Regions and Countries

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p. 43 of 47 BACK | NEXT Developing Asia and the Pacific The global economy Newly industrialized economies Central Asian republics, Azerbaijan and Mongolia People’s Republic of China Southeast Asia South Asia The Pacific Cook Islands Fiji Islands Kiribati Marshall Islands Federated States of Micronesia Nauru Papua New Guinea Samoa Solomon Islands Tonga Tuvalu Vanuatu

Samoa

Economic performance

The economy is estimated to have grown by more than 7.0 percent in 2000, dominated by construction, commerce, and hotels and restaurants. The overall level of local food supplies and inflows of remittances also increased. Dramatic growth in the monetized fishing sector in recent years was a major development. Inflation was contained at 0.5 percent in 2000, about the same level as in the corresponding period in 1999. Foreign exchange reserves in September 2000 equaled over six months of import cover. The overall balance of payments remained healthy in 2000, mainly aided by capital inflows.

Domestic policies: The FY2000 (ending 30 June) budget ended in a deficit of 0.6 percent of GDP, the first deficit since 1994. In mid-2000, external government debt was around 65 percent of GDP. The debt service cost in 2000 was around 7 percent of exports of goods and services. The money supply was estimated to be 11.4 percent higher than the previous year, reflecting the growing economy. The banking system remained strong in terms of capitalization and continued to be profitable. However, the central bank kept a close watch on monetary developments to ensure that inflationary pressures were kept under control. The Government proposed consolidating measures taken in recent years: tax and tariff reforms, financial sector reforms, and privatization and public enterprise reform initiatives. Further regulation, infrastructure, and taxation are needed for the rapid growth of the export fishing sector.

ADB operations

Operational strategy: ADB’s operational strategy for Samoa supports the Government’s reform measures, which are aimed at making the economy more private enterprise-based and competitively structured. ADB will continue to support public sector reform and financial sector liberalization, private sector-led growth, corporatization and privatization of state-owned enterprises, improved management of power and infrastructure facilities, education, and skills development.

Policy dialogue: Policy dialogue continued on strengthening the Government’s capacity in macroeconomic management and policy formulation. ADB supported policy initiatives to promote the development of an economic environment conducive to business activities.

Loans and technical assistance: In 2000, ADB approved two loans totaling $10.5 million for the education sector and for small business development. ADB also approved three advisory technical assistance grants totaling $1.8 million. ADB also approved an equity investment in a venture capital fund.

Project implementation: Since joining ADB in 1966, Samoa has received 28 loans, of which 3 were active at the end of 2000. Contract awards totaled $60,000, bringing the cumulative figure to $94.5 million. The contract award ratio was almost 1 percent, lower than the ADB-wide average of 21 percent. Disbursements during the year totaled $260,000, bringing cumulative disbursements to $90.9 million. The disbursement ratio was 2.4 percent, lower than the ADB-wide average of 20.5 percent. The low ratios are attributed to a delay in the release of the second tranche of the Financial Sector Program loan and effectivity of a large loan close to the end of 2000.

Two loans—Education Sector Program and Financial Sector Program—were ongoing in 2000 and were classified as satisfactory in terms of implementation progress and achieving their development objectives. The loan for small business development was awaiting effectivity. The response of the financial sector to the liberalization measures was positive. Release of the second tranche was delayed because two second tranche conditions had not been met.

   

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