development

Constraints to development

Good management, incentives and diversification are the buzz words for Western Samoa’s recovery and growth

By Norman Douglas

GROWTH potential in Western Samoa lies in the more intensive exploitation of existing resources such as agriculture, tourism and small industry. But to realise this potential a number of current constraints have to be overcome and a favourable macro economic climate must be developed.

These are some of the views expressed

in a report on Western Samoa’s prospects for recovery and growth.

The report, published under the aus pices of the Australian International Development Assistance Bureau (AIDAB) in their series International Development Issues , identifies the con straints as both external and domestic.

Among the former are falling or fluctu

ating commodity prices; among the latter

government policies that discourage in itiative in the private sector. On top of

these are the constraints of natural disasters, such as the cyclones which have affected Samoa in recent years. It is a major task, says the report, for the government to ensure that economic recovery continues after the reversals caused by the cyclones, particularly Ofa in early 1990.

Although agriculture (including

subsistence) was still the backbone of the economy, accounting for over 50 per cent of GDP and 60 per cent of the labour force, merchandise exports had de creased significantly in recent years, with falling prices and volume in most traditional exports, such as copra, coco nut oil and cocoa. Part of the decline in output can be blamed on the cyclones, but in the last decade a generally downward trend in agricultural exports had been evident, although there had been substantial consumption of some products, such as bananas and cocoa, by the local market. Poor management in the large, government-owned Western Samoa Trust Estates Corporation was seen as one factor in the decline of some agricultural enterprises. The report rec ommends a degree of privatisation of the trust estates to make additional land available to the private sector.

The high degree of remittances from Samoans overseas also affected agricul ture, tending to lessen the incentive to

produce.

Manufacturing has some potential for

achieving growth and diversification.

The success of the Japanese-owned wire harness manufacturer Yazaki Samoa is already well-known, but scope exists for the processing of coconut by-products, tropical fruit and fish. The pool of low cost and unemployed labour provides some basis for further small-scale indus trialisation.

Tourism and related activities have

much growth potential, according to the

report, although the servicing of tourism requires a high import content, and many Samoans still express reservations about an increase in tourism, fearing the erosion of their culture. The ability of the four-year old finance center to contribute substantially to economic growth is doubtful because of the uncertainty of the international economic climate.

In the short and medium terms, the report says, much depends on the performance of agriculture and the movements in international commodity

prices. Overall productivity, however,

may be subject to yet another of Samoa’s constraints, the high rate of emigration.