Samoa Flag

Samoa Travel Guide

Fishing Boats
catamaran fishing boats at Apia


Until the mid-1990s, Samoa's economy was battered by hurricanes, agricultural decline, and government mismanagement, but in recent years the economy has grown at an annual rate of around 5 percent.

Despite the revenue collected from the 15 percent value-added tax (VAGST) initially imposed in 1994, the foreign debt has remained high at around S$500 million, owed mostly to international agencies such as the Asian Development Bank and the World Bank for infrastructure and agricultural loans.

Vast sums have been squandered on swanky office buildings in downtown Apia and a fleet of flashy Ford vans which shuttles government bigwigs around town. In 1994, Samoa's chief auditor submitted a report alleging high-level corruption and nepotism, but this was successfully swept under the carpet and the chief auditor himself was given the boot. Many government departments keep no accurate financial records and no serious audits are carried out.

Samoa's per-capita gross domestic product is US$2,500 compared to US$9,000 in nearby American Samoa. Thus many Samoans migrate to Pago Pago to seek employment in the tuna canneries, where the starting rate is US$3.60 an hour (in independent Samoa the private-sector statutory minimum wage is S$1.60 or about US$0.50 an hour). Tens of thousands of Samoans now live in American Samoa, the United States, New Zealand, and Australia, and the S$300 million a year in private remittances they send home accounts for over a quarter of the country's gross domestic product. Samoans spend S$50 million a year of it on donations to churches.

Two-thirds of the workforce is engaged in subsistence agriculture—fisheries and agriculture make up more than a third of the gross domestic product, the highest such proportion in the Pacific. Since the opening of a freezer plant in Apia in 1997, longline fishing for tuna from 10-meter alia catamaran boats has experienced a boom with over 4,000 tonnes landed each year. However, 30 local fishermen have lost their lives on these small aluminum vessels and the government is encouraging a shift to larger boats.

Only 27 percent of Samoans have non-agricultural employment, the lowest such percentage of any Polynesian country, and of these, 9,000 work for the government. Samoans have to hustle to obtain cash money, one reason why they look leaner and meaner than American Samoans (only those who have been to Tutuila will understand this comment).

In 1988, Samoa launched an off-shore banking center similar to those of Vanuatu and the Cook Islands. Foreign firms can pay a one-time registration fee that allows them to avoid taxation in their home country for 20 years (local companies are barred from participating and face strict bureaucratic regulation). Companies in Hong Kong, South Korea, Indonesia, and Eastern Europe especially, download their profits here.

In 2000, the Samoan government was forced to bring in anti-money laundering legislation to avoid being blacklisted by international regulators. In 1997, a new scam was uncovered when it was revealed that regular Samoan passports were being sold under the counter to Chinese businessmen at US$26,000 apiece. A good part of Samoa's immigration department was implicated in the scandal.

Continue to   Economy: Industry   »