Samoans Don't Like Tight Belts

From FELISE VA’A in Apia

Last year, Western Samoa was faced with a balance of payments deficit of SWS 1.5 million, the first since 1967. Although the amount itself is peanuts compared with the deficits of other countries, the pre sent Minister of Finance, Sam Saili, treated it almost as a matter of dis astrous proportions and one that had to be solved immediately.

In his budget speech in parliament, the minister said the deficit was due to a number of causes, the most important of which was “a serious drop in receipts from agricultural exports, which in 1972 totalled only SWS3.3 million, compared with SWS4.6 million in 1971”.

The other causes mentioned were the “rapid expansion of credit avai lability, government expenditure and some considerable increase in the importation of items which, for a developing country, can only be de scribed as luxuries”.

So Saili wasted no time in im plementing new policies designed to cure the country’s balance of pay ments position.

He said the government saw the rehabilitation of the banana industry as the quickest and best answer to the problem of reduced receipts from agricultural exports. The Agriculture Department, therefore;, was giving primary attention to achieving this end.

Additionally, Saili saw fit to re duce the level of credit availability; the National Provident Fund and the Public Trustee were both in structed to stop all loans, and the Bank of Western Samoa as well as other credit institutions were asked to co-operate and to limit the amount of their loans to the public as much as possible.

In the government sector, there was a mad scramble to save money and scores of employees, in the Public Works Department, for ex ample, were laid off. Saili also an nounced that the government would limit its overseas borrowing and try to save by cutting down on mini sterial travel.

But hardest hit of all was the com mercial sector whose import allo cations were drastically cut down to 90 per cent of the 1972 level.

Within six months of the new policies, the effects were beginning to be felt.

The standard of living either stood still or deteriorated because of lack of development capital, made available

mostly through loans from the credit institutions.

In the commercial sector, the effects were most noticeable. For there was a desperate shortage of goods of all sorts, in particular freezer goods canned fish, corned beef, and cigarettes. The merchants simply explained that the shortages were caused through an insufficient allocation for more goods. Indeed by June of this year, it is believed one major firm in Apia had already run out of its allocation!

Thus, though the minister may have partly succeeded in stemming the progress of the national deficit, he failed dismally in maintaining or improving the people’s standard of living, which after all is the primary concern of government, Indeed,, the minister could be questioned whether the deficit was really as bad as it looked; whether instead of repressive measures he could have resorted to a massive build-up of industries with export potential—but obviously this is the

aarder course. Of course the minister is talking about his “duty free zone” but to all appearances, this seems to be a long-term project if it is ever implemented, while what the country needs now is an additional

short-term industrialisation project.

Some local economists think that the minister’s policies will have the effect of putting the country’s deve lopment back by five to 10 years.

One thing is fairly clear now: the riinister’s economic policies are not Dopular with the masses or with the nerchants.

The rising expectations of the samoan people will not be put back lot even by Saili, whose political : uture now seems uncertain.