit the formation of new parties by incumbent MPs, the HRPP will remain keen to consolidate its firm grip on power. To that end, it may seek to pass legislation that further suppresses the activities of political parties and individuals outside the ruling party, as well as tightening the eligibility requirements for independents running for office. The HRPP is likely to govern for its full five-year term, particularly given that it has the support of some important independent lawmakers, but it may struggle to win an equally comfortable majority in 2016.

  INTERNATIONAL RELATIONS: Although the HRPP's dominance of Samoan politics draws periodic criticism from the governments of Australia and New Zealand, funding from these countries will continue. Both offered aid to Samoa in the wake of Cyclone Evan. Samoa's relations with neighbouring American Samoa should improve, after inter-government talks were held in November following a six-year hiatus. Bilateral co-operation on trade and immigration issues is likely to form the focus of future talks. Tensions between the governments of Samoa and Fiji will continue to simmer throughout 2013-14. Samoa's leadership will remain critical of the postponement of democratic elections in Fiji until at least 2014, as well as of the Fijian administration's adversarial stance towards the governments of Australia and New Zealand.

  POLICY TRENDS: Relief and reconstruction efforts following Cyclone Evan will remain a priority for the government. The tropical storm caused widespread damage to agriculture and infrastructure on the island of Upolu, which was also badly affected by the tsunami that struck Samoa in 2009. The plan initiated after the tsunami to repair damage, which was due to end in 2013, is likely to have to be extended to take account of the fresh devastation caused by the cyclone. Samoa formally joined the World Trade Organisation (WTO) in May 2012. This may eventually spur the country's businesses to provide better products and services, but in 2013-14 the country's merchandise trade deficit is expected to widen worryingly as foreign goods enjoy better access to the local market. Negotiations will continue over the country's participation in a potential free-trade agreement between the Pacific island nations, Australia and New Zealand, known as the Pacific Agreement on Closer Economic Relations-Plus. The government has adopted an expansionary fiscal policy stance in recent years, owing to weak domestic economic growth and the need to fund aid and reconstruction efforts, and has run up substantial fiscal deficits as a result. According to the budget for fiscal year 2012/13 (July-June), presented to parliament by the finance minister, Faumuina Liuga, in May 2012, expenditure is expected to rise by 4% to Tala774.3m (US$340m), equivalent to around 50% of GDP. Meanwhile, revenue (including external grants) is expected to total Tala670.5m, representing a rise of 7.6%. The government is forecasting a budget deficit equivalent to 6.1% of GDP in 2012/13, compared with 7.3% in 2011/12. In the medium-term, the government has set itself the target of reducing its deficit to less than 3.5% of GDP, suggesting that fiscal policy will become less accommodative in 2013-14. However, the authorities may struggle to meet their target owing to the need to boost spending to cover the costs of post-cyclone reconstruction. The government's purchase in November 2012 of a previously loss-making shipping line, Pacific Forum, may place unwelcome additional strain on the public finances. In 2013-14 the Samoan government will rely heavily on financial support and the provision of personnel and supplies by foreign donors and neighbouring countries, particularly New Zealand and Australia. The government expects external grants to fall to Tala121m a year in 2013/14-2014/15, from Tala153m in 2012/13. In addition, concessionary loans from the Asian Development Bank and other bilateral and multilateral donors will be forthcoming. However, this will serve to increase Samoa's dependence on foreign aid and will lead to a substantial rise in public debt. The 2012/13 budget projects that public external debt will continue to climb, having already passed the government's self-imposed ceiling of 50% of GDP.

  ECONOMIC GROWTH: Real GDP is estimated to have expanded by 2.1% in 2012, up from modest growth of 1.4% in 2011. Year-on-year economic growth accelerated to 2% in the second quarter of 2012, from 0.9% in January-March, suggesting that the local economy has regained some momentum. Although agricultural and industrial output remains weak, a rise in tourist numbers-visitor arrivals were up by 20.1% year on year in the second quarter of the year-has boosted the performance of the tertiary sector, which accounts for nearly two-thirds of GDP. The rebuilding and reconstruction work that has taken place to reinstate capital stock destroyed by the 2009 tsunami should support economic growth in 2013-14. We expect the output of Samoa's secondary sector to expand by 3.5% a year on average in 2013-14, following an estimated contraction of 0.2% in 2011-12. The outlook for the wider economy will depend to a great extent on how much destruction was caused by Cyclone Evan-something that is as yet unclear. Assuming that storm damage to Samoa's agricultural sector and tourist facilities, although severe, had a less devastating impact overall than the tsunami, we expect real GDP to grow by 1.7% in 2013. The improving global economic outlook, in addition to a likely rebound in visitor numbers, will cause economic growth to accelerate to 2.7% in 2014.

  EXTERNAL ACCOUNT: The merchandise trade deficit is forecast to widen further in 2013-14, reflecting persistently high reconstruction-related imports and uneven demand in overseas markets, as well as an influx in foreign goods as a result of Samoa's WTO membership. The decline in tourism receipts caused by the 2009 tsunami appeared to be over by mid-2012, when tourist arrivals returned to strong growth, but the impact of Cyclone Evan has damaged prospects for a bounce in services exports in 2013. Services exports, led by tourism, are expected to reach healthier levels in 2014. The transfers account will record surpluses in 2013-14, supported by inflows of foreign aid and remittances. Although private remittances from overseas Samoans should remain healthy in 2013-14, owing to the forecast acceleration in economic growth in New Zealand (the main location of Samoan expatriates), the Pacific island country's reliance on remittances to support its balance of payments constitutes a potential source of vulnerability.

  January 16, 2013

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Country Briefing

Land area

2,831 sq km

Population

180,741 (2006 census); 180,000 (2011 IMF estimate)

Major islands

Upolu and Savai'i

Capital

Apia, on Upolu (population 37,708 at 2006 census)

Climate

Tropical; temperature range: 24-30°C

Weather in Apia (altitude 2 metres)

Average rainfall is 3,000 mm per year. There is a dry season from May to August and a rainy season from November to April

Languages

English and Samoan (official languages)

Measures

Metric

Currency

Tala. Average exchange rate in 2011: Tala2.32:US$1

Fiscal year

July 1st-June 30th

Time

12 hours ahead of GMT

Public holidays

January 1st-2nd (New Year); March 29th-April 1st (Easter); May 13th (Mother's Day); June 1st (Independence Day); August 12th (Father's Day); October 14th (White Monday); December 25th (Christmas Day); December 26th (Boxing Day)

January 15, 2013