Report No. 2168a-WSO Western Samoa: UP Development Issues and Prospects Public Disclosure Authorized
December 29, 1978 East Asia and Pacific Regional Office FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS
Currency Unit = Western Samoan Tala (WS$)
WS$1 = US$1.44 US$1 = WS$0.70
Average rate prevailing in October 1978
FISCAL YEAR
January 1-December 31 FOR OFFICIAL USE ONLY
This memorandum is based on information received from Western Samoan authorities, which was supplemented by a mission to Western Samoa in December 1977. The mission consisted of Townsend Swayze and Laurie Effron; the memorandum was written by Laurie Effron with contri- butions from T. Swayze. The memorandum benefited from discussions with Madhusudan Joshi. Nizar Jetha revised the memorandum fol:Lowing discussions with Government officials in November 1978.
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
WESTERN SAMOA: DEVELOPMENT ISSUES AND PROSPECTS
TABLE OF CONTENTS
Page No.
COUNTRY DATA
MAP
SUMMARY AND CONCLUSIONS ...... i - iii
I. INTRODUCTION ...... 1
A. General Characteristics .1...... B. Social and Political Setting ...... 1 C. Economic Setting ...... 2
II. AGRICULTURE: PROBLEMS, DEVELOPMENT STRATEGY AND PROSPECTS ...... 5
A. The Problems ...... 5 B. The Development Strategy ...... 10 C. Prospects for Agricultural Development ...... 13
III. INDUSTRY, TOURISM AND HUMAN RESOURCES: STRATEGY AND PROSPECTS ...... 15
A. Industry ...... 15 B. Tourism ...... 15 C. Human Resources ...... 16
IV. DEVELOPMENT PLANNING ...... 19
V. PUBLIC EXPENDITURES AND MOBILIZATION OF SAVINGS ...... 22
A. Public Expenditures and Their Financing ...... 22 B. Evolution of the Financial Structure ...... 25
VI. THE EXTERNAL SECTOR ...... 27
STATISTICAL APPENDIX
COUNTRY DATA - WESTERN SAMOA
AREA POPULATION (197b) DENSITY
2,840 sq km 152 (thousand) 53 per sq km Rate of growth: 0.7% (1971 to 1976)
POPULATION CIIARACTERISTICS (19/6) HEALIT
(;rudo birth rate (per 1,000) - 35.0) Population per physician (1975) - B,BUO Crude death rate (per 1,000) - 7.0 Population per hospital bed ( 1973) - 232 Infant mortality (per 1,0()0live births) - 39.9/a
EDUCATION ACCESS TO ELECTRICITY (1971)
Adult literacy rate - 95% %of population - urban - 86%. Primary school enrollment (1970) - 74% /a %of population - rural -
ACCESS 10 PIPED WATER (1971) NUTRITION (1974)
%of population - urban - 22.3 Calorie intake as % of requirement - - rural - 2.3 Per capita daily protein intake (gms) - 33.2
CNP PER CAPITA IN 1976: US$350 /b
GROSS NATIONAL PRODUCT IN 1976 (Current prices) GOVERNMIENTFINANCE WS$ mln US$ min % 1976
CNP at market prices /b 50.0 100.0 Current receipts 12.5 Exports of goods 4.3 8.6 Current expenditures 10.6 Imports of goods 18.9 37.8 Current surplus 1.9 Capital expenditures 11.1 External assistance &ocher (net) 9.2
MONEY, CREDIT AND PRICES 1970 1971 1972 1973 1974 1975 1976 1977
(Million WS$ outstanding at end period)
Money and quasi-money 3.8 4.1 4.7 6.1 7.1 7.5 9.2 10.9 Bank credit to public sector ... -0.5 0.5 1.1 1.2 0.5 0.1 -0.8 Bank credit to private sector ... 2.0 2.6 2.9 4.1 3.8 5.9 7.2
(Percentages or Index Numbers)
Consumer price index (1971 = 100) 95.6 100.0 108.8 135.0 159.6 158.2 180.4 196.2 Annual percentage change in: Consumer price index 2.9 4.6 8.8 24.1 18.2 -0.8 14.0 8.8 Bank credit to public sector - 227.1 4.9 -58.3 -80.0 -900.0 Bank credit to private sector 29.7 10.7 42.3 -7.3 55.3 22.0
BALANCE OF PAYMENTS MERChANDISE EXPORTS (AVERAGE 1974--76)
1975 1976 1977 /c US$ min % (US$ million)
Exports of goods 2.9 4.3 9.5 Copra 2.0 51.3 Imports of goods 14.2 18.9 26.9 Cocoa 1.2 30.7 Bananas 0.1 2.b Trade balance -11.3 -14.6 -17.4 Timber 0.1 2.6 Taro 0.2 5.1 Services (net) 0.7 1.1 1.6 Other 0.3 7.7
Net transfers 4.4 7.1 9.7 Total 3.9 100.0 Balance on current account -6.2 -6.4 -6.1 EXTERNAL PUBLIC DEBT, DECEMBER 1977
Net MLT borrowing /d 5.0 3.1 2.3 US5 mln
Other capital (net) 1.5 2.6 6.1 Public debt, incl. guaranteed 24.0 Increase in reserves (-) --0.3 0.7 -2.3 DEBT SERVICE RATIO FOR 1976 /e x Gross reserves (end year) 3.5 3.8 5.4 Public debt; incl. guaranteed 8.0 RATE OF EXCHANGE 1972 1973 1974 1975 1976 1977 IBRD/IDA LENDING, OCTOBER 1978 IDA (US$ million)
WSs1.00 - US$ 1.481 1.635 1.649 1.585 1.255 1.271 Outstanding &disbursed 4.1 US$1.00 = WS$ 0.675 0.612 0.606 0.631 0.797 0.787 Undisbursed 0.3 Outstanding, incl. undisbursed 4.4
/a 1974. /b World Bank Atlas. Estimates are tenitative, as there are no national income accounts. /c Estimated. /d Includes errors and omissions. /e Ratio of debt service to exports of goods and nonfactor services.
Note: All conversions to doLlars in this table are at the average exchange rate prevailing during the period covered.
Not available.
December 29, 1978
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WESTERN SAMOA
DEVELOPMENT ISSUES AND PROSPECTS
SUMMARY AND CONCLUSIONS
1. Western Samoa is a small island country in the South Pacific that has been independent since 1962. The country has a population of 152,000 and a per capita GNP of US$350 (1976). The population is homogeneous, with 89% full and 10% part Samoan, and 99% Christian. The principal economic activity is village agriculture. The traditional village structure, organized around the extended family system, is still the predominant feature of the society.
2. Agriculture is the mainstay of the economy, accounting for about one-half of GNP, employing two-thirds of the active population, and producing almost all of the country's exports. The sector is characterized by low yields, and export volumes of major commodities - copra, cocoa and bananas - have fluctuated widely over the past decade without showing an upward trend. This suggests that agricuLltural production, reliable data for which are not available, may have also stagnated. The development of the industrial sector, which accounts for about 10% of GDP and 5% of employment, has been limited by the small size of the domestic market and an isolated geographic location, but tourism has expanded steadily, and now brings gross receipts equivalent to 30% of exports of goods and services.
3. Net emigration, principally to American Samoa and New Zealand, has been important both in keeping down the population growth rate, from a natural rate of about 3% per annum to less than 1% during 1971-76, and in providing a large inflow of personal remittances, which currently amount to 40% of the value of exports of goods and services. Since 1975, New Zealand has limited the number of people from Western Samoa who could apply for permanent residence, and as a result the number of net emigrants has dropped significantly. This does not appear to have resulted in a noticeable increase in overt unemployment because of the strength of the extended family system, but there is now greater pressure to expand broadly based income-earning opportunities.
4. In contrast to the previous years of the present decade, when any increase in real per capita income is likely to have been small, the economy made significant progress in 1977 an 1978. Sharp increases in export volumes of copra and cocoa combined with favorable prices produced a new peak in export earnings in 1977. External assistance also rose substantially, enabling the Government to achieve a strong expansion in its development expenditures. Official estimates place the real GDP growth in 1977 at 7%. Although growth slowed in 1978 due to adverse weather, which depressed the production of copra and cocoa, the continuing momentum of the Government's development spending moderated the effect of lower export earnings on the economy. Another favorable development has been a continuing decline in the rate of inflation since 1976; the Government's wage policy, which has held down increases in salary and wage levels in the public sector below the rate of inflation, has contributed to this trend. - ii -
5. Western Samoa's development prospects will depend on the perfor- mance of the agricultural sector. The country's strategy for agriculture recognizes the need to develop both large-scale estate and small-scale village agriculture. The expansion of large-scale activities is being carried out by two Government-owned companies, the Western Samoa Trust Estate Corporation (WSTEC) and the Samoa Forest Products Limited. The small-scale agriculture is being developed through the Village Development Program, which aims at providing villagers with a wide range of investments. To overcome constraints on agricultural development, Government policies have emphasized the expansion of extension services, increased investment in research, improved credit availability through the Development Bank of Western Samoa, provision of fertilizers and other inputs at concessionary prices, construc- tion of rural access roads and improved shipping facilities. In addition, increasing attention has been paid to the production of timber, livestock and fishing, for which there are good prospects. Within this framework, high priority has been given to agricultural development in Savai'i, the country's poorest region but the one with the highest development potential.
6. While the country's policies to deal with short-term problems of agriculture appear to be appropriate, a bolder strategy is needed to achieve a significant increase in agricultural productivity, output and exports. In a longer-term context, the necessary prerequisites for the modernization of the agricultural sector are the introduction of high-yielding, disease- resistant planting material and adoption of satisfactory agricultural practices related to land clearing and weeding, planting, fertilization and disease control. In the absence of these conditions, the additional output from new investments will continue to be far below what is potentially possible. To bring better inputs and improved agricultural practices to the village agriculture is perhaps the greatest challenge the country faces at this juncture in its history. Alternative ways of transforming the tradi- tional, low-productivity village agriculture into an efficient sector, therefore, need urgent and careful consideration. One possibility would be to start by introducing modern production techniques in the WSTEC and to use WSTEC to help develop village agriculture on a sustained basis. Regardless of what mechanism is chosen, however, it cannot be stressed too strongly that, with 80% of agricultural land under village control, the key to both a more rapid agricultural and overall economic development is the creation of a more efficient village agriculture.
7. Reflecting a low level of development spending in the early 1970s and an acceleration in the country's development effort since 1975, develop- ment expenditures over the five-year period, 1973-78, grew at an average an- nual rate of over 30% in current prices and 24% in real terms. The growth in development expenditures was accompanied by a strong shift in favor of agriculture, whose share in total development expenditures rose from 20% in 1975 to 30% in 1978. The expansion in the Government's developmental activi- ties was made possible by a substantial increase in the use of foreign resources (mainly grants and soft-term loans), which financed about 64% of development expenditures in 1978 compared to 47% in 1973. Nevertheless, for the Third Plan period, 1975-79, domestic resources are likely to finance one- third of development expenditures, or a somewhat higher fraction than the ratio of one-quarter projected in the Plan. - iii -
8. The bulk of t:he domestic finance comes from current account sur- pluses and the National Provident Fund, the main source of non-bank borrowing from local sources. Tle budgetary surplus on the current account, having remained virtually static in the early 1970s, showed significant improvement in 1977/78 as a result of higher economic growth, better administration and enforcement of income tax, and new taxes and higher user charges for several services introduced in 1977. The recent progress in lifting the level of Government saving must be sustained if the availability of domestic finance is not to constrain development over the long-term. In this connec- tion, the tax structure should be reviewed with a view to making it more productive and elastic, and the scope for raising non-tax revenues fully utilized. Continued restraint on the growth of current expenditures will also be necessary.
9. Given the serious deficiency of statistics and technical manpower, comprehensive planning may neither be feasible nor appropriate at the present time. However, with the recent growth of the public sector, the planning of public expenditures has assumed greater significance and a more detailed public sector plan than hitherto would be highly desirable for the next planning period, 1980-84. To be operationally meaningful, such a plan should emphasize the project content, and its proposed financing pattern should include a broad strategy for raising the required domestic resources.
10. Western Samoa's balance of payments largely mirrors developments in the agricultural sector. The stagnation in export volumes has meant growing trade and current account deficits. Despite the substantial contri- butions of tourism and personal remittances to foreign exchange receipts, the current account deficit has widened significantly since 1974. The deficit exclusive of official transfers increased from WS$4 million in 1970 to WS$15.6 million in 1977. The deficits have been primarily financed through official (project) grants and soft loans, which amounted to WS$7.7 million and WS$3 million, respectively, in 1977. Project grants have traditionally come from Australia and New Zealand, while the main sources of loan finance are ADB, IDA and New Zealand. Interest-free loans have been received recently from the OPEC Special Fund.
11. The present debt service ratio of 8% of exports of goods and services is moderate. However, because of the wide imbalance between the country's imports and exports (in relation to GNP) and large fluctuations in its exports, it is desirable that virtually all of Western Samoa's external public capital requirements should continue to be met through grants and loans on concessional terms.
12. The structure of, as well as recent trends in, Western Samoa's balance of payments have a clear long-term implication. While small, low- income island economies tend to have large resource gaps (the excess of import of goods and services over their export as a percentage of GNP), it will be unrealistic for the country to assume that its present unusually large resource gap of about 25-30% of GNP can be maintained indefinitely. The balance of payments picture, therefore, also underlines the need to tackle the problems of the agricultural sector with a sense of urgency and determination.
I. INTRODUCTION
A. General Characteristics
1.01 Western Samoa is a small country in the South Pacific tniat consists of two main islands and seven smaller ones. It covers a total area of 2,840 square kilometers and has a population of about 152,000 (1976 Census)./1 Most of the people live in the coastal region of the two main islands of Upolu (110,000 people) and Savai'i (42,000 people). The capital city of Apia is located on the northern coast of Upolu and has an estimated population of 35,000. The closest country is American Samoa, 130 km away, and distances to other countries are great and transportation is costly: New Zealand is 2,900 km and Hawaii is 4,160 km from Western Samoa.
1.02 Regular contact with Europeans began in 1830, when missionaries and traders established permanent residence on the islands. In 1900, European powers agreed to a German colonial administration that exercised control over Western Samoa until 1914. Then the area's administration was taken over by New Zealand and continued until Western Samoa became independent in 1962. A treaty of friendship with New Zealand is still in force and close commercial ties have been maintained.
1.03 Village agriculture, consisting of both subsistence and cash crop cultivation, is the predominant economic activity in Western Samoa. The standard of living can accurately be described as an "affluent subsistence," with sufficient access to shelter, food, clothing and health care. There is a primary school in every village, and the literacy rate is very high at about 95%. The population is relatively homogeneous: 89% are full- and 10% part-Samoan (1% are of European origin); Christianity is the dominant religion (99% of the population belong to one of the Christian denominations); differ- ences in social or economic classes are slight.
B. Social and Political Setting
1.04 A particular feature of Western Samoa is a strong adherence to the traditional structure of its society. Village social and economic life is organized around the extended family, or aiga, under the direction of a matai, the recognized head of the family. The matai of a village are responsible for the day--to-day activities of the members of their aiga, as well as for distribution of land and of income within their families.
1.05 Each aiga has a traditional title to a given land area, and this customary land cannot be sold, mortgaged or used as collateral for loans, although it may be leased for development projects. As much as 80% of the total land surface in Western Samoa is customary land, and over one-half of the country's agricultural production comes from village cultivation. Since
/1 By comparison, Fiji covers an area of 18,300 sq km and has a population of 573,000 (end-1975), and Papua New Guinea has 475,400 sq km and a population of 2.83 million (mid-1976). - 2 -
the matai manage the use of their families' land and all decision-making at the village level is done by a council of matai,/l the matai control the principal economic activity of the country. This is an important aspect of development planning: projects that involve either individual village members or an entire village population must have the approval and coopera- tion of the matai in order to be successful.
1.06 Although not originating in the traditional social structure, the role of organized Christianity in both the social and economic life of the village is also important. Missionary schools account for a significant portion of the school population./2 The churches (Roman Catholic, Congrega- tional, Methodist, Latter Day Saints and Seventh Day Adventist) are often the largest and most modern buildings in the village, and a subject of village pride and inter-village competition. Church construction, together with the support of pastors and their families, and cash donations to the churches, may account for a significant part of village savings.
1.07 Western Samoa has a system of government which combines parlia- mentary democracy and traditional elements of Samoan society. All but two members of the Legislative Assembly are elected by and from among the 10,000 matai in the country. The Head of State is elected by the Legis- lative Assembly, from among the chiefs of royal families, and was initially to hold office for life. However, the next heads of state will be elected by the Assembly for five-year terms. Until recently, the Prime Minister, appointed by the Head of State with the approval of the Legislative Assembly, was also selected from among the chiefs of royal families. However, the present Prime Minister, Tupuola Efi, appointed in 1976, does not carry the royal matai title, and this change is considered a significant depar- ture from tradition, and one that will broaden the range of candidates for Prime Minister.
C. Economic Setting
1.08 Official compilation of national accounts for Western Samoa on a regular basis has not yet begun and a large component of GNP involves subsis- tence production, for which there are no reliable figures. There are indica- tions, however, that per capita real income did not increase between 1972-76, and may have even fallen. Per capita GNP is tentatively estimated at about US$350 in 1976./3 Estimates of sectoral production have been published only for 1972 (see Table 1).
/1 The village council of matai is called a fono. It is estimated that in 1970 there were about 30 matai per village. There are three categories of matai: Chiefs of royal families, "high" chiefs and "token" chiefs. In each village there are both token and high chiefs, and in the fono the high chiefs have veto power over decisions of token chiefs.
/2 In 1977, missionary schools accounted for 15% and 43% of primary and secondary school enrollment, respectively.
/3 Including subsistence production. - 3 -
Table 1: ESTIMATED VALUE ADDED AND EMPLOYMENT BY SECTOR, 1971-72 /a
Value Added Employment 1972 1971 (WS$'000) ('000)
Agriculture, forestry and fisheries 14,950 25.4 (54) (67)
Manufacturing, quarrying and construction 3,402 2.4 (12) (7)
Wholesale and retail trade, restaurants 3,210 2.4 and hotels (12) (6)
Transportation and communications 1,232 1.2 (4) (3)
Services and government 4,972 6.3 (18) (17)
Total 27,766 37.7 (100) (100)
/a Numbers in parentheses indicate percentage of total.
Source: Third Five-Year Development Plan, 1975-79, "Report on National Income Estimates and Related Aggregates for Western Samoa," S.B. Tiwari, prepared for UN-ECAFE and Government of Western Samoa, October 1973.
1.09 Agriculture is by far the most important sector of the economy, accounting for about one-half of GNP, employing about two-thirds of the active population, and producing almost all of the country's exports. It has stagnated during the past decade. Since 1966, export volumes of all major commodities - copra, cocoa and bananas - have also been stagnant. Estimated yields are very low /1 and a sizable proportion of tree crops are overaged or disease-damaged. The country has periodically experienced hurricanes and seasonal droughts that have done considerable damage to crops. Partly for this reason, levels of production are subject to wide fluctuations, so that supplies and prices of foodstuffs also fluctuate considerably.
1.10 A limited domestic market and an isolated geographic location have restricted industrial growth; the industrial sector plays a minor role in the economy, accounting for about 10% of GNP and even less (about 5%) of employment. In the tertiary sector, Government services and tourism have expanded steadily since 1966. In 1976, gross receipts from tourism accounted for 28% of the value of exported goods and services.
/1 See para. 2.04 for details. - 4 -
1.11 Net emigration, mostly in American Samoa and New Zealand, has had an important impact on the country. It has included a significant portion of the population, amounting to 3,500-4,000 or 2-1/2% of the population per year during the early 1970s, and has therefore kept down overall population growth rates./l Also, remittances sent to families of emigrants often account for a significant part of the cash income of a village and, in 1974, were the equivalent of almost 50% of the value of exports of goods and services. Since 1975, however, New Zealand has limited the number of people from Western Samoa who could apply for permanent residence. As a result, the number of net emigrants has dropped significantly, to about 1,200 in 1976, and personal remittances in 1975 and 1976 were lower than in 1974. In addition, population pressure on the land has increased. Because of the strength of the extended family system, growth in open unemployment is not as much of a problem as under- employment, but there is now greater pressure to expand broadly based income-earning opportunities.
1.12 In contrast to the previous years of the present decade, the economy made significant progress in 1977. Sharp increases in export volumes of copra and cocoa combined with favorable prices produced a new peak in export earnings (see para. 6.02). External assistance also rose substan- tially, enabling the Government tco achieve a strong expansion in its develop- ment expenditures (see Chapter V). Additionally, tourist earnings recovered and personal remittances stabilized. Taking account of these developments, official estimates place the real GDP growth in 1977 at 7%. Growth slowed somewhat in 1978 as production of copra and cocoa fell significantly below the 1977 level due to adverse weather conditions. However, the maintenance of the momentum of its development spending by the Government helped to moderate the effect of lower export earnings on the level of economic activity.
1.13 The rate of inflation, which fell from 14% in 1976 to 8.8% in 1977, is estimated to have declined further in 1978. This favorable price development is partly attributable to the Government's wage policy, which has held down increases in salary and wage levels in the public sector below the rate of inflation. Indirectly, this policy has also affected wage awards in the private sector.
1.14 In common with many other small countries in the South Pacific, Western Samoa is characterized by high cost of labor and other inputs. This has special significance for the development of the agricultural sector. Although the minimum hourly wage is only WS$0.22, the average wage per day in WSTEC estates, for instance, amounts to WS$2.70 (US$3.50), which is much higher than in most Asian countries. High transport costs, arising from irregularity of shipping and low tonnages, add significantly to the domestic cost of imported inputs. Thus, the local prices of fertilizers and chemicals are between 50-110% above their f.o.b. prices in New Zealand.
/1 During 1971-75, the average overall annual growth rate of the population was less than 1%. - 5 -
II. AGRICULTURE: PROBLEMS, DEVELOPMENT STRATEGY AND PROSPECTS
A. The Problems
2.01 The agricultural sector has been suffering from stagnant production levels and low yields over the past decade./1 Production levels of the three major crops (copra, cocoa and bananas) and the main staple (taro) have fluctuated widely, without showing any upward trend since 1966. The factors responsible for this situation include overaged trees and inadequate replant- ing, trees extensively damaged by hurricanes and by disease and fluctuations in weather, especially periodic droughts. The major constraints to improving agricultural production are:
(a) the poor condition of trees and deterioration of the soils;
(b) limited information among villagers on the proper techniques of cultivating and harvesting their crops or of producing new crops;
(c) inadequacy of the extension service that has limited human and physical resources for a small-scale and widely dispersed village agriculture;
(d) limited infrastructure in some areas, resulting in difficult access to uncultivated lands and in an inadequate water supply; and
(e) fluctuating prices for major export crops and limited export marketing poss:ibilities, especially for bananas and taro, resulting in uncertain returns on investment in the major export crops.
In recognition of these constraints, the development proposals for agricul- ture are aimed at: (a) upgrading existing lands through rehabilitation and improved cultivation techniques, both of village lands and of large-scale exploitation; (b) improving research facilities to introduce superior crop varieties and techniques; (c) improving and expanding the Extension Service through training and provision of better facilities; (d) construction of village and plantation access roads to open up uncultivated land, especially on Savai'i; and (e) helping export prospects by strengthening the marketing boards, and by improving packaging and shipping arrangements.
2.02 Of a total land area of more than 700,000 acres, about 80% belongs to villages and is under the management of the matai. The remainder belongs to private farmers, to the Government and to the Western Samoa Trust Estates Corporation (WSTEC), a public corporation. WSTEC is seen as holding various assets, mainly in the agricultural field, in trust for the people of Western
/1 Data on production levels are not available. Estimates in Table 3 are based on fragmentary information on domestic consumption levels and on export volumes. - 6 -
Samoa. Estimates of land use made in 1975 indicate that about 15-20% of the total land, most of which is in the coastal areas, is actually harvested, and over four-fifths of total crop production comes from village lands.
2.03 Although the island of Savai'i, with over 400,000 acres, is larger than Upolu with about 225,000 acres, about two-thirds of the country's cultivated land is on Upolu. Most of the potential for developing new areas is on Savai'i where at least 200,000 currently uncultivated acres are suitable for crops, cattle grazing or timber exploitation, compared to less than 100,000 acres on Upolu./l
Table 2: ESTIMATED LAND USE /a 1975 estimate (acres)
Village WSTEC and lands other lands Total
Coconuts alone or interplanted 92,000 10,000 102,000 Cocoa, bananas and taro 32,000 6,000 38,000
Total harvested area 124,000 16,000 140,000
Other, including residential 30,000 14,000 44,000
/a Because intercropping is a general pattern of cultivation, and land parcels are usually small and irregular, estimates of areas harvested for each crop are approximate and may involve some double counting.
Source: Third Five-Year Development Plan, 1975-1979, Department of Economic Development.
2.04 MIajor Crops. The most important activity in Western Samoa is the cultivation of tree and root crops. Of these, coconuts account for about two-thirds of the harvested land and 40-60% of merchandise export earnings./2 Estimated average yields of 1,800 nuts/acre are very low by comparison to the 4-6,000 nuts/acre achieved in other countries in the region, and export volumes have fluctuated considerably over the last decade. The low produc- tivity is attributed both to overaged coconut stands and to an ineffective
/1 Source: PG Pak-Poy & Associates Private Limited, Preinvestment Study for Road Development, 1972.
/2 See Table 3.2, Statistical Appendix. - 7 - replanting scheme that resulted in unhealthy new plant stands./I Furthermore, insufficient attention has been paid to introducing improved varieties. Cocoa, the second most important export of the country, also has a very low yield, of about 250 lbs/acre or less, compared to 1,000 lbs/acre that has been achieved elsewhere under similar soil and climatic conditions. The volume of expor-s has been in an almost continuous decline since 1962./2 The poor performance of cocoa is due to overaged trees, soil deterioration due to continuous interc:ropping and poor cultivation techniques. Bananas and taro, the main staple cl-ops, have yields of one-fourth or one-third of their potential./3 The volume of banana exports in 1977 decreased to less than one- tenth of the 1971 level, as production fell due to disease and severe hurri- cane damage, and domestic supplies were used as a substitute for taro, whose production has also suffered serious setbacks from fluctuations in weather.
Table 3: ESTIMATED AGRICULTURAL PRODUCTION (1972-74 average)
Coconuts Cocoa Bananas Taro and Ta'amu (nuts) (tons) (lbs) (lbs)
Average exports 83 million/d 1,660 3.5 million 5 million Domestic consumption 55 million/a 140/b 45.0 million 55 million Aggregate harvest 138 million 1,800 48.5 million 60 million Estimated harvested area (acres)/c 77,000 12,000 3,200 5,000 Estimated yield/acre 1,800 nuts 250 lbs 15,000 lbs 12,000 lbs
/a This assumes an average per capita consumption of one nut per day. Total unmarketed production of coconuts may be higher than one nut per day per person. See Brian Lockwood, Samoan Village Economy, 1971. /b This may be an underestimate. See Brian Lockwood, op. cit. /c These areas are considered by Western Samoan authorities to be conservative estimates, and therefore yields may be overstated. /d About 16,000 tons of copra.
Source: Western Samoa, Third Five Year Development Plan, 1975-1979, Department of Economic Development, November 1975.
/1 Under a Government scheme, 90,400 acres had been replanted by the end of 1976, but inefficient land clearing left old trees that subsequently caused diseases in new plantings.
/2 From over 5,000 in 1962 to about 2,500 tons in recent years (Table 4).
/3 Banana production can reach 40-60,000 lbs/acre under similar conditions while, for taro, yields of 30-34,000 lbs/acre have been achieved under experimental conditions at the South Pacific Regional College of Tropi- cal Agriculture at Alafua in Upolu. -8-
Table 4: VOLUME OF MAJOR EXPORTS, 1968-78
1978 1968 1970 1972 1974 1975 1976 1977 Estimates
Copra ('000 tons) 12.6 9.0 18.7 12.3 19.4 11.8 18.7 12.5
Cocoa ('000 tons) 2.6 2.4 1.5 1.8 1.5 1.6 2.6 1.2
Bananas ('000 56-lb cases) 91.6 200.7 84.3 51.7 18.9 52.8 13.4 14.2
Timber ('000 ft super board) - - 3,434.0 3,426.0 1,214.0 446.0 1,541.0 1,521.0/a
Taro ('000 72-lb cases) - - 25.0 90.7 19.9 77.3 52.0 86.0/a
/a January-September.
Sources: Table 3.2, Statistical Appendix; and mission estimates.
2.05 Livestock, Fishing and Timber. Other agricultural activities in Western Samoa whose expansion or improvement would have a noticeable impact on the standard of living include livestock breeding, fishing and timber exploitation. Over the last decade, the estimated size of the cattle popula- tion has shown no growth, and fragmentary information on meat production indicates no upward trend since 1965, while imports of meat have increased./l In view of this, the Government is encouraging both villages on a small scale and the Western Samoa Trust Estates Corporation on a large scale to implement livestock projects.
2.06 Fishing is in a similar situation as livestock in that the activity has been insufficient to feed the population, and imports of fish have grown steadily over the last decade. In 1977, about one-half of the domestic
/1 Data on production levels of meat consist of figures on the number of cattle slaughtered. Information on levels of meat consumed is not available. -9 -
demand for fish was met from imports. However, the Government's efforts to increase the local catch through the training of fishermen and building of new, improved boats are meeting with growing success; the local catch of fish has increased from about 1,200 tons in 1973 to 1,750 tons in 1977. The Government also proposes to establish fish processing plants with Japanese and FAO assistance to process surplus fish.
2.07 The timber industry operating in Savai'i had been declining under the aegis of an American subsidiary, Potlatch Company, until May 1977, when the company was bought by the Government. The company's difficulties were due mainly to its wasteful methods of cutting timber, inadequate treatment of timber against disease and poorly managed field operations. Under better management, the Samoa Forest Products Limited (SFPL), as it is now called, has quickly turned the losses incurred by Potlatch into a net operating profit. There appears to be good potential on Savai'i for timber exploitation and SFPL hopes to expand operations over the next few years to almost double its present size and is investigating the potential for a wood chip factory.
2.08 Extension Services. The Agricultural Extension Service, under the Department of Agriculture, has not been effective in dealing with the problems of village agriculture. It has been organized on a crop-specific basis, with both officers and sections of the Department concentrating on one or several commodities. In addition, the effectiveness of the Extension Service has been constrained by understaffing, personnel of limited training, and inadequate transportation and communication facilities. Finally, there has been little or no contact between the agricultural research and operational units, and the Extension Service has consequently suffered from lack of innovation. The Agricultural Store Corporation, in operation since 1975, provides agricultural inputs, some of which are subsidized, along with instructions in Samoan on their use. There is currently, however, only one store in the capital city of Apia, in Upolu, and access to it is very limited, especially for farmers living on the island of Savai'i.
2.09 Exports and Domestic Marketing. Export and domestic marketing suffers from poor infrastructure and unstable prices. Because of Western Samoa's isolated location and small quantities of produce, shipping of exports is sometimes a problem. Lack of good roads and communication in Savai'i and between the two islands has limited the marketing of staple crops, and especially of fresh fish. Mtarketing boards, owned and run by the Government, are responsible for purchasing and marketing all agricultural output for export./1 Prices to producers and traders are fixed on the basis of prevailing world prices, with deductions made for the operating expenses and stabilization funds of the boards. The marketing boards have a potentially important role to play in stabilizing producer prices of exports and in improving their marketing, but, although they have been in operation
/1 Except in the case of WSTEC, which markets its own cocoa. - 10 -
for a considerable time,/1 producer prices of exports have fluctuated almost as much as world prices (Table 5).
Table 5: OPERATIONS OF MARKETING BOARDS, 1971-77 (SEPTEMBER)
1977 1971 1972 1973 1974 1975 1976 (Sept.)
Copra
World price (WS$/long ton) 114.1 73.7 117.8 377.6 134.6 157.0 276.7
Domestic producer price (WS$/long ton) 78.4 59.9 78.0 239.7 116.5 95.9 169.5
Ratio of producer to world price (%) 68.7 81.3 66.2 63.5 86.6 61.1 61.3
Cocoa World price (WS$/long ton) 466.0 593.0 874.0 1,030.0 809.0 1,359.0 2,652.5
Domestic producer price /a (WS$/long ton) - - 625.3 623.8 486.5 783.0 1,719.8
Ratio of producer to world price (%) - - 71.5 60.6 60.1 57.6 64.8
/a The Cocoa Board began to fix prices in 1973.
Source: Western Samoan authorities.
B. The Development Strategy
2.10 The strategy for agricultural development has several principal elements. One is the encouragement of large-scale development through the expansion of the activities of Western Samoa Trust Estates Corporation (WSTEC) and of Samoa Forest Products Limited (SFPL). A second is aimed at
/1 The Copra Board was established in 1948; the Cocoa Board began to fix prices in 1973; and the Banana Board, established in 1976, was formerly part of the Produce Marketing Division (PMD). The PMD is responsible for marketing all other agricultural exports. upgrading and expanding agriculture on village lands in several ways: (a) implementation by villages of a wide range of agricultural projects; (b) construction of village access roads; and (c) improvement of the agricultural extension services. Finally, investment is to be made in related services such as in improved marketing facilities for both domestic sales and exports, and in research facilities, which are to be expanded and made more operational. Within this framework, high priority has been given to agricultural development in Savai'i, the country's poorest region and the one with the highest development potential.
2.11 Large-Scale Development. The current operations of the Government- owned and managed Western Samoa Trust Estates Corporation (WSTEC) involve about 11,000 acres of coconuts interplanted with other crops, 2,800 acres of cocoa, and about 12,00() head of cattle (more than half the country's total cattle population), all on Upolu, as well as other commercial activities, such as a soap factory.. In early 1976, a new Board of Directors was appointed and since then WSTEC has been aggressively improving and expanding its activities. With the help of a loan from the Asian Development Bank, WSTEC plans to rehabilitate its coconut plantings, develop processing facilities for cocoa and copra and build an agricultural research station in Upolu. In Savai'i, the Government recently allocated 10,000 acres to WSTEC for develop- ment. The intention is to allocate 1,000 acres to cocoa and 4,500 acres for cattle (increasing WSTEC's holdings by 8,000 to reach a total of 20,000 head) to graze under coconuts, and to introduce a number of other cash crops, including bananas, taro and coffee. Eventually, WSTEC may become a vehicle for providing technical expertise, planting materials, processing and market- ing services to village smallholders.
2.12 The Government expects that the continued successful operation of Samoa Forest Products Limited (SFPL) will result in foreign exchange earnings of WS$600,000 in 1979 from timber exports (compared to average annual earn- ings of W$265,000 between 1972-76) and that the expansion of SFPL into unexploited areas in Savai'i and the construction of a wood chip factory will greatly strengthen the country's balance of payments position. The area being exploited in Savai'i is considered well-suited for reafforestation because new trees grow remarkably fast. Up to the present, however, the Government has carried out a program of reafforestation at a rate of about 1,000 acres/year, which is not considered sufficient to maintain forestry resources.
2.13 Development of Village Agriculture. To upgrade small-scale produc- tion of tree and root crops and to improve village fishing and cattle breeding, the Government has proposed several courses of action:
(a) The Village Development Program (VDP) involves the implementation of a range of village projects, and is designed to incorporate village participation through matai cooperation. Projects include fishing, piggeries, and short-term crops that have quick returns to encourage participation of villagers in this new approach to agri- culture, and coconut, cocoa and livestock projects for the long-term. Projects are chosen after discussions and participation at several - 12 -
levels, and the advantage of this approach is that it fits into the traditional system and assures that the project has the interest and support of the entire village.
(b) Village access roads of 1-2 miles into the interior are being constructed by the Public Works Department with help from the villagers. The intention is to provide these roads for all 350 villages on both islands. The roads should greatly facilitate cultivation of village lands and marketing, thereby encouraging the expansion of village production.
(c) The Agricultural Extension Service, under the Department of Agricul- ture, is to be expanded and upgraded. The development of extension will consist of a training component for new and current extension workers, an increase in staff salaries to attract recent graduates, the establishment of an agricultural research facility and demon- stration center on Savai'i for farmer training and in-service training of extension workers, and the construction of extension bases with adequate provision for transportation. The Government also plans to open a second agricultural store on Savai'i and to make use of mobile units to distribute inputs to retail stores on both islands (see para. 2.08).
2.14 Credit. In addition to direct funding from the Government for village projects, agricultural credit is being provided to individuals as well as to village groups by the Development Bank of Western Samoa (DBWS). The DBWS was set up at the end of 1974 to provide the primary organized source of credit for agriculture and is now functioning effectively. Its operations have grown considerably in terms of both the total lending program and the number of loans (see para. 5.12).
2.15 Marketing and Research. To facilitate domestic marketing of supplies and output, the Government has been improving the road network by construction of village access roads, by increasing the ferry service between Upolu and Savai'i,/1 and by the introduction of refrigerated trucks for marketing fresh fish. The Government hopes to improve marketing of exports by several measures. Western Samoa has participated in the formation of a shipping company, Forum Line, involving a number of other countries in the region (Australia, New Zealand, Fiji, Nauru, Solomon Islands and Tonga), which should improve shipment of exports from Western Samoa. Second, effort is being made to upgrade the quality of banana exports by improved central- ized packing arrangements. All copra will eventually be sold to WSTEC's coconut oil mill for processing and WSTEC will then be responsible for marketing the coconut oil. Finally, the Government is attempting to set prices for merchants and traders as well as for producers of the commodities, and has imposed a quota system for the production of bananas and taro, for which there are limited export markets.
/1 The recent acquisition of a second vehicular ferry has considerably increased cargo capacity. - 13 -
2.16 Agricultural research in Western Samoa will have a new impetus with the establishment of a research station by WSTEC, the inclusion of a new research unit with a demonstration component under the Department of Agriculture and the expansion of the research program at the South Pacific Regional College of Tropical Agriculture at Alafua./l Great care will have to be exercised to ensure that the activities of these facilities are properly coordinated.
C. Prospects for Agricultural Development
2.17 The long-term potential for agricultural development in Western Samoa is considerable provided policies to modernize agriculture are adopted. Indeed, modernization of the agricultural sector needs to be given the highest priority for, unless the recent trends in agricultural productivity, output and exports can be reversed, the economy's growth prospects will not be very bright. While the country's policies to deal with short-term prob- lems of agriculture appear to be appropriate, a strategy that can deal effectively with the long-term structural problems has yet to be formulated.
2.18 The large-scale development efforts have begun well. The operations of both Samoa Forest Products Limited (SFPL) and Western Samoa Trust Estates Corporation (WSTEC) now benefit from dynamic management. There is a very promising future for timber development, with good resources and suitable conditions for reafforestation on Savai'i, and adequate port facilities at Asau for exporting. In the case of WSTEC, the immediate effectiveness of management and operational staff may be limited by a lack of experience. WSTEC is aware of this shortcoming and, in the short-run, will seek technical assistance and, in the long-run, will rely on developing skills through its training program.
2.19 The Village Development Programme (VDP) has also had a promising start. There are a number of village projects under way, and the program benefits from enthusiasm and support at the highest levels of Government as well as from interest and cooperation at the village level. Over 60 village access roads had been built by October 1977. A potential bottleneck in the VDP exists at two levels: at the decision-making level in the Government and at the implementation level in villages. The Department of Agriculture has been slow to respond to requests from villages to evaluate the feasi- bility of projects and the Rural Development Office, responsible for choosing and implementing projects, is understaffed. Second, if some of the problems affecting the extension service (see para. 2.08) are not overcome quickly, project implementation for a large number of villages may be hampered.
/1 Established in 1966 as Alafua College, the college was incorporated as part of the University of the South Pacific in 1977. - 14 -
2.20 While the independent development efforts of both large-scale (SFPL and WSTEC) and small-scale (village) agriculture have begun well, the potential does exist for conflict between the two with respect to the use of land and the availability of unskilled and semi-skilled labor. The timber cucby SFPL is on customary land, belonging to villagers, and the Government's reafforestation program has been below the targeted rate of 2,000 acres per year partly because of conflict with the villagers' desires to cultivate their land opened and cleared by SFPL. The expansion of SFPL will also require an additional 100-200 workers by 1979, while WSTEC's operations will need as many as 1,500-2,000 workers by 1981. At the same time, the village development program is providing incentives for villagers to work on their own land. Despite this, official projections for this period indicate growing unemployment for the country as a whole, although expectations are that the majority of job-seekers will be concentrated in the Apia urban area. However, if the rapid expansion of income earning opportunities on Savai'i does not offer sufficient incentive to attract a flow of migrants from Upolu, Savai'i might be changed from an area of underemployment to one of labor shortage.
2.21 In a longer-term context, the necessary prerequisites for a reason- able rate of agricultural development are the introduction of high-yielding, disease-resistant planting material and adoption of satisfactory agricultural practices related to land clearing and weeding, planting, fertilization and disease control. In the absence of these conditions, the additional output from new investments will continue to be far below what is potentially possible. To bring better inputs and improved agricultural practices to the village agriculture is perhaps the greatest challenge the country faces at this juncture in its history. Alternative ways of transforming the traditional, low-productivity village agriculture into an efficient sector, therefore, need urgent and careful consideration. One possibility would be to start by introducing modern production techniques in the WSTEC, and to use WSTEC to help develop village agriculture on a sustained basis. Regardless of what mechanism is chosen, however, it cannot be stressed too strongly that, with 80% of agricultural land under village control, the key to both a more rapid agricultural and overall economic development is the creation of a more efficient village agriculture.
2.22 In view of the poor record of agricultural development in recent years, agriculture must be given greater emphasis. This will require sub- stantial expenditures on production and distribution of inputs, extension services, credit and research, and institutional and infrastructure develop- ment. Because of the high emphasis placed on infrastructure in the past (see Chapter IV), the link between additional investment in infrastructure and agricultural development is likely to be weak, and more direct measures to raise agricultural productivity are now needed. Recent changes in the structure of public expenditure reflect a growing awareness of this matter (see Chapter V). - 15 -
III. INDUSTRY, TOIJRISMI AND HUMAN RESOURCES: STRATEGY AND P'ROSPECTS
A. Industry
3.01 Industry in Western Samoa has probably accounted for less than 15% of GDP and a s...aller proportion of total employment. Manufacturing consists mostly of food processing and consumer and light metal import-substituting industries. The Government passed an Enterprises Incentives Act in 1965 and an Industrial Free Zone Act in 1974, providing tax incentives and fiscal benefits to encourage the establishment of industries; but there has been only a moderate response to these measures./l The industrial development strategy offers incentives to foreign and domestic private firms with special consideration given to those firms which will process local products or provide import substitutes. There is limited scope for expansion of indus- trial activities in Western Samoa because of a limited domestic market, the country's isolated geographic location and the high costs of transportation. The best prospects for industry are small-scale, relatively labor-intensive operations, like clothing, furniture, small tools and boat manufactures.
3.02 Industrial activity increased in 1978. A brewery started production, and construction commenced on cigarette and match factories. A livestock feed mill and a copra crushing mill are also being set up.
B. Tourism
3.03 Tourism has become increasingly important to Western Samoa as a source of foreign exchange; both tourist arrivals and earnings have more than doubled since 1970. Tourist earnings fell somewhat in 1975 and 1976 but they have now recovered./2 However, net receipts from tourism are likely to be only one-half of the gross receipts because of the country's high propensity to import, and particularly its substantial food imports.
3.04 Although the growth of tourist trade is to some extent beyond its control, the Government has a conservative attitude with respect to the promotion of tourism, as it is wary of the cultural and social disadvantages of a rapidly expanding tourist trade. The Government plans to limit the country's growth in tourist trade to a level that is not disruptive to local customs. The current tourist facilities are considered adequate to accom- modate tourist activity until 1980, when visitors are expected to number about 85,000 annually./3
/1 As of January 1976, there were 39 firms approved under the Enterprises Incentives Act, 31 of which were in operation, employing about 1,200 people, and 7 firms were under construction. During 1976, a dozen more enterprises registered.
/2 Tourists come mainly from the United States, American Samoa, New Zealand and Australia. An estimated 15-20% of the Pacific area tourist trade passes through Western Samoa.
/3 Hotel capacity is about 350 beds. - 16 -
Table 6: TOURISM, 1966-76
1966 1968 1972 1974 1976
Gross earnings from tourism (WS$'000) 205 444 1,876 3,216 2,628
Ratio of tourist earnings to exports of goods and services (%) 4 8 26 26 28
Number of touristsja n.a. n.a. 29,880 27,985 45,741
/a Including cruise passengers.
Sources: Annual Statistical Abstract, 1969 and 1972, Department of Statistics, Western Samoa, and Western Samoan authorities.
C. Human Resources
3.05 Population. Over the past 20 years, there has been a dramatic decline in population growth rates due to a reduction in fertility and, more importantly, to an increase in emigration. A family planning program was started in 1971 under the auspices of the World Health Organization (WHIO) and with cooperation of the local National Council of Women. From 1971 to 1976, the crude birth rate dropped from 37.7 to 35.0, and, with improved maternity care, infant mortality from almost 50 to under 40 per thousand live births in 1974 (Tables 1.1 and 1.2, Statistical Appendix). With the termina- tion of WHO's participation in family planning, there is some concern in the Department of Health that there will be a shortage of funds to continue the family planning program. The Third Five-Year Plan makes no explicit provision for this program. Especially in view of the recent decrease in emigration (para. 3.06), population pressure may become an important issue in the future, and the Government should ensure that the success of the early 1970s in family planning is continued.
3.06 Migration and Employment. Net emigration, mostly to New Zealand and American Samoa, has been an important factor in Western Samoa for several reasons. First, it has been a significant portion of the population, amount- ing to more than 2-1/2% of the total population in some years, and has there- fore kept down overall growth rates (Tables 1.2 and 1.3, Statistical Appendix). Second, it has contributed to a high dependency ratio./l Third, remittances from nonresidents have made a significant contribution to foreign exchange earnings in recent years, and have been the equivalent of about 40% of the value of receipts from exports of goods and services.
/1 According to the 1976 census, the ratio of the number of persons under 15 and over 60 to persons between 15-60 amounted to 1.12. - 17 -
3.07 In 1975, New Zealand placed a limit on the number of people from Western Samoa who could apply for permanent residence./I The consequent reduc- tion in emigration from Western Samoa resulted in an increase in the active population, as well as a reduction in personal remittances. Because of the strength of the extended family system, this reduced emigration did not immediately result in an increase in overt unemployment but, for -villages, this means greater pressure to support more family members with a reduced or stable cash income from abroad. Although there are no figures on unemploy- ment, open unemployment may have increased in recent years because of the tendency for job-seekers to settle in Apia rather than return to their villages. In contrast to the situation between 1972-74, the net outmigration of Samoans in the 15-29 age group has been less than the net addition to the population in that age group since 1975. Thus, unless the foundation for an increasing diversification of the economy is laid, initially through the creation of a more efficient agriculture at the village level, unemployment among the educated young, particularly in the greater Apia area, could become a serious problem.
3.08 Education. The country's educational structure is based upon nine years of primary schooling. Post-primary education branches into a three-year junior-high system, or into one of the government colleges, which provide a four or five-year course of study. Facilities for vocational and technical training are provided at: the Teachers Training College, which offers a three- year course; the Technical College, which offers a two-year course in commercial and technical subjects; and the South Pacific Regional College of Tropical Agri- culture, which offers both diploma and degree courses. In addition, facilities exist for the training of nurses.
3.09 Of the many objectives of the Government's educational policy, three are particularly noteworthy. First, expansion of secondary school facilities. While all children receive nine years of primary education, and a high proportion of those who complete primary education enter secondary schools, the number of students passing university entrance examinations is very limited. Second, an increased supply of qualified teachers. In order to improve the availability of trained teachers for junior high schools, a course to train secondary school teachers was introduced recently. Third, to make technical education more widely available, by increasing the emphasis on vocational subjects at secondary schools and expanding enrollments at the Technical College. With about 80% of students leaving school each year returning to their villages, there is a clear need to correct the bias in favor of academic subjects.
3.10 Health. In rural areas, health services are provided through 15 district hospitals and 9 dispensaries. Monthly village clinics held by district nurses have also improved the accessibility of health facilities to
/1 The limit was 1,500 persons per year. Emigration from Western Samoa, most of which goes to New Zealand, was two to three times this limit in recent years. - 18 - the rural population. Besides providing health services to the urban popu- lation, the Apia General Hospital is also the country's referral center. Out of Western Samoa's in-patient capacity of about 650 hospital beds, about 300 are located at the Apia General Hospital, with the balance distributed between the 6 district hospitals of Savai'i and the 9 district hospitals of Upolu.
3.11 There are no serious endemic diseases in Western Samoa. The extent of malnutrition is difficult to determine, but a recent survey found that about 15% of pre-school children (aged under 5) and 11% of primary school children were affected by malnutrition.
3.12 The main constraints on the improvement of the quality of health services are a shortage of doctors and a changing pattern of diseases. While infectious diseases such as tuberculosis and typhoid have been brought under control, the incidence of heart diseases, diabetes and obesity is increasing. This trend has implied a need to reorient medical skills and to acquire costly new equipment. - 19 -
IV. DEVELOPMENT PLANNING
4.01 Five-year development plans have been introduced since 1966. But the lack of national accounts has precluded the specification of macroeco- nomic objectives quantitatively. In the absence of targeted growth rates, the plans have been expressed in terms of broad objectives and specific projects, with primary emphasis appropriately placed on the need to rehabili- tate and diversify agriculture, to increase export volumes, and to improve infrastructure. The results have been mixed. Implementation of some of the proposed projects has been quite successful and a few have exceeded the intended scope, while others were never carried out. In spite of the expressed concern for the need to focus on agriculture, the expenditure over the years 1966-74 was heavily weighted toward traditional infrastructure such as roads, airport and port development. Because the projects were not accompanied by adequate direct assistance for the agricultural sector, they have had little impact on increasing agricultural production. The Third Five Year Development Plan, 1975-79, is the most ambitious and promising of the three in terms of its emphasis on and commitment to rural development, although it lacks a detailed strategy for long-term development.
4.02 The first five-year plan, Western Samoa's Economic Development Programme, 1966-70, consisted of a list of 37 projects, for an estimated cost of WS$2 million in constant 1966 prices, with the heaviest investment, or more than 60% of the total, allocated for agricultural projects: coconut planting and replanting, cocoa and banana planting, introduction of new vege- table crops, agricultural research and land development schemes, including a resettlement component. Other proposed projects included investment in a resort hotel, road construction on Upolu and Savai'i, and water supply facili- ties for a number of villages. The level of planned expenditure was very modest because the Government relied mainly on local financing./l By the end of 1970, WS$4.8 million (in current terms) had been spent on capital and development expenditure, about 20% of which was financed by foreign soutces, and the remainder mainly from the surplus on the Government's current account./2 Of the total, only 23% went for agricultural projects as compared to 64% for infrastructure (Table 7). Of the agricultural proj- ects listed in the first plan, the coconut scheme was the most noteworthy in that 36,000 acres (about one-third of current plantings) were planted or replanted. The main accomplishment of the first five-year plan, however, was in infrastructure, where a number of principal and access roads were built, the wharves in Apia and Asau were completed, and supplies of water and electricity were expanded.
/1 About 20% of the total five-year expenditure was to be financed by foreign sources.
/2 The level of development spending was greater than planned partly because of more favorable trends in current revenues and expenditures than had been projected. Current revenues grew somewhat faster (at 9% per annum) than the projected 7% per annum over the planning period, due mainly to increased duties on imports. At the same time, current expenditures did not expand as quickly as anticipated. - 20 -
Table 7: DEVELOPMENT EXPENDITURE BY SECTORS /a (Percentages)
First Plan Second Plan Third Plan 1966-70 1971-75 1975-79 Planned Actual Planned Actual /b Planned Actual
Agriculture 61.8 22.9 20.7 21.9 28.3 n.a. Industry and tourism 11.6 - 0.7 - 10.7 n.a. Education and health 2.5 0.8 11.9 12.3 12.9 n.a. Infrastructure 21.1 64.3 56.1 60.0 42.8 n.a. Other 3.0 12.0 10.6 5.8 5.3 n.a.
Total 100.0 100.0 100.0 100.0 100.0 n.a.
/a Planned expenditures were expressed in constant prices, and informa- tion on actual expenditures exists only in current prices.
/b Actual expenditure based on 1971-74 only.
Sources: Planned expenditures: Economic Development Board, Western Samoa's Economic Development Program, 1966-1970, September 1966; Department of Economic Development, Second Five-Year Development Plan, 1971-1975, November 1970; and Department of Economic Development, Third Five-Year Development Plan, 1975-1979, November 1975. Actual expenditures: Table 2.4, Statistical Appendix.
4.03 In 1971, at the beginning of the Second Five-Year Plan, there was still a great need to upgrade, expand and diversify agricultural production. In spite of an explicit recognition that this need reflected one of the major constraints to economic development of the country, the emphasis of the Second Plan was placed primarily on infrastructure, which was to receive 56% of planned expenditure (Table 7). The Second Plan was more ambitious than the first, with a level of total planned expenditure for the five years at WS$15.8 million in 1970 prices, with 53% of the resources to come from foreign loans and another 25% from external aid, grants or supplier credit. During the Second Plan, however, a progress review indicated that the targets had been too ambitious and, with the additional problems of high inflation /1 and a worsening external sector, the Government decided to shorten the span of the Second Plan and begin work on a Third Five-Year Plan, to cover the years 1975-79. Actual expenditure for 1971-74, in current terms, was less than planned expenditure expressed in 1970 prices. Of the projects proposed in the Second Plan, those relating to infrastructure and financed by foreign sources were more successfully implemented than were those designed to increase agricultural production. As a result, the infrastruc-
/1 In 1973, prices increased at a rate of 24%, compared to an average of less than 6% during 1970-72. See Table 5.2, Statistical Appendix. - 21 - tural network was expanded and improved with construction of the airport, a primary road on Upolu and an inter-island vehicular ferry service, while the agricultural sector continued to show no improvement in yields, production levels, or export volumes.
4.04 The Third Five-Year Development Plan for 1975-79 is far more ambitious than the previous two plans, with a projected total expenditure of WS$44.4 million in 1974 prices, about 25% of which is to be financed from domestic sources. The share of agriculture was raised from 21% for the Second Plan to 28%; this represents a substantial increase in absolute terms in view of the large expansion in the Plan size (Table 7). Whereas in the previous two plans the agricultural program consisted principally of crop replanting schemes, the strategy of agricultural development in the Third Plan involves an innovative approach. As explained in Chapter II, the major emphasis is on smallholder production through village participation in the Village Development Program (VDP), and on large-scale development through Western Samoa Trust Estates Corporation (WSTEC) and Samoa Forests Products Ltd. (SFPL). In addition, the strategy is oriented toward rehabilitation of existing cultivation, where there is much room for improvement, as well as toward the development of new areas, principally on Savai'i. About one-half of the planned expenditure in infrastructure is directed toward the benefit of the rural population through improved roads, and increased water supply and electricity.
4.05 Given the serious deficiency of statistics and technical manpower, comprehensive planning may neither be feasible nor appropriate at the present time. However, with the recent growth of the public sector, the planning of public expenditures has assumed greater significance and a more detailed public sector plan than hitherto would be highly desirable for 1980-84. To be operationally meaningful, such a plan will have to emphasize the project content, and its proposed financing pattern would need to include a broad strategy for raising the required domestic resources. - 22 -
V. PUBLIC EXPENDITURES AND MOBILIZATION OF SAVINGS
A. Public Expenditures and Their Financing
5.01 The most striking recent fiscal trend has been the rapid growth in Central Government development expenditures./l The allocation of a growing share of development expenditures to the agricultural sector also stands out. The expansion in the Government's developmental activities has been made possible by a substantial increase in the flow of both foreign grants and loans. The budgetary surplus on the current account, having remained virtually static in the early seventies, showed significant improvement in 1977 and 1978. The channeling of substantial private resources to the public sector through the establishment of a National Provident Fund (NPF) has been the most significant development in the sphere of domestic resource mobilization.
5.02 Development expenditures have expanded at an impressive pace since 1973, growing from WS$5.3 million in 1973 to WS$22.8 million in 1978, or at an average annual rate of over 30% in current prices (Table 8). In real terms, this implies an average growth rate of 24% annually. This rapid growth is to be primarily explained by the low level of develop- ment spending in the early 1970s and an acceleration in the country's development effort since 1975. Infrastructure was allocated one-half of the development expenditures in 1978, with agriculture receiving the second largest allocation (30%); the shares of education and health were 2.6% and 4.5%, respectively. Over the five-year period 1973-78, current expenditures grew at an average annual rate of 19% in current terms and at 10% in constant prices. Apart from administration, which absorbed about one-quarter of current expenditures in 1978, the major claimants for current expenditures are education (20%), health (19%), and transport and communications (10%).
5.03 The high priority accorded to agricultural development by the Government in recent years emerges clearly in the structure of develoment expenditures. The growth of development expenditures on agriculture, from WS$1.8 million in 1975 to WS$6.9 million in 1978, has raised the share of agriculture in total development expenditures from 20% to 30% (see Table 2.5, Statistical Appendix). The importance of agriculture in the country's economic and social development requires that this trend be continued over the next few years.
/1 The public sector in Western Samoa consists of the Government and public enterprises, including the marketing boards, WSTEC and SFPL. This section is concerned only with Central Government finances. - 23 -
Table 8: SU1MtARY OF GOVERNMENT FINANCES, 1966-78 (WS$'000)
1966 1970 1973 1974 1975 1976 1977 1973 estimates
Current revenues 3,561 5,043 6,843 9,396 10,549 12,466 17,707 18,956 Current expenditure 3,220 4,022 5,835 6,815 8,776 10,610 13,005 14,040
Current surplus/deficit (-) 341 1,021 1,008 2,851 1.773 1,856 4,702/a 4,916
Capital and development expenditure 832 1,430 5,261 6,158 9,290 11,099 15,625 22,807
Overall surplus/deficit (-) -491 -409 -4,253 -3,577 -7,517 -9,243 -10,923 -17,891
Financing (net) Domestic borrowing 341 -252 1,794 699 2,069 2,340 1,820 3,201 Foreign borrowing 150 661 559 938 2,348 2,633 3,203 6,130 Project aid grants /b n.a. n.a. 1,900 1,970 3,100 4,270 5,900 8,560
/a Including an unusually large cash grant of WS$ 2.3 million.
/b Until 1973, no estimates of project aid grants are available. Capital and development expenditures up to this time are therefore somewhat understated.
Source: Table 2.1, Statistical Appendix.
5.04 The growth in development expenditures was accompanied by a substantially increased reliance on external finance. From 1973 to 1978, the share of external resources in the financing of development expenditures rose sharply, from 47% to 64%, while that of domestic resources fell from 53% to 36%. In absolute terms, project grants rose from WS$1.9 million to WS$8.6 million and soft term loans from WS$0.6 million to WS$6.1 million, resulting in close to a six-fold increase in total external financing. Despite this, the relative share of domestic financing over the Third Plan period 1975-79 is estimated at one-third, or higher than the ratio of one- quarter projected in the Plan. The bulk of the domestic finance comes from current account surpluses and the NPF.
5.05 Current revenues (tax and non-tax) have tended to grow at a slightly higher rate than current expenditures, while tax revenues and current expendi- tures grew at about the same rate between 1973-78. Growth in both tax and non-tax revenues contributed to the sharp improvement in Government saving in 1977/78. The expansion of tax revenues in 1978 reflects a strong expansion in imports, improved administration and enforcement of income tax and the effect of two new taxes, a foreign exchange levy and an export - 24 - surcharge, introduced in August 1977./I The foreign exchange levy and and export surcharge are expected to yield WS$360,000 and WS$350,000, respectively, in 1978. The improved contribution of non-tax revenues to the budget is attributable to the introduction of higher postal, telegraph and telephone charges; this resulted in a sizable increase in the operating surpluses of many Government departments.
5.06 The country's tax structure is relatively simple. Most import duties range between 40-50%, with lower rates on some basic foodstuffs and higher rates on commodities such as clothing (60%) and automobiles (115-135%). The average rate of import duty (import duty collections as percent of imports) is 30%. Income taxes are levied on companies as well as indi- viduals. However, income derived by primary producers from farming is not taxable; legislation introduced in 1974 exempted such income until December 31, 1984. Under the individual income tax, besides the basic personal and spouse allowances, the major allowances relate to children, contributions to life insurance and superannuation schemes, and school fees; marginal tax rates rise from 5% on the first WS$1,000 of chargeable income to 50% on chargeable income in excess of WS$10,000. The rates of business income taxes on resident and non-resident companies are 42% and 48%, respectively. Estate and gift taxes are also levied, and an excise tax on the domestic production of beer was introduced recently.
5.07 The NPF has greatly extended the domestic borrowing opportunities from non-bank sources. Established in 1972, the NPF provides compulsory social security coverage for all wage and salary earners. Contributions amounting to 10% of wage earnings are divided equally between the employer and employee. The greater proportion of the Fund resources are invested in Government securities, but some funds have been made available to the Develop- ment Bank of Western Samoa and the private sector. About 35,000 members contribute WS$2 million to the Fund annually.
5.08 Failure to sustain the recent progress in raising the level of Government saving could seriously hamper the country's development efforts. The recent growth in development expenditures is bound to have large recurrent expenditure implications in the future. Furthermore, the required strategy for agricultural development will also raise current expenditures on agriculture markedly above the present low level. At the same time, the investible surplus from the NPF is likely to grow only modestly each year because while contributions will increase in line with the growth in money incomes, benefit payments will also tend to expand. Therefore, if the availability of domestic finance is not to constrain development over the long-term, the tax structure would need to be made more product:Lve and elastic, and the scope for raising non-tax revenues fully utilized.
5.09 The most promising possibilities for raising additional tax revenues would appear to be a continuing improvement in the administration of income tax, widening of the coverage of income tax and introduction of a broadly-based
/1 The foreign exchange levy is imposed at the rate of 1% on all sales of foreign exchange by banks. The export surcharge is imposed at the rate of 7% on the excess of export prices over WS$800 per ton for cocoa and WS$100 per ton for copra. - 25 - consumption (turnover tax). The exemption granted to primary producers greatly limits the scope of income tax and should not be extended when it expires. Its retention will become increasingly costly in terms of the revenue foregone, and will force the Government to adopt forms of taxation that are less equitable and more distortionary than an income tax. A consumption tax will facilitate a separation of revenue and protective considerations and could be used to raise sizable revenues. However, given Western Samoa's small industrial sector, the advantages of a consumption tax could be secured through a combination of higher import duties and selective excises. The decision should, therefore, be based on administrative considerations. But irrespective of the means chosen to raise more revenue from indirect taxation, greater differentiation between tax rates on necessities and luxuries would be desirable.
5.10 Continued restraint on the growth of current expenditures will also be essential if sufficient Government savings are to be realized. In this connection, it would be desirable to incorporate extra-budgetary operations in the budget. At present, development expenditure includes budgeted amounts that are subject to parliamentary approval and extra-budgetary amounts that are financed by foreign project grants and loans. The inclusion of all development expenditures in the budget irrespective of their sources of finance would, besides making a fuller parliamentary scrutiny of development expenditures possible, facilitate a proper consideration of the recurrent expenditure consequences of new projects. This is particularly important in view of the growing utilization of foreign financing.
B. Evolution of the Financial Structure
5.11 Recent development of Western Samoa's financial structure has been characterized by diversification. Until a few years ago, the Bank of Western Samoa, as the country's only commercial bank, provided both short-term and longer-term credit, besides performing many central banking functions. In October 1974, the Development Department of the Bank of Western Samoa was established as an independent bank, the Development Bank of Western Samoa, to channel loans to the agricultural sector. The Development Bank's capital of WS$2.1 million has come mainly from grants from the governments of Western Samoa, New Zealand and Australia, and loans from the Asian Development Bank. The Monetary Board was inaugurated in early 1975 to take over some of the central banking functions from the Bank of Western Samoa. A second commercial bank, the Pacific Commercial Bank, commenced operations in August 1977. Finally, two Government-owned insurance companies were established in 1977; the Western Samoa Life Assurance Corporation took over the life insurance business of a New Zealand-based insurance company whereas the National Pacific Insurance Company specializes in nonlife insurance. The country's financial system is now well-placed-to play an active role in meeting the economy's varied credit needs as well as in the mobilization of domestic savings.
5.12 lWhile the Bank of Western Samoa has had considerable success in tapping local savings, its sectoral allocation of credit has always left much to be desired. With about 90% of its total lending to the private sector going to commerce, construction and personal overdrafts in most years, the needs of agriculture and industry have not been adequately met. The Develop- ment Bank of Western Samoa has moved quickly to ameliorate the situation. - 26 -
The Development Bank's loans outstanding increased from WS$600,000 (extended by the Development Department) in 1974 to WS$4.9 million in 1978; of this latter amount, WS$2.5 million was for agriculture and WS$2 million was for industry. Loan approvals suggest that the Development Bank has also succeeded in raising the amount of lending to smallholders and in extending the maturity of loans. Thus, small loans (under WS$500) approved increased from WS$242,000 in 1974 to WS$586,000 in 1978, and longer-term (over 5 years) loans approved as a percentage of total approved rose from below 20% to almost 35%. Provided the repayment situation is not permitted to get out of hand, the Development Bank will have a critical part to play in the implementation of the development strategy for the agricultural and industrial sectors, and in particular in the modernization of agriculture.
5.13 The structure of interest rates, last revised in April 1974 and currently under review, is at a low level relative to recent rates of infla- tion, and has tended to give a negative real return to savers (Tables 4.4 and 5.2, Statistical Appendix). Despite this, savings deposits with the Bank of Western Samoa and the Post Office have grown rapidly both in money and real terms (Table 9). This is not surprising in view of the limited range of
Table 9: PRIVATE SAVINGS AND TERM DEPOSITS, 1972-77 (WS$'000)
Post Office Bank of Western Samoa Savings Bank Term Savings Total
1972 656.7 422.5 1,142.7 2,221.9 1973 700.7 653.4 1,462.2 2,816.3 1974 870.6 916.5 1,643.7 3,430.8 1975 832.7 1,066.3 1,735.8 3,634.8 1976 858.0 1,763.7 1,828.4 4,450.1 1977 790.3 2,089.0 2,429.0 5,308.3
Sources: Quarterly Statistical Bulletin, July-September 1977; and Western Samoan authorities. available savings instruments and the fact that high rates of inflation have prevailed over a relatively short period. However, no conclusions about the long-term responsiveness of savings to real rates of return can be drawn from such limited experience. In its review of the interest rate policy, the Government would also need to consider the possible effects of low or negative real interest rates on the composition of investment and on the distribution of incomes. The latter are likely to be significant in a country such as Western Samoa. Low or negative real interest rates will tend to transfer real resources from the poor to the rich since the bulk of the savings are likely to come from low-income households whereas the greater proportion of loans will go to those in higher income groups. There is some evidence to suggest that the savings habit is widespread in Western Samoa and that the small saver is important. Private savings accounts with the Bank of Western Samoa and the Post Office in 1976 numbered 44,000 and 36,000 respectively; the average balance was only WS$40 at the former and WS$25 at the latter. - 27 -
VI. THE EXTERNAL SECTOR
6.01 Western Samoa s balance of payments largely mirrors developments in the agricultural sector. The stagnation in export volumes has meant growing trade and current account deficits. The deficit on merchandise trade rose from about WS$6 million in 1970 to WS$22 million in 1977 (Table 10). While the current account deficit increased from WS$3.65 million to WS$7.85 million over the same period, the deficit exclusive of official trans- fers, which has greater economic significance, almost quadrupled, from about WS$4 million to WS$15.6 million.
Table 10: BALANCE OF PAYMENTS, 1966-78 (WS$ million)
1966 1970 1972 1974 1976 1977 1978 provisional estimates
Current Account Exports 3.33 3.47 3.49 7.67 5.35 12.03 9.20 Imports 5.73 9.79 15.59 17.45 23.63 34.19 39.00 Trade (net) -2.41 -6.32 -12.10 -9.78 -18.28 -22.16 -29.80 Services (net) 0.88 0.68 1.53 1.18 1.40 2.00 3.00 Private transfers (net) 0.99 1.70 1.99 4.30 4.10 4.60 7.80 Official transfers (net) 0.07 0.29 0.82 2.22 4.74 7.71 10.00
Balance on Current Account -0.47 -3.65 -7.76 -2.08 -8.04 -7.85 -9.00
Capital Account
Private (net) /a -0.10 3.06 5.33 1.78 3.92 7.80 n.a. Official (net) -0.14 1.04 0.73 1.43 3.27 2.90 5.00
Balance on Capital Account -0.24 4.10 6.06 2.21 7.19 10.70 5.00
Change in reserves (- increase) 0.71 -0.44 1.70 -0.13 1.85 -2.93 4.00
/a Includes errors and omissions.
Sources: Table 3.1, Statistical Appendix; and mission estimates.
6.02 Copra and cocoa exports have traditionally accounted for about three-fourths of merchandise export earnings, and the remainder have come mainly from exports of bananas until 1971, and from timber and taro there- after (Table 11). Because of its dependence on only two commodities for the most of export earnings, the country has been particularly vulnerable to changes in world prices and to fluctuations in domestic supplies from changes - 28 - in weather conditions. Stimulated by highly favorable prices for cocoa and strengthening of copra prices, export volumes of both cocoa and copra rose by over 50% in 1977. Largely as a consequence of this, earnings from merchandise exports grew by 125%. However, export receipts fell by almost one-quarter in 1978 as export volumes of copra and cocoa declined by an estimated one-third and one-half, respectively, due to bad weather; nevertheless, the export receipts for 1978 are still expected to exceed those for every year except 1977.
Table 11: MERCHANDISE EXPORTS, 1966-78 (WS$'000)
1966 1970 1972 1974 1976 1977 1978 estimates
Copra 1,643 1,366 1,379 4,658 1,894 4,871 3,370 Cocoa 1,209 1,036 896 1,872 2,229 6,043 2,600 Bananas 158 535 201 127 145 52 n.a. Timber - - 331 375 64 201 n.a. Taro - - 184 318 363 360 n.a. Manufactured and/or ) processed goods ) 286 479 395 193 526 501 3,230/a Other ) 129 128
Total 3,295 3,417 3,386 4,001 5,349 12,028 9,200
/a All commodities other than copra and cocoa.
Sources: Table 3.2, Statistical Appendix; and mission estimates.
6.03 Despite the surge in export earnings in 1977, the current account deficit remained at the previous year's level because of a sharp increase in imports. Imports amount to about 35-40% of GNP. Imports grew at an average annual rate of 20% in current prices between 1970-77, but their annual growth in constant prices was probably limited to 5%. Apart from a rise in the relative share of fuel imports, from 4% of total imports in 1970 to about 10% currently, the structure of imports has remained relatively stable in recent years. Food imports, one-half of which are meat and cereals, account for about one-third of total imports. The relative shares of machinery (including transport equipment) and manufactured goods are 20% and 30%, respectively.
6.04 New Zealand has been the country's most important trading partner, accounting for approximately 30% of Western Samoa's imports and exports. West Germany accounts for most of the rest of export purchases, and Australia and Japan are the other major suppliers of imports.
6.05 Earnings from tourism and personal remittances have significantly supplemented receipts from merchandise trade. Tourist receipts, which declined somewhat in 1975 and 1976 as a consequence of the worldwide recession, recovered in 1977. Personal remittances, which have increased from WS$1.3 - 29 - million in 1966 to WS$4--5 million in recent years, have now stabilized after having fallen in 1975 and 1976 because of restricted immigration to New Zealand.
6.06 The growing deficits on the current account have been primarily financed through official grants and soft loans, although inflows of private capital have also recorded a steady increase. Official tiansfers more than doubled during 1973-76 and reached a high level of WS$7.7 million in 1977. While the bulk of such assistance comes from Australia and New Zealand, Denmark and the Euiropean Development Fund have also provided grants recently. There has also been increasing reliance on soft-term loans, from both multilateral sources such as the Asian Develop- ment Bank and the International Development Association and bilateral sources, particularly New Zealand. In addition, an interest-free loan of US$1.6 million has been obtained from the OPEC Special Fund. Net inflow of official loan capital amounted to WS$3 million in 1977. Partly because the net inflows of public and private capital were not sufficient to finance current account deficits in some years and partly because of the growth in the value of imports, international reserves have declined from their high of the equivalent of about nine months of imports in 1971 to about two-and-a-half months of imports in 1977.
6.07 Western Samoa's external public debt (including publicly guaranteed) outstanding amounted to US$24 million in December 1977. Debt service payments in respect of this debt have grown from WS$100,000 in 1966 to an estimated WS$700,000 in 1976, equaling about 8% of receipts from exports of goods and services in 1976. Although the present debt service ratio is moderate, because of the wide imbalance between the country's imports and exports (in relation to GNP) and large fluctuations in its export receipts, it is desirable that virtually all of Western Samoa's external public capital requirements should continue to be met through grants and loans on conces- sional terms.
6.08 Export price projections for the country's exports suggest that, unless export volumes of copra and cocoa can be maintained at a high level, it will be difficult to avoid a further significant deterioration in the current account balance over the next two to three years. Continued buoyancy in copra prices is expected, but cocoa prices are likely to decline further from their high 1977 level.
6.09 The exchange rate for the Western Samoan tala has been pegged to the New Zealand dollar since October 1975, and the exchange rate between the tala and other foreign currencies determined daily on the basis of the relationships of those currencies to the New Zealand dollar. Apart from a minor adjustment in the tala/New Zealand exchange rate following the introduction of the foreign exchange levy in August 1977, from WS$0.7600 to WS$0.07638 per New Zealand dollar, the relationship between the tala and New Zealand dollar has remained constant since December 1976. This has resulted in an appreciation of the tala against the currencies of the country's other major trading partners. The tala has appreciated by about 15% against the US$ since December 1976, and adjustments of a - 30 - similar magnitude have occurred with respect to other currencies. While this has kept down the cost of imports, and thereby moderated the rate of domestic inflation, its implications for the profitability of agricultural production need to be carefully examined.
6.10 The structure of, as well as recent trends in, Western Samoa's balance of payments have a clear long-term implication. While small, low- income island economies tend to have large resource gaps (the excess of import of goods and services over their export as percent of GNP), it will be unrealistic for the country to assume that its present unusually large resource gap of about 25-30% of GNP can be maintained indefinitely. The balance of payments picture, therefore, also underlines the need to tackle the problems of the agricultural sector with a sense of urgency and deter- mination. STATISTICAL APPENDIX
Table No. Title
Population and Employment
1.1 Total Population and Population Growth, 1900-77 1.2 Population Characteristics, 1961-76 1.3 Net Emigration from Western Samoa, 1951-77 1.4 Employment by Sector, 1966-76
Public Finance
2.1 Budgetary Operations of Government, 1966-78 2.2 Current Receipts of Government, 1966-78 2.3 Current Expenditures of Government, 1966-78 2.4 Appropriated Capital and Development Expenditures, 1966-74 2.5 Total Capital and Development Expenditures, 1975-78
External Sector
3.1 Balance of Payments: Consolidated Accounts,1966-77 3.2 Exports of Selected Commodities, 1966-77 3.3 Composition of Imports (c.i.f.), 1966-77 3.4 International Reserves, 1970-78 (September) 3.5 External Public Debt as of December 1977
Money and Banking
4.1 Money Supply and Its Determinants, 1966-78 (September) 4.2 Loans and Advances of Commercial Banks, 1971-78 (September) 4.3 Loan Operations of the Development Bank of Western Samoa, 1974-78 4.4 Structure of Interest Rates
Prices
5.1 Consumer Price Index, 1972-78 (September) 5.2 Annual Price Increase, 1966-78 (September)
Table 1.1: TOTAL POPULATION AND POPULATION GROWTH RATES, 1900-77
Average annual growth rate Year Total population over a five-year period
1900 32,815 n.a.
1911 33,554 n.a.
1926 40,231 2.0
1936 55,946 3.1
1945 68,197 2.3
1951 84,909 3.7
1956 97,327 2.8
1961 114,427 3.3
1966 131,377 2.8
1971 146,627 2.2
1976 151,983 0.7
1977 152,672 (preliminary) 0.3
Sources: 1900-61, Western Samoa's Economic Development Programme, 1966-1971, Economic Development Board, September 1966, Table 1.
1966-71, Third Five Year Development Plan, 1975-1979, Department of Economic Development, Western Samoa, November 1975, Table 1, Appendix.
1976-77, Western Samoan authorities. Table 1.2: POPULATION CHARACTERISTICS, 1961-76
Intercensal periods 1961-66 1966-71 1971 1974 1976
Crude birth rate 44.3 41.6 37.7 36.7 35.0
Crude death rate 8.2 6.5/a 7.6 7.0 7.0
Natural growth rate 3.6 3.5 3.0 3.0 2.8
Net outmigration 0.8 1.3 2.1 2.7 0.7
Annual growth rate 2.8 2.2 0.9 0.3 2.1
Infant mortality n.a. n.a. 49.5 39.9 n.a.
/a May be an underestimate.
Sources: Western Samoa, Annual Statistical Abstract, 1975; and Quarterly Statistical Bulletin, 3rd Quarter, July-September 1977, Department of Statistics. Table 1.3: NET EMIGRATION FROM WESTERN SAMOA, 1951-77
Number of persons per Year calendar year
1951-54 (average) 381
1955-59 (average) 656
1960-64 (average) 1,267
1965-69 (average) 1,223
1970 2,545
1971 2,951
1972 1,144
1973 3,845
1974 4,090
1975 2,480
1976 1,086
1977 1,287
Sources: Western Samoa, Annual Development Plan, 1977, Department of Economic Development, January 1977; Western Samoa, Economic Outlook for 1978, Department of Economic Development, July 1977; and Annual Statistical Abstract, Department of Statistics, 1977. Table 1.4: EMPOYMENT BY SECTOR, 1966-76
1966 (Census) 1971 (Census) 1976 (Census) '000 Share of '000 Share of '000 Share of Year persons total persons total persons total (%) (%) (%)
Agriculture /a 26.1 73,9 25.4 67.4 23.4 61.1 Village (24.0) (68.0) (22.9) (60.7) (20.7) (54.1) Other /b (2.1) (5.9) (2.6) (6.7) (2.7) (7.0)
Manufacturing. and construction 1.4 4,0 2.4 6.5 2.5 6.7
Commerce 1.8 5.1 2.6 7.0 2.7 7.1
Transport and communications 0.8 2.3 1.2 3.3 2.1 5.4
Services 5.2 14.7 6.1 15.8 7.3 19.2
Other - - - - 0.2 0.5
Total 35,3 100.0 37.7 100.0 38.2 100.0
Population 131.4 146.6 152.0
Labor force /c 60.3 68.8 74.2
/a May be underestimated due to the exclusion of most village women from the agricultural sector.
/b Includes fishery, forestry and mining.
/c All persons 15-64 years old.
Sources: Western Samoa, Third Five Year Development Plan, 1975-79, Department of Economic Development, November 1975; and Department of Statistics, Census of Population and Housing, 1976. Table 2.1: BUDGETARY OPERATIONS OF GOVERNMENT, 1966-78 (WSs'000)
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 estimates
Current revenues 3,561 3,443 3,949 4,752 5,043 5,928 6,707 6,843 9,396 10,549 12,466 17,707 18,956
Project aid grants /a n.a. n.a. n..a. n.a. .a. .. a. n.a. 1,900 1,970 3,100 4,270 5,900 8,560 Total revenues /a 3,561 3,443 3,949 4,752 5,043 5,928 6,707 8,743 11,366 13,649 16,736 23,607 27,516
Current expenditure 3,220 3,411 3,228 3,491 4,022 4,534 5,502 5,835 6,815 8,776 10,610 13,005 14,040 Current surplus/deficit (-) 341 32 72i 1,261 1,021 1,394 1,205 1,008 2,581 1,773 1,856 4,702 4,916 Capital and development expenditure 832 673 573 1,259 . 1,430 1,612 2,984 5,261 6,158 9,290 11,099 15,625 22,807 Overall surplus/deficit (-) -491 -641 148 2 -409 -218 -1,779 -2,353 -1,607 -4,417 -4,973 -5,023 -9,331 Financing Domestic 341 518 -89 -2 -252 13 462 1,794 669 2,069 2,340 1,820 3,201 Foreign 150 123 -59 - 661 205 1,317 559 938 2,348 2,633 3,203 6,130
/a Until 1973 no estimates of project aid grants are available. Total revenues up to this time are therefore somewhat understated.
Sources: Western Samoan authorities and staff estimates. Table 2.2: CURRENT RECEIPTS OF GOVERNMENT, 1966-78 (WS$'000)
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 estimates
Tax Revenue 2,530 530 2,754 3,395 378 4,296 5,168 1 8,023 699 12,194 13,042
Taxes on income Comp.any 287 233 257 426 521 527 770 872 884 1,298 825 n.a. n.a. Individual 152 125 156 169 244 279 458 468 683 n.a. n.a. n.a. n.a. Othe-r 13 12 9 3 28 17 19 27 19 n.a. n.a. n.a. n.a.
3 6 7 2 T.tal 452 371 422 598 793 823 1,247 1, 1,586 2,151 ,18-67 2674 ,890
Taxes on international trade Implort duties 1,448 1,557 1,652 1,983 2,252 2,565 3,152 3,471 4,888 5,387 6,739 9,271 9,300 Primage duties on imports 309 320 326 386 445 509 587 455 618 458 - - Export duties 288 266 340 411 271 373 154 - - - - 151 350
4 Total 2,045 2,143 2,318 2780 2,968 3, 47 3893 3,926 5,506 5,845 6,739 9,42:2 9,650
Other taxes Business license fees 7 8 7 it 8 11 13 10 14 13 13 n.a. n.a. Other taxes 26 8 7 6 12 15 15 90 80 14 80 n.a. n.a.
Total 33 16 14 17 20 26 28 100 94 27 93 98 502 /a
4 0 7 Nontax Revenues 774 798 964 1,243 1,158 1,588 1,461 1L 1,953 2,192 3,521 3,225 5,694
Fees, service charges, etc. 271 314 350 387 431 523 555 683 785 833 910 1,227 1,560
Po priet_ay receipts
Rent, royalties, interest 181 157 152 186 276 309 321 323 290 367 375 407 645 Sales of government supplies 33 81 49 96 97 144 150 141 221 367 1,068 1,065 1,265 Operating surplus of goverinment enterprises /b 209 168 327 436 228 586 382 88 517 531 720 342 1,974 Other - not classified 79 79 87 139 126 26 53 172 140 94 202 180 250
Total 424 406 528 718 601 1,039 853 552 1,168 1,359 2,365 1,994 4,134
Grants from other governments 257 114 231 114 104 44 78 43 257 334 246 2,292 220
Total current revenue and grants 3,561 3,443 3,94_ 4,752 5,043 5,928 6,707 6,843 9,396 10,549 12,466 17,707 18,956
/a Includes WS$360,000 from the foreign exchange levy.
/b Includes only Government enterprises operating under the aegis of Government departments.
Sources: See Table 2.1. Table 2.3: CURRENT EXPENDITURES OF GOVERNMENT, 1966-78 (WS$'000)
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 estimates
General services General administration 556 779 542 642 711 1,027 1,114 1,093 1,266 1,598 2,360 3,243 3,76 Justice, police and prisons 287 295 295 317 364 364 424 520 609 741 806 895 1,069
Total 843 953 837 960 1,075 1,391 1,538 1 613 1 875 2 339 3 181 4 138 4,645
Social services Education 861 897 848 862 956 986 1,296 1,340 1,522 1,978 2,373 2,737 2,869 Health 609 655 673 691 857 903 1,033 1,171 1,332 1,939 2,039 2,490 2,659 Other 32 33 37 35 46 45 55 78 81 116 130 142 171
Total 1,502 1_,58 1,558 1,589 1,859 1,934 2,384 2,589 2,935 4,033 4,542 5,369 5,699
Economic services Agriculture 277 275 271 296 345 360 432 421 432 613 646 697 769 Land 37 46 53 69 93 103 203 213 226 257 342 349 452 Transportation, communi- cations and power 428 416 397 441 492 583 707 689 872 1,011 1,225 1,400 1,386 Other ------22 32 41 55 94
Total 742 737 720 807 931 1,046 1,342 1,323 1,552 1,913 2,255 2,501 2,701
Public debt interest 134 136 113 137 157 163 238 310 454 491 647 997 995
Total 3,220 3,411 3,228 3,491 4,022 4,534 5,502 5,835 6,815 8,776 10,610 13,005 14,040
Sources: See Table 2.1. Table 2.4: APPROPRIATED CAPITAL AND DEVELOPMENT EXPENDITURES, 1966-74 /a (WS$'000)
1966 1967 1968 1969 1970 1971 1972 1973 1974
General services General administration 39 80 18 19 21 42 107 120 71 Financial - - - - 35 - - - Justice, police, prison 1 1 - 4 5 2 6 4 22
Total 40 81 18 24 61 44 113 124 93
Social services Education 4 1 1 - - 28 148 248 324 Health 4 3 - 1 21 20 124 153 274 Other - - - 1 2 2 10 18 27
Total 8 4 1 2 23 50 282 419 625
Economic services Agriculture 120 194 190 220 302 456 582 584 662 Land 22 8 13 18 7 43 39 33 61 Transportation, communi- cation and power 492 386 351 795 1,037 869 1,968 2,121 1,788 Other 150 - - 200 - 150 - 80 50
Total 784 587 554 1,233 1,346 1,518 2,589 2,818 2,561
TOTAL 832 673 573 1,259 1,430 1,612 2,984 3,361 3,279
/a Excluding extra-budgetary expenditures financed from foreign grants and loans. Complete data on development and capital expenditures for the more recent years are given in Table 2.5.
Sources: Western Samoa, Third Five Year Development Plan, 1975-79, Department of Economic Development, November 1975; and Western Samoan authorities. Table 2.5: TOTAL CAPITAL AND DEVELOPMENT EXPENDITURES, 1975-78 /a (WS$ million)
1975 1976 1977 1978 estimates
Infrastructure 5.76 7.03 7.63 11.44
Agriculture 1.79 1.98 3.92 6.90
Other economic development 0.54 0.95 2.26 2.35
Education 0.21 0.59 0.44 0.59
Health 0.76 0.89 0.88 1.03
Other 0.16 0.06 0.51 0.49
Total 9.22 11.50 15.64 22.80
/a Expenditures financed from foreign grants and loans are estimated for all years. There are minor discrepancies between the figures given here and those in Table 2.1.
Sources: Monetary Board of Western Samoa, Annual Report for 1977; and Western Samoan authorities. Table 3.1: BALANCE OF PAYMENTS: CONSOLIDATED ACCOUNT, 1966-77 (WS$ million)
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 provisional
Cuirrent accoutnt (net) -0.47 -0.79 0.16 -0.52 -3.65 -1.97 -7.76 -4.66 -2.08 -9.78 -8.04 -7.85 Trade (net) -2.41 -2.42 -1.54 -2.56 -6.32 -4.85 -12.10 -10.24 -9.78 -17.98 -18.28 -22.16 Exports 3.33 3.21 3.96 4.84 3.47 4.70 3.49 4.13 7.67 4.54 5.35 12.03 Imsports 5.73 5.64 5.50 7.40 9.79 9.55 15.59 14.36 17.45 22.52 23.63 34.19 Services (net) 0.88 0.34 0.19 -0.04 0.68 0.70 1.53 0.65 1.18 1.17 1.40 2.00 Private transfers (net) 0.99 1.03 1.08 1.50 1.70 1.68 1.99 2.52 4.30 3.59 4.10 4.60 Official transfers (net) 0.07 0.27 0.43 -0.58 0.29 0.50 0.82 2.41 2.22 3.44 4.74 7.71 Caital_ a_count (net) -0.24 0.09 0.40 0.78 4.10 2.50 6.06 3.76 2.21 10.38 Private long-term 7.19 10.70 and other (net) /a -0.10 -0.09 0.07 0.51 3.06 1.80 5.33 1.82 0.78 7.96 3.92 7.80 Official (net) -0.14 0.18 0.33 0.26 1.04 0.70 0.73 1.94 1.43 2.42 3.27 2.90 Reserves and related items /b 0.71 0.70 -0.56 -0.29 -0.44 -0.53 1.70 0.91 -0.13 -0.60 (- increase) 0.85 -2.93
/a Includes errors and omissions.
,b Total may not equal sum of components due to rounding.
Sources: Western Samoa, Annual Statistical Abstract, Department of Statistics 1969 and 1972; and authorities. Western Samoan Table 3.2: EXPORTS OF SELECTED COMMODITIES, 1966-77
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977
Copra /a Volume (tons) 14,017 7,405 12,623 14,550 9,619 17,781 18,722 13,946 12,336 19,400 11,800 18,700 Unit value (WSS/ton) 117 125 149 124 142 114 74 118 379 135 161 260 Value (WSS'°00) 1,643 928 1,880 1,798 1,366 2,029 1,379 1,643 4,658 2,612 1,894 4,871 Cocoa Volume (tons) 2,723 3,116 2,587 3,017 2,442 2,890 1,510 1,228 1,816 1,459 1,644 2,571 Unit value (WS$/ton) 444 469 493 599 424 446 593 874 1,030 809 1,356 2,350 Value (WS$'000) 1,209 1,462 1,276 1,808 1,036 1,288 896 1,073 1,872 1,180 2,229 6,043 Bananas Volume (56 lb cases) 61,983 95,490 91,652 216,759 200,723 247,631 84,333 39,285 51,720 18,948 52,800 13,400 Unit value (WS$/case) 2.55 2.72 2.94 2.80 2.70 2.16 2.38 2.01 2.46 2.80 2.75 3.88 Value (WS$'000) 158 260 269 606 535 535 201 79 127 53 145 52 Timber ('000 ft of super board) - - - - 288 3,434 4,021 3,426 1,214 446 1,541 Unit value (WSS/'000 ft) - - 197 96 100 109 124 144 130 Value (WS$'000) - - 197 331 404 375 150 64 201 Taro Volume (72 lb cases) ------24,982 41,930 90,700 19,860 77,300 62,000 Unit value (WSS/case) ------5.52 8.49 3.51 4.78 4.69 5.81 Value (WS$'000) - - 138 356 318 95 363 360
/a Excluding copra meal.
Sources: Western Samoa, Annual Statistical Abstract, Department of -Statistics, selected years; and Western Samoan authorities. Table 3.3: COMPOSITION OF IMPORTS (c.i.f.), 1966-77 (WS$'000)
Category 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1977 provisional
Food, beverages and tobacco 2,782 2,221 2,239 2,457 2,875 3,238 4,199 4,836 6,130 7,956 10,589 of which: fish 241 316 330 330 360 456 430 559 978 751 700 meat 686 528 322 402 681 725 800 973 1,193 1,648 2,802 cereals 772 324 570 626 575 592 956 704 1,162 1,914 1,961
Raw materials 118 153 145 72 124 140 191 116 107 217 961
Fuels, lubricants, etc. 279 269 272 346 393 419 467 667 529 1,913 2,903 Chemicals 364 381 378 461 567 557 743 803 1,094 1,128 1,439
Machinery and transport equipment 582 731 651 1,402 2,489 1,834 3,302 3,253 2,696 5,160 7,446 Other manufactured goods 1,605 1,880 1,812 2,636 3,344 3,426 4,142 4,758 5,353 6,787 8,917
T_tal imports 5,730 5,635 5,497 73744 97 91 13,044 14,433 5,910 23,160 32,254
Note: Figures for 1976 are not available.
Sources: Western Samoa, Quarterly Statistical Bulletin, lot Quarter January-March, 1977. Western Samoa, Annua1 Statistical Abstract, Department of Statistics, 1975, 1976 and 1977. Western Samoa, Economic Indicators, Department of Economic Development, May 1977. Table 3.4: 'INTERNATIONAL RESERVES, 1970-78 (SEPTEMBER) (WS$'000)
Commercial Reserve Government banks' net End of position SDR Foreign sinking fund Government Total foreign In months period in IMF holdings exchange investments enterprises Government assets Total of imports
1970 - - 619 217 2,972 3,808 3,147 6,955 8.5
1971 260 - 654 301 2,922 4,137 3,346 7,483 9.4
1972 260 153 303 265 2,778 3,759 2,025 5,784 4.5
1973 259 152 186 341 1,504 2,442 2,428 4,870 4.1
1974 259 152 346 231 1,166 2,154 2,845 4,999 3.4
1975 - 33 704 218 483 1,438 4,161 5,599 3.0
1976 - 5 419 209 342 975 3,779 4,754 2.6
1977 - 24 1,151 241 366 1,782 5,498 7,280 2.6
1978 (Sept)/a - 69 491 244 1,536 2,340 1,065 3,405 -
/a Preliminary figures.
Sources: Western Samoa, Treasury Department, Statistical Tables, December 1977; and Western Samoan authorities. Table 3.5: EXTERNAL PUBLIC DEBT AS OF DECEMBER 1977 (US$'000)
Debt outstanding Type of credit at end of period /a (Disbursed amount)
Multilateral Loans 12,028.5 Asian Development Bank 8,109.3 International Development Association 2,319.2 OPEC 1,600.0
Loans from Governments 2,705.4 New Zealand 2,347.1 United Kingdom 358.3
Private Bank Credits 3,815.7 New Zealand 391.3 Eurodollar 1,200.0 Other 2,224.4
Privately Placed Bonds 3,551.4 New Zealand 3,551.4
Suppliers' Credits 1,935.9
Total External Public Debt 24,036.9
/a Provisional figures.
Source: Western Samoan authorities. Table 4.1: MONEY SUPPLY AND ITS DETERMINANTS, 1966-78 (SEPTEMBER) (WS$ '000)
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 (Sept.)
Money Supply Currency 334 332 415 475 639 758 916 1,326 1,481 1,437 1,745 1,865 1,551 Demand deposits 1,153 1,049 1,060 1,290 1,182 1,831 2,190 2,619 2,861 2,986 3,014 3,956 3,034
Total 1,487 1,381 1,475 1,765 1,821 3,106 3,945 4,342 4,423 4,759 5,821 4,635
_qu e / a 1,305 1,354 1,557 2,045 1,958 1,518 1,565 2,115 2,736 3,109 4,404 5,095 6,061 Total Liq uidity 2792 2,735 3,3 ,,810 , 671 6,060 7,078 7,532 9163 10,916 10,696
Percentage change 1.9 -2.0 10.9 25.7 -0.8 8.7 13.7 29.7 16.8 6.4 21.7 19.1 4.9/b
/a Includes time and saving8 deposits.
/b Annual rate.
Source: WeSteTn SanoaTn outhorities. Table 4.2: LOANS ANI) ADVANCES OF COMMERCIAL BANKS, 1971-78 (SEPTEMBER) (WS$ million) (Outstanding at end of period)
1971 1972 1973 1974 1975 1976 1977 1978 (Sept.) (Sept.) (Sept.) (Sept.) /a
Private Sector Agriculture 46 72 70 230 243 303 253 345 Industry - 113 116 346 199 131 184 248 Commerce 1,224 1,385 1,322 1,390 1,270 1,761 2,369 2,970 Housing and construction 296 540 898 1,425 1,480 1,253 1,978 2,603 Personal 422 469 448 669 978 1,577 1,384 2,389
Subtotal, private sector 1,988 2,579 2,854 4,060 4,170 5,025 6,168 8,555
Public Sector Government, net credit -455 -95 722 594 1,891 1,643 -90 1,450 Government enterprises, net credit - 594 411 595 322 -180 -215 505
Subtotal, public sector -455 499 1,133 1,189 2,213 1,463 -305 1,955
Total 1,533 3,078 3,987 5,249 6,383 6,488 5,863 10,510
/a Provisional figures.
Source: Western Samoan authorities. Table 4.3: LOAN OPERATIONS OF THE DEVELOPMENT BANK OF WESTERN SAMOA, 1974-78 /a (WS$' °°°)
Outstanding as of 1974-75 1975-76 1976-77 1977-78 September 30, 1978 Number Amount Number Amount Number Amount Number Amount Amount
Loans Approved Agriculture 1,407 681 2,031 871 2,622 1,361 2,746 1,436 2,472 Industry 37 280 48 253 104 1,088 137 1,686 1,965 Group projects 11 27 45 190 84 262 132 462 462
Total 1,455 987 2,124 1,314 2,810 2,711 3,015 3,584 4,899
Loans Approved by Maturity Short-term (up to 2 years) 575 578 655 827 Medium-term (2 to 5 years) 232 436 716 1,523 Longer term (over 5 years) 180 300 1,340 1,234
Total 987 1,314 2,711 3,584
/a Financial year from October 1 to September 30.
Source: Western Samoan authorities. Table 4.4: STRUCTURE OF INTEREST RATES (Percent per annum)
Interest rates as of September 1978 /a
Deposit Rates Saving deposits 4.0 Term deposits 4.0-6.5 Investment account deposits 6.0 Government securities 7.0-8.0
Lending Rates of the Trading Banks Business loans 7.0-10.0 Personal advances 8.0-10.5 Other advances Government 7.0-8.0 Churches 8.0-10.0
Lending Rates of the Development Bank of Western Samoa Agriculture 8.0-10.0 Industry 10.0-12.0
/a Effective since April 1974.
Source: Western Samoan authorities. Table 5.1: CONSUMER PRICE INDEX, 1972-78 (SEPTEMBER) (Average Prices for August 1971 to July 1972 = 100)
Clothing and Household Period Food footwear operations Miscellaneous All items
(Weight) (60.7) (11.2) (12.8) (15.3) (100.0)
1972 December 111.5 108.6 105.4 101.0 108.8
1973 December 147.5 134.2 111.8 105.4 135.0
1974 December 177.1 174.2 121.1 111.4 159.6
1975 December 171.6 180.8 122.2 118.8 158.2
1976 December 199.8 200.4 138.0 124.0 180.4
1977 September 208.9 201.5 188.5 142.4 195.3 December 210.5 195.3 193.3 142.8 196.2
1978 September 207.2 199.6 200.4 156.3 197.7
Sources: Western Samoa, Third Five Year Development Plan, 1975-79, Department of Economic Development, November 1975; and Western Samoan authorities. Table 5.2: ANNUAL PRICE INCREASE, 1966-78 (SEPTEMBER) (Percent)
Year Increase
1966 3.2 1967 -1.2 1968 2.5 1969 3.7 1970 2.9 1971 4.6 1972 8.8 1973 24.1 1974 18.2 1975 -0.8 1976 14.0 1977 8.8 1978 (September) 1.3 /a
/a Annual rate.
Sources: Western Samoa, Third Five Year Development Plan, 1975-79, Department of Economic Development, November 1975; and Table 5.1, Statistical Appendix.