Samoa - Domestic policy

Tuilaepa Sailele's long service as finance minister and deputy prime minister meant that he was largely responsible for many of his predecessor's domestic policies. He has continued to promote those policies, including the controversial implementation of a 10% value added goods and services tax in January 1994. The tax, imposed to help curb imports and correct Samoa's severe trade imbalance, led to protest marches. A 10% reduction in public service pay was almost as unpopular, but apparently not enough to keep him out of the prime minister's office.

Another policy initiated while Tofilau was prime minister, certainly based on Tuilaepa's views, was that of privatizing what had been government activities and industries. This policy was apparently triggered by the financial troubles of the government-owned national airline, which amassed losses amounting to us$40 million. Beginning in 1995, the government issued a strategic plan of partnership with the private sector. The success of a Japanese auto parts plant, Yazaki Samoa, established in 1991 and employing about 3,000 Samoans, is often pointed to as an example of what can be accomplished by utilizing market forces rather than government management. This firm accounts for 20% of the nation's manufacturing output.

Diversification is regarded as essential to cushion Samoa's economy against natural disasters affecting agriculture. Although recent growth in the fishing industry is encouraging, Tuilaepa Sailele's plan clearly looks in another direction. He intends to develop tourism as a leading industry and argues for creating the infrastructure necessary to support this expansion, including the construction of larger resort hotels. All such steps are to be taken in cooperation with private investment. The prime minister is alert to the record of shady outsiders who have taken advantage of Pacific Island nations to operate confidence schemes, sometimes fleecing governments of huge sums. He has established a system of character and credit checks to foil anyone who would try to operate such schemes in Samoa.

In his 2002–03 budget address, Tuilaepa Sailele indicated he would take steps to make Samoa more attractive to serious foreign investors. These included: providing the necessary infrastructure to support business development; maintaining the appropriate monetary policies to ensure sufficient credit for growth in the private sector; refining the tax and tariff structure to support competition; and providing assistance through duty concessions on equipment and machinery. All of these measures are designed to pave the way for the diversification of Samoa's economy, and to develop Samoa's manufacturing and service sectors.

In April 2003, as part of a public sector reform program, the government cut the number of government departments and ministries by close to 50%. Twenty-seven governmental bodies were reduced to 14, largely through consolidation.

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