Countries and Regions

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p. 3 of 5 BACK | NEXT I. Country Strategy II. Current Development Trends and Issues III. Implementation of the Country Strategy and Program IV. Portfolio Management Issues V. Country Performance and Assistance Levels

Country Strategy and Program Update 2005-2006: Samoa

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III. Implementation of the Country Strategy and Program

A. Progress in Poverty Reduction

18. About 20% of Samoan households have incomes below the basic needs poverty line, and are therefore experiencing some degree of financial hardship. There are significant gaps between the two major islands of Upolu and Savai'i in terms of economic growth and human development indicators, with Savai'i lagging significantly behind. The greater Apia urban area, containing around 40% of the population, is estimated to generate 70% of the national income.

19. Samoa and ADB signed in August 2003 a poverty partnership agreement. Also in 2003, the publication of ADB's 2002 participatory poverty survey (footnote 2), and assistance to the Government in calculating poverty lines from the results of the 2002 Household Income and Expenditure Survey contributed to the public discussion and acknowledgement of poverty as a critical issue in Samoa. The Government has increasingly been recognizing the extent of poverty, and sees the need for a greater effort in redressing widening imbalances between the income levels of people in urban and rural areas, as emphasized by the SDS 2002-2004 theme "opportunities for all". There are indications that, under SDS 2005-2007, the Government will put increased emphasis on the relationship between the traditional Samoan value system and effective development policies. ADB's country strategy and program fully supports the Government's efforts to improve the livelihood of the Samoan people by providing assistance in support of delivery and quality of basic social services and private sector development. ADB will assist in monitoring progress.

B. Progress in the Country Strategy and Program Focus Areas

1. Education

20. The Government has maintained its strong commitment to education. Substantial progress has been made toward achieving the education goals. Since adoption of the education policies and strategies for 1995-2005, and as measured against the education sector priorities as stated in SDS 2002-2004, considerable progress has been made in terms of (i) lifting teacher training standards and the quality of teachers; (ii) improving the curriculum and teaching materials for primary and secondary education; (iii) improving educational facilities; and (iv) institutional strengthening of the Ministry of Education, Sports and Culture. However, the reform agenda remains long and major issues are still to be addressed, including access to quality schooling in disadvantaged areas, low levels of functional literacy and numeracy among high-school leavers, high repetition and dropout rates, low secondary school completion rates, short supply of well-trained teachers with adequate skills, relevance of the curriculum, and school supervision. Future interventions need to be geared toward qualifying students sufficiently well to respond to the private sector opportunities and demand generated by the ongoing economic and public sector reforms.

21. ADB is assisting the Government to improve the access to, and quality of, primary and secondary education through rehabilitation, expansion, and upgrading of schools. Such upgrading has been vital in implementing a school zoning arrangement, in the process facilitating equitable access to education. The proposed Education Sector Project II is likely to focus more on improving the quality and efficiency of schooling, on strengthening management systems, and on educational access on the outer islands and in other disadvantaged areas. ADB is also considering support to the Government in the formulation of the new Education Policy and Strategic Plan 2006-2014. Likewise, ADB is helping improve the quality of education outcomes by strengthening teacher competence training programs through provision of information and communications technology to rural schools and creating community access facilities.⁴

22. Given the number of development partners engaged in the sector, a government-led multi-partner approach will be vital to systematically address emerging issues in education in a long-term strategic approach, and to achieve increased effectiveness of partner assistance. The ongoing review of SDS 2002-2004, the formulation of SDS 2005-2007, the formulation of the new Education Policy and Strategic Plan 2006-2014, and ADB's project preparatory technical assistance⁵ for the proposed Education Sector Project II provide an excellent opportunity, for the Government and funding agencies alike, to establish a framework to consolidate achievements, and facilitate continued long-term progress in the sector.

2. Basic Infrastructure

23. Water and Sanitation. With ADB assistance,⁶ the Government has developed and begun implementation of significant improvements in urban management planning. Through the recently approved Sanitation and Drainage project,⁷ ADB is supporting the Government to improve the environment and public health of Apia through assistance in improving urban infrastructure for drainage and sanitation, as well as improving urban management capacity. The project objectives include improved public health; better environmental quality, and surface and groundwater quality; reduced frequency of flooding in specific low-lying areas of Apia; and the promotion of private sector participation in provision of urban services through outsourcing various utility services to the private sector. As determined by the project planning studies, there is a strong case for expanding the sanitation and drainage systems to include other critical areas of Apia. ADB may, therefore, consider a second-phase Sanitation and Drainage II Project in 2008 (standby 2007).

24. Energy Sector. Progress has been made in terms of achieving the priorities set for the power sector in SDS 2002-2004. The rural electrification program is now completed. The financial performance of the Electric Power Corporation (EPC) in 2003 was positive for the first time in 10 years. This is mainly attributed to the successful measure of eliminating prompt-payment discounts, along with the implementation of pro-poor "lifeline rates". The challenge for the Government and EPC, however, is to sustain EPC's performance over the long term. ADB has been assisting EPC in developing tools, mechanisms, and benchmarks for improving its management and operation efficiency. A power sector road map for the strategic, long-term development of the sector has been developed, with the key tasks to achieve the corporate goals related to financial performance, technical performance, customer service performance, introduction of private sector participation, and reporting. The road map is expected to be approved and implementation initiated in 2004. ADB will be monitoring developments closely.

25. ADB assistance is ongoing for investigating the viability of the Savai'i Renewable Energy project,⁸ completing Afulilo dam augmentation, and upgrading the control center at Tanugamanono.⁹ ADB is also supporting, through regional technical assistance,¹⁰ the Government's efforts to develop alternative renewable energy options.

3. Private Sector Development

26. Macroeconomic and fiscal stability, liberalized financial markets, public service reforms, reduced government presence in commercial areas, and improved infrastructure have significantly improved the business environment. With ADB assistance, the Government has made good progress in improving micro- and small enterprises' access to credit, business training, and advisory services.¹¹ Likewise, ADB has been helping the Government to address legal impediments to the economic use of customary land, improve debt-recovery mechanisms, and facilitate secured transactions.¹² Ongoing support to infrastructure development in the energy and water and sanitation sectors is expected to help improve the physical business environment.

27. ADB TA in support of SOE reforms and privatization has substantially contributed to the reform momentum created by the enactment of the 2001 Public Bodies Act.¹³ Achievements include the introduction of corporate planning disciplines in SOEs; implementation of a performance reporting system for all SOEs; adoption of accounting policies based on International Accounting Standards; preparation of selected SOEs and shareholdings for privatization; and raising of general public awareness concerning SOE reform, privatization, and SOE corporate governance. However, there is considerable scope to improve the performance of the Government's SOE portfolio by (i) subjecting major public development projects, especially those associated with SOEs, to cost-benefit analysis; (ii) adopting a cost-cutting strategy in SOEs, including outsourcing of non-core activities to the private sector; and (iii) progressively working toward innovative solutions for a sustainable turnaround of Polynesian Airlines.

28. Samoa has "graduated" to a stage where the private sector development reform and performance benchmarks should reach beyond regional borders, and be measured against international best practice.¹⁴ Ongoing reforms need to be completed, their impact assessed and, where necessary, additional reform measures pursued. Continued SOE reforms and increased private sector participation and competition, the legal business environment, a secured transactions framework, and the long-pending establishment of the Law Commission-with its priority task of identifying and launching adequate reforms to facilitate the economic and productive uses of customary land-are prerequisites toward a more conducive business environment. Moreover, there is room for improvement of public-private dialogue. The Government should give the private sector a more central role in policy formulation, with a view to enhancing the former's understanding of business needs and incentive systems, and facilitating public-private partnerships.

C. Highlights in Coordination of External Funding and Partnership Arrangements

29. The Government has continued to optimize the use of development partners' resources through the effective and efficient coordination of funding agency programs. The forthcoming SDS 2005-2007 and the ongoing introduction of sector plans are providing the opportunity to further enhance funding agency coordination and introduce multi-agency approaches in selected sectors.

30. ADB's close coordination and cooperation with other funding agencies has been vital in implementing ongoing activities and developing ADB's proposed strategy and program. Ongoing cooperation and coordination with Australia, New Zealand, United Nations Development Programme, and UNESCO in the education sector is expected to be further deepened in the context of the development of the new Education Policy and Strategic Plan 2006-2014, and the preparation of the proposed Education Sector Project II. Likewise, ADB has been working closely with the European Union and the Australian Agency for International Development in the water and sanitation sector, and with the New Zealand Agency for International Development in the area of micro- and small business support, as well as corporate governance.

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