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Annual Report 2001

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Samoa

Economic performance

Real GDP in Samoa is estimated to have grown by 10.0% in 2001 despite the global economic slowdown. Construction, and transport and communications led the growth. However, annual average inflation increased from 0.9% in 2000 to 4.0% in 2001. The overall budget deficit increased from 0.7% of GDP in FY2000 (ending 30 June) to 2.3% of GDP in FY2001, reflecting a rise in development expenditure and budgetary support to Polynesian Airlines. In 2001, exports and imports grew by about 20% and 31%, respectively. The level of foreign exchange reserves declined from 6.4 to 4.8 months of import cover during the same period. External debt declined to about 60.2% of GDP at the end of FY2001. In 2001, the effective exchange rate of the tala remained generally stable in nominal and real terms. The central bank considered tightening money supply but deferred this as the economy weakened after 11 September. Reforms continued, which included the approval of the Public Finance Management Act 2001 and the Companies Act 2001. A development strategy for Samoa for 2002–2004 emphasizes the importance of distributing the benefits of development among all communities. The development of health, education, traditional values, and a competitive economy are the cornerstones of this strategy.

ADB operations

Operational strategy: ADB’s operational approach in Samoa emphasizes promoting economic growth and equitable social development by enhancing capacity for sound economic management, and supporting financial reform and privatization of state-owned enterprises (SOEs); improving living standards and reducing income disparity through improved equity and access to essential services, particularly education; and supporting sound policy frameworks and physical infrastructure Post-Conflict Emergency Rehabilitation loan, postpone the country programming exercise, and finish any minor activities under ongoing or almost completed technical assistance projects to facilitate project continuity and closure. The strategy will be reviewed in early 2002.

Policy dialogue: ADB has helped the Government rehabilitate basic infrastructure. It has also highlighted the need to prioritize issues such as law and order, good governance, and sound public financial management. Moreover, ADB has been concerned about the Government’s delivery of basic public services in light of the political and socioeconomic difficulties the country is facing. Overall, the temporary suspension of country programming has limited effective dialogue with the Government on a medium-term assistance program.

Loans and technical assistance: No loans or technical assistance were approved in 2001.

Project implementation: Since joining ADB in 1973, Solomon Islands has received 16 loans, of which 2 were active at the end of 2001. Contract awards totaled $1.1 million, bringing the cumulative figure to $54.8 million. The contract awards ratio was 10.7%, lower than the ADB-wide average of 14.8%. Disbursements during the year totaled $10,000, bringing cumulative disbursements to $54.1 million. The disbursement ratio was 0.1%, lower than the ADB-wide average of 20.5%.

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