Tuesday, June 12, 2012

Samoa Celebrates 50 Years of Independence and Development

ADB: Samoa, Building a More Resilient Economy
IMF: Enhancing Resilience to Shocks and Fostering Inclusive Growth in the Pacific Islands
New Zealand Herald: Samoa's Statesman
Radio Australia: China a Better Pacific Friend than US: Samoan PM
The University of Waikato: Samoa and New Zealand’s Special Relationship: More than a Neighbour?
U.S. State Dept.: Samoa Independence Day

On June 1, 2012, Samoa celebrated 50 years of independence from New Zealand. A group of islands halfway between New Zealand and Hawaii in the South Pacific, Samoa was the first modern Pacific country to receive independence. The first half-century of Samoan independence is a prime example of the challenges faced by island nations in the Pacific region and has been marked by improved economic growth and increased stabilization.

As Samoa transitioned to independence during the 1960s and 1970s, it focused on establishing a stable government and economy. To assist in Samoa’s transition to independence, New Zealand maintained control over Samoa’s foreign affairs under the Samoa-New Zealand Treaty of Friendship until Samoa determined it was ready to handle its own foreign affairs. At first, the Samoan government struggled with internal unity among its own officials, but this changed with the introduction of political parties, which encouraged government officials to focus on the unified goals of the party rather than their own individual interests. Samoa also expanded its connections with the global community very early on in its independence by joining the Asian Development Bank, the International Monetary Fund, the World Bank, the Lome Convention (an international trade and aid agreement between the European Community and African, Caribbean, and Pacific countries), and the United Nations. Becoming a member of these organizations allowed Samoan to receive development aid, enabling the country to utilize such funds in critical areas such as infrastructure and education.

Currently, Samoa’s economy centers largely on tourism, remittances—sums of money sent to Samoa by the country’s nationals who are living and working abroad— and an increased amount of aid from China. Tourism and remittances together make up roughly half of Samoa’s annual gross domestic product (GDP). In addition, Samoa has recently seen an increase in aid from China. The government of Samoa has sought out aid from China because the Chinese have proven to be more flexible regarding project plans and more forgiving regarding loan repayment than other sources of aid, including Australia, New Zealand, and the United States.

While Samoa has achieved a level of stability, the recent global financial crisis demonstrates that the country needs to develop further. The financial crisis negatively affected all three of Samoa’s main sources of income (tourism, remittances, and aid) because foreigners, Samoans working abroad, and foreign governments all saw their discretionary income—income remaining after necessary expenses are paid—reduced. To reduce the negative effects of the financial crisis, the IMF has suggested that Samoa and other Pacific countries increase diversification of domestic industries and increase investment in education. Regarding diversification, the IMF suggests creating a set of laws and regulations that make domestic industries more conducive to foreign investment. In addition, the IMF suggests improving access to credit for the domestic private sector to encourage local business development. Concerning education, Samoa has already placed a high priority on educational achievement. For instance, the government spends roughly a third of its budget on education. As a result, Samoa has seen signs of success in a near 99% literacy rate and gender parity in primary education. However, secondary education still needs improvement as there is a 40% drop-out rate during the last two years of high school.

With 50 years of independence, Samoa has much to celebrate and many opportunities to ensure a bright future of continued economic growth.