Business and Development

Western Samoa moves towards stronger trade ties

From FELISE VA’A in Apia

After months of seeming lethargy, Samoa’s Mata’afa government has some big things up its sleeve.

And about time. The general elections are only about 17 months away and the government will have to do something to earn the confi dence of the next new batch of parliamentarians, expected, if Samoan politics run true to form, to number about half the strength of the Fono.

Indications that the government is ip to something came from Mata’afa’s nost outspoken minister, Mr Sam Saili, Minister of Finance, Tourism md Economic Development.

Just returned from the annual ?oard meeting of the Asian Develop nent Bank, Saili said the govern nent was trying to attract a fish can ling company to Western Samoa.

It is not sure which company is he target but it is known for certain hat Saili had had a close look at he fish canning operations of Jumblebee Co in Honolulu. He was nore than impressed.

“Bumblebee is now using a new echnique which eliminates the smell characteristic of fish canning actories,” said the minister.

However, the proposal to attract uch operations to Western Samoa s not new, since it was started by the >revious Tamasese government. Then, he discussions had been with the faiwanese —a fact which lowered the •restige of the Tamasese government, s Red China was then in the scendancy.

The present government’s dis ussions on the question of fish can aries seem to be mainly with the

American companies.

Another notable announcement ''hich Saili made was the possibility i the near future of a trade agree ment with New Zealand.

On his way back from the ADB meeting, Saili had top-level dis ussions on this matter with the NZ ministers of finance, industries and ommerce, overseas trade and ustoms.

Judging from Saili’s statements, the

NZ ministers seemed to have wel comed the idea of a trade agreement between the two countries. And why not? At the moment, New Zealand is Western Samoa’s number one trading partner.

A trade agreement with New Zealand had always been one of Saili’s favourite ideas, even before he entered parliament. Why he didn’t try to bring this about much sooner is a surprise. Hand in hand with the trade agreement will be a reform of the tariff system.

The present system, giving pre ferential treatment to other members of the Commonwealth, will be changed to a single tariff system whereby all countries will get the same tariff, with the exception of those countries with which Western Samoa has a trade agreement.

“The single tariff system is a fairer system,” said Saili. “Under it every body will be equal, except that we will have to give preference to those countries which give us certain ad vantages under a trade agreement.”

He said it wasn’t fair to give pre ference to countries like Singapore and Hong Kong which did not import anything from Western Samoa.

But the trade agreement and single tariff ideas, like the fish cannery, still belong to the future.

The trade agreement would help to solve to a large extent Western Samoa’s present problems of finding suitable markets for its agricultural produce, especially bananas. A fixed banana quota from New Zealand would enable Samoans to plan pro duction.

The tariff system will enable Western Samoa to obtain the maxi mum trade deals with its partners.

The fish cannery will certainly help Western Samoa’s exports and as well create a lot of jobs for Samoans.

It seems that with the general elections approaching, the govern ment party, under pressure from in side and outside, is gradually revers ing its tough policy on economic controls.

With half its term gone it was not before time. In the first 18 months of its life, the Mata’afa government fell short of the country’s expecta tions and looked to have few chances of being returned to power in the general elections at the end of next year. Mata’afa was not showing the high leadership qualities that he demonstrated during his first two terms as Prime Minister yet, last year, the country turned to him be cause of these same qualities.

His government has been blamed for one of Samoa’s worst recessions as a result of stringent economic policies adopted soon after it took over from the Tamasese government.

As part of those policies it, in effect, abolished the bed-tax of Si per night on hotel guests by reducing the

rate to zero to get round the legisla tion which set it up in the first place.

A lot of pressure to remove the tax was put on ministers by those interest ed in the tourist industry but the result had been a loss of revenue to the government which is already hard-pressed financially.

The government recently announced that it intends to introduce a new tax on tourists, beginning January 1975, if the necessary legislation is approved by parliament.

The new 10 per cent surtax on ac counts is expected to rake in more from tourists than the old bed-tax but apparently government thinking now is that as it is spending a lot of money on tourist development, it is up to the visitor to contribute some of it. (See comment p 47.) Another unpopular measure was the reduction in merchants’ import allocations that kept supplies of im ported foodstuffs in short supply for most of 1973, This was coupled with Price Control Board action that pegged retail prices of some goods below landed cost. This was changed towards the end of 1973 and there have been fewer complaints from merchants since.

Government instructions to the Bank of Western Samoa and other lending institutions resulted in a credit squeeze. It has been exceedingly

difficult to gets loans for development and building although there is obviously a lot of money lying idle in the country.

The government floated its National Development Loan of $1 million in May, increasing interest rates and allowing investors to pay on the installment plan—2o per cent now and the rest by November.

The money will go on such things as urban and east coast roads and to provide capital for the Development Bank which makes loans for primary producers.

The government has cancelled (the official term is “suspended”) the Asian Development Bank loan which was to be spent on improvements to the Apia water supply which, accord ing to some accounts, would not be regarded fit to swim in, much less drink, in places like New Zea land. Recently the Deputy Director of Works, Mr Keith Mawson, said in an address to Rotarians that he had seen small, transparent fish come out of local taps—but he denied ever having seen eels.

Mr Saili said that the ADB loan was suspended while the government looked around to see if any money were available. What it really means is that the government has already decided to use some NZ aid money for the water supply.