New Report praises Samoa’s oil management policy
APIA: 21 Oct 2009 -A new economic report says Samoa’s innovative program for bulk oil purchasing, storage and distribution is enabling the country to take greater advantage of new trade opportunities and wider economic integration.
The report, Pacific Economic Survey 2009, engaging with the world says if adopted across the Pacific, the Samoan model has the potential to drive regional economic growth more broadly.
“The past year has been difficult for the economies and the people of the Pacific and Timor-Leste,” said Mark McGillivray, Chief Economist with the Australian Government’s overseas aid agency AusAID, at the launch of the survey in Tonga last week.
“Samoa has been dealt a particularly difficult blow with the recent devastating earthquake and tsunami. Previous to that it was one of a number of countries hit hard by the global recession, with substantially lower economic growth in 2009, compared with earlier years,” said Dr McGillivray.
“The spikes in food and fuel prices and more recently the global recession highlight the need for new measures that will help countries develop stronger, more resilient economies that can better withstand international economic downturns.
“Samoa’s bulk oil purchasing and storage system has given the country the cheapest oil prices in the Pacific.
This has helped build Samoa’s economic resilience. It has created a lower-cost economy, which makes Samoan exports more competitive, encourages investment, and means lower prices of goods and services for Samoan people.
Had it not been for this system, the global recession would have hit Samoa harder.
“Combined with other reforms, this will help generate broad-based economic growth and enable the country to take greater advantage of the new PACER Plus trade agreement,” said Dr McGillivray.
Pacific Economic Survey 2009, engaging with the world was prepared by AusAID and specialists from the Pacific and Timor-Leste.
It examines ways Pacific island countries and Timor-Leste can grow their economies by integrating more fully in the global economy, through labour mobility, trade and by better managing sudden economic shocks such as rising food and fuel prices.
The survey credits reforms in Samoa’s aviation sector for an increase in tourism numbers. As with Cook Islands and Palau, trade in services – namely tourism and labour – is driving growth in Samoa, with tourism accounting for around twenty percent of GDP and a similar high share of jobs.
But while economic growth in Samoa has been relatively strong in recent years, stimulating job growth and creating enough jobs for young people entering the labour force is a major challenge. Tapping into regional and international labour markets will become increasingly important.
“Samoa has been hurt by the downturn in the United States with fewer people able to seek work in that country. However in the longer-term, providing relevant education and training will give Samoans and other Pacific islanders greater access and opportunities to work overseas. The remittances they send back home will continue to help drive local economies,” said Dr McGillivray.
Pacific Economic Survey 2009, engaging with the world is available at www.pacificsurvey.org