An interview with Tuilaepa Sailele Malielegaoi, Deputy Prime Minister and Minister of Finance

'Economic future in tourism end manufacturing'

The Courier visited Western Samoa at the end of June while the country was hosting the ACP-EU Council of Ministers meeting. At the time, veteran Prime Minister, Tofilau Eti Alesana, was recovering from an operation, and his duties were being carried out by his deputy, Tuilaepa Sailele Malielegaoi, who is also the Minister of Finance. Despite a hectic schedule, the Deputy Prime Minister kindly managed to find a slot for a keynote interview with The Courier.

· There is growing evidence of a new economic dynamism in this island nation, which has managed to find its feet remarkably speedily after the destruction wrought by cyclones in 1989 and 1990. With this in mind, we began by asking the Minister about the economic prospects for the country ?

-I think they are excellent. Our country suffered a major catastrophe as a result of the cyclones, coming, as they did, in two successive years. There was major damage to our infrastructure and forestry resources- coconuts and cocoa. At the time, we estimated the bill at more than $600m. But the rehabilitation of the infrastructure went ahead quickly, thanks to the major support provided by bodies like the World Bank, the Asian Development Bank, and of course, the European Union, not to mention the bilateral donor countries who answered our call for help. So in some ways, it was a blessing in disguise. We suffered badly, but with the assistance that came, we have been able to improve our roads and electricity supply, and the protection of our foreshore. It also encouraged us to embark on replanting to replace the trees-mainly cocoa and coconut -that had been destroyed. Last year, for the first time since the cyclones, our copra exports came back in strength. We have, at last, started to approach the pre-cyclone export levels.

· What are likely to be the key sectors for future economic activity ?

-We believe that the economic future of our country now lies more in tourism and in manufacturing industries. Dealing with the latter first, we have already succeeded in attracting some industries. The major investment so-far has come from Yazaki, a Japanese company that produces wire harnessing systems (electrical components) for vehicles. This employs almost 3000 people in Western Samoa. In fact, the company set up here before the cyclones and it did not take long for us to see the benefits. The value added equivalent provided by just that one plant is roughly equivalent to our total agricultural exports for last year. So you can see the importance of manufacturing industry for us. We have provided very generous incentives and have also allocated sufficient government land to provide space for factories.

The other industry which is now in the forefront, in terms of foreign exchange earnings, is tourism. We now earn four times more from this sector than we do from agriculture-and agriculture is supposed to be the mainstay of our economy.

Of course, we mustn't reduce the priority that we give to agriculture. It is one area where we have the resources. More specifically, I think that we have great potential for beef production. If we should have another cyclone, the trees will be damaged but cattle should not be affected. So I think we should look more towards beef production and other forms of agricultural diversification. We do have some good commercial farming in place at the moment, but it is not enough. We need to do more.

· What about the chocolate industry ? You have traditionally grown cocoa but you now also have a factory to process the raw material right up to the end product.

-This is a direct result of our drive to promote more manufacturing - whether it is export-oriented or geared towards import substitution. The chocolate venture is a new one and I think there are good, prospects here as well.

An important point is that we are moving back into growing the fine flavour variety of cocoa here. We used to be one of the 14 producers of fine flavoured cocoa in the world, and we got premium prices for it. But somehow, over the years, we switched to producing inferior quality bulk cocoa. We regretted doing that and are now switching back to the higher quality variety-which is just coming back into production following the cyclones. So here we have another potential area for exports. On the other hand, taro which used to be our major export prior to 1993 is facing difficulties. It is affected by a disease, the taro blight, which seems to be uncontrollable.

· Thinking in particular of the impact of tourism, are you concerned that an influx of foreign visitors might damage Western Samoa's unique and very special culture ? I see, for example, that you now have a 'McDonalds' restaurant in the centre of Apia.

- No. I am not really concerned. In 1992, we set up our own tourism festival. This takes place in the first week of September and is quite clearly intended to be a feature event with an emphasis on promoting tourism. All the activities at the festival focus on the various aspects of our culture-the arts, the dances, the preparation of food, the singing and so on. It seems to me that our drive for tourism is actually helping to revive some of the cultural aspects that would otherwise have been dvina out. So I believe there is a complementarily between culture and tourism, so long as we ensure that the relationship between the two is maintained. I think this point is backed up, if you look at the growing popularity of ecotourism nowadays. This is very much concerned with preservation-of both the environment and of local cultures.

· In international circles, Western Samoa is deemed to be a least-developed country on account of its low GDP per head figures. Yet nobody is starving here and you appear to have a very 'rich' lifestyle, even if people don't have a great deal of cash in their pockets. Do you think the international classification is a fair one ?

- I think the first point to emphasise is that a lot of the signs of development you see here are of recent origin. They date back only to 1992-93. Infrastructures have improved considerably over a very short time and this could well create a certain impression about the people's standard of living. On the other hand, it is true that our economy is not completely based on cash. And, of course, our earnings are in Tala which go a lot further here than their dollar equivalent in the United States.

· Presumably, it is to your benefit to be classified as an LDC because it gives you access to more sources of foreign funding ?

-I am happy to leave the classification to the experts. They are the ones who come and estimate our average per capita income, which is then used as the yardstick for placing a country in one or other category. I think it is ironic though, that if you go to a country like the USA, which is supposed to be very rich, you find beggars on the street. It certainly makes you wonder. Perhaps it is not really the statistical wealth of a country that is important, but its social system. And our social system here ensures that no-one goes hungry.

· That leads on rather neatly to my next question. What do you think are the main social challenges that need to be tackled here ?

-We still have quite a lot of 'service care' needs in the villages that we need to attend to. That is why we have placed the highest priority on social services over the next five years. I am talking here in particular about health, education and water supplies. There are still a lot of villages that need to have piped water brought into the home. Education-wise, we have reasonable access, but we need to improve the teaching material that is available in the classes and upgrade the general level of village schooling. We need to dissuade families from moving to the capital in the belief that they can get better education for their children here. So we still have a lot of work to do to ensure that the primary schools in the villages are upgraded. It is not simply a question of ensuring that competent teachers are available, but also as I say, providing good teaching materials and laboratory equipment for science subjects.

· All of this obviously needs to be paid for, which entails healthy government finances. You recently had a serious problem over the debts run up by Air Polynesia, and you took very stringent measures to tackle this which resulted in expenditure cuts. What do the figures look like today ?

-They are OK. We are running a budget deficit which means we have to borrow both overseas and locally, but we try to keep the deficit at a reasonable level.

· What has been the effect of introducing the Value Added Goods and Services Sales Tax (VAGST) ?

-It has helped enormously. Of course, in order to sell the idea, we had to reduce other taxes and duties. As you know, there is an international trend towards removing customs duties and shifting revenue-raising in the direction of consumption taxes. Customs levies, which are the traditional source of revenue are diminishing. So what we have done is to lay the foundation for the eventual shift in our revenue base. Also, we promised to cut income taxes even more-from 38% to 25% within two years.

· Has this measure been implemented yet ?

-No, it is due to be introduced in 1998.

· Finally, I would like to turn to a constitutional question. Western Samoa introduced universal franchise some five or six years ago, but you still have a system in which only matai (family heads) are entitled to stand as candidates in elections. Do you envisage any further changes to the system ?

-I cannot really see that we will ever change again. The Constitution stipulates that our government is based on Samoan traditions and Christian principles. When we introduced universal suffrage, we were applying something that had always been there in any case. Samoans have always taken part in the process of choosing their leaders and voting is simply another way of doing this. The only difference is that we would arrive at a decision by getting together through our village structures and talking, whereas your system involves marking a ballot. So the change was quite in accordance with our customs.

Let me say something about the way villages choose their matai. When there is a question of succession, everyone has a right to take part in the process. There is no age limit. So in that sense, you could argue that we are more advanced. And we always had female matai, even before the arrival of the Europeans.

In this respect, I believe we are quite different from Fiji and Tonga. In Tonga, the dividing line is quite clear. If you are born a noble, you remain a noble and if you are born a commoner, you will always be a commoner. It is the same in Fiji. There, you are automatically a ratu K your father was one. By contrast, here in Samoa, my son cannot automatically succeed to my title. So to become a matai, a person has to earn it, and to put his case at the family meeting which is convened to choose a successor. Usually, the person chosen is the one who displays the best leadership qualities. I think I should also point out that becoming a matai is not that difficult. If you want to be one, you inform the family and if they think you have matured sufficiently, you will generally get the position and then become eligible to be a parliamentary candidate. It is typical that when a family sees a fellow has matured, he becomes a matai.