Economy recovers

on paper

Western Samoa’s Prime Minister Tofilau Eti announced in parlia ment in January that the coun try’s credibility among foreign lenders has been assured. This was because lenders, including the International Monetary Fund (IMF), and the World Bank, were now convinced that the government was again paying its way.

And Financial Secretary Alis tair Hutchison, often referred to as “the most powerful man in government, ’ ’ quickly agreed.

He told PIM: “In economic terms, we (Western Samoa) are now in reasonable shape. There will be stabilisation, but it will take several months.’’

Tofilau attributed the econom ic recovery to his government’s tough policies imposed last year which increased earnings from taxes, government charges and reduced foreign exchange spend ing by restrictions on imports.

He said that in the last nine months of 1983, the government was able to reduce its foreign debt of SWSI3 million to $5 million, made a record foreign exchange saving of $10.2 million ($8 million in 1977), cleared its bank overdraft of $10.2 million, and secured a bank account of $2.2 million in credit.

The government’s perform ance is undoubtedly impressive except that the recovery is on paper only. The cost of living is still climbing and the man in the street is still being hard-hit.

Meantime, the government has yet to spell out where it would be getting the $lO million it needs for the airport extension, and the “millions more’’ for the proposed national university.

In these times of funds scarci ty, the government is being bit terly assailed by members of the public and the opposition party of former Prime Minister Tupuo la Efi for embarking on these ambitious projects.

To make matters still more difficult to understand, the gov ernment went ahead and awarded the contract for the airport exten-

sion to its construction company.

Special Projects Development Corporation (SPDC), despite the fact that its bid was not the lowest.

SPDC later dropped its asking price to $3.6 million, but Tupuo la charged that the public “will again be made responsible for the balance.’’ Hutchison, who left the government in February after 16 years service, was also unhap py about the decision.

When Tofilau announced that the economy was recovering, his government was tabling five tax bills in parliament. The bills in clude a new tax called an “excise tax. ’’ They aimed at raising taxes further and reducing incentives

for manufacturing.

The cost of drafting these bills by a New Zealand lawyer was about $96,000, an amount not provided for in the 1984 budget.

The cost of electricity will also be raised from 23 cents a unit to 33 cents.

Still, Tofilau was insistent that his tough policies should be pass ed into law. He is also extremely confident that he will be returned to power in the general elections due in February next year. He told Tupuola in parliament that if both men were to resign from parliament on the spot, only he, Tofilau, would be re-elected.

Sana Malifa.

Samoa Report

Sano Malifa on Western Samoa