Business Advantage Samoa 2011/2012 - Ministry of Commerce ...

BUSINESS AND INVESTMENT GUIDEBusiness AdvantageSAMOA2011/2012Your gateway to the Samoan economy1 www.businessadvantagesamoa.com

Surrounded by the glistening Pacific, lies Samoa.Touch down and you step back in time.You see Samoans adhere to a 3,000 year old wayof life, called Fa’a Samoa which respects family,community and visitors. No wonder it was the locationfor the Survivor mini-series.But whilst Samoan values are timeless, their facilitiesare up to date and can accommodate a board meetingfor a dozen or a conference for three hundred.Fa’a Samoa. The Samoan way.www.samoa.travel2

BUSINESS ADVANTAGE SAMOA CONTENTS4ECONOMIC UPDATEOur survey of Samoa’s business leaders brings you up-to-date withthe current state of its economy and the opportunities for doingbusiness in this picturesque South Pacific country.8INTERVIEW WITH SAMOA’S PMSamoa has led the Pacific region with pro-business reform. Samoa’sPrime Minister, the Hon. Tuilaepa Lupesoliai Sailele Malielegaoi MP,identifies the prospects for future reform.1611 PRODUCTIVE SECTORSWe profile Samoa’s manufacturing, agribusiness andfisheries sectors as Samoa prepares to accede to theWorld Trade Organisation.14 WHO’S WHO IN SAMOAN BUSINESSA handy reference to the key players and business/government organisations.22 BANKING AND FINANCEWith its International Finance Centre—the first Pacificcentre to be white-listed by the OECD—and a wellstructuredfinancial services sector, Samoa is wellplacedto service the needs of both local and offshorebusinesses.24 INFRASTRUCTURE AND TRANSPORTSamoa has done much to remove the tyranny of distanceand is increasingly becoming one of the key transportationand telecommunications hubs for the region. Improvedbroadband connectivity will also offer new businessopportunities.26 BUSINESS TRAVEL GUIDE TO SAMOAHandy tips and advice for the business traveller.QUINTESSENTIAL SOUTH PACIFICSamoa's tourism sector is emerging from the September 2009tsunami and global downturn in better shape than ever.This publication is made possible through the support of the following organisations:SAMOA TOURISM AUTHORITYMinistry of Commerce,Industry & LabourBusiness Advantage Samoa is published by Business Advantage International Pty Ltd,Level 27, Rialto South Tower, 525 Collins St, Melbourne, Victoria 3000, Australia, tel +613 9935 2977, fax +61 3 9935 2750. www.businessadvantage.coThis publication is available free online at www.businessadvantagesamoa.com.Additional printed copies can be purchased for AUD$35.00 (incl GST and postage)from the above address or by emailing info@businessadvantageinternational.com.© Copyright 2011 Business Advantage International Pty LtdProject Director: Robert Hamilton-Jones (rhj@businessadvantageinternational.com)Publisher: Andrew Wilkins (aw@businessadvantageinternational.com)Editorial: Jacqueline BennettDesign: Michael RengaCover images: Business Advantage International, kirklandphotos.com/Samoa TourismAuthority, Polynesian BluePublished in partnership with the Government of Samoa.Business Advantage would like to acknowledge the assistance and goodwill ofSamoa’s Prime Minister, the Hon. Tuilaepa Lupesoliai Sailele Malielegaoi MP andDeputy Prime Minister, the Hon. Misa Telefoni.Printed in Australia. Both printer and paper manufacturer for this publication are accredited to ISO14001, theinternationally-recognised standard for environmental management. This publication is printed using vegetableinks and the stock is elemental chlorine free and manufactured using sustainable forestry practices.About this publicationBusiness Advantage Samoa is produced regularly to provide a guide to doingbusiness in Samoa. It provides a reader-friendly overview of economic conditions,assesses business opportunities and imparts practical advice.DISCLAIMERBusiness Advantage Samoa is a general guide to some potential business opportunities in Samoa and is notdesigned as a comprehensive survey. The opinions expressed herein are not necessarily those of the publisherand the publisher does not endorse any of the business or investment opportunities featured, nor does it acceptany liability for any costs or losses related to dealings with entities mentioned in this publication. Readers arestrongly advised to pursue their own due diligence and consult with investment advisors before making anyinvestment decisions.3

ECONOMIC UPDATESamoa’s capital city, ApiaRegaining momentumBusiness Advantage’s Andrew Wilkins surveyed government and business leaders in Samoa to reveal acountry recovering slowly but surely from the impacts of global financial crisis and a devastating tsunami.> Economically and politically stable democracy> Strategically located at the heart of the South Pacific> Opportunities in tourism, agribusiness, fisheries,manufacturing and services> Reliable infrastructure> A regional leader in economic reform> Educated, English-speaking workforce> Competitive Offshore Finance CentreUntil the 2008/9 global financial crisis and anespecially destructive tsunami which hit thesouthern part of the main island, Upolu, inSeptember 2009, Samoa had been on an impressiveupward path arguably since the reformist HumanRights Protection Party entered government followinga financial crisis in the late 1970s and early 1980s.The consensus among business leaders Business Advantagespoke to in late 2010 was that the domestic economy has undoubtedlyslowed—remittances from overseas (see page 22) have dropped,reducing domestic demand, and consequently slowing demand forcredit from businesses.While it has temporarily reined in Samoa’s previously impressivegrowth, the economic slowdown has at least enabled Samoa to gaina three-year extension to its Least Developed Nation status from theUnited Nations (UN)—an extension which will enable it to continue toaccess UN development programs.Improved Prospects For GrowthWhile some economic slowdown has been inevitable, the advent ofmillions of dollars of post-tsunami foreign aid, a Government stimuluspackage targeting the agribusiness and fisheries sectors, and theintroduction of significant economic and business-related reforms prior‘The tourism sector is now recognisedas having the key role in Samoa’s futureeconomic development.’to 2008/9 (see page 8) means that the Samoan economy is wellplacedfor future growth. The Central Bank of Samoa anticipates 3%GDP growth in 2010, and similar growth thereafter.‘Samoa’s historic shift [in September 2009] from right-hand to lefthanddrive also created a lot of business activity, with people importingcars, and roads being fixed up,’ observes Malcolm Johnston, President ofthe Banker’s Association of Samoa.Certainly, conditions for business lending have improved markedly.‘Interest rates are at all all-time low and there is a high level of liquidityin the banking system,’ says Steve Rogers, Chief Executive Officer ofANZ Bank (Samoa), Samoa’s largest commercial bank.‘We are very optimistic for the remainder of the 2010/11 financialyear,’ Samoan National Provident Fund’s CEO Faumuina Esther LamekoPoutoa told Business Advantage. ‘Even though Samoa felt the effectsof the global economic crisis, our fund still managed a 12.5% increasein net profit for the 2009/10 financial year. Towards the end of 2010, wesaw a 10% increase in active employers and a 7% increase in activeemployees—people who are actually working.’Tourism the key sectorTourism is Samoa’s largest industry, and has gone from strength tostrength in recent years, particularly since the commencement of flightsby new international airline Polynesian Blue in 2005.While most tourism-related businesses are of a small scale, tsunamidamagedresorts have been rebuilt bigger and better than before andseveral larger projects are increasing capacity significantly (see page 16for more on this sector).Samoa’s Deputy Prime Minister and Minister or Commerce, Industryand Labour, the Hon Misa Telefoni, sees these major projects asevidence that Samoa’s strategies to attract foreign investment to thesector are working:4

ECONOMIC UPDATEMODERN SAMOAA peaceful democracy within the Commonwealth ofNations, the Independent State of Samoa (known priorto 1997 as Western Samoa) sits strategically at thecentre of the South Pacific, with Australia to its west,New Zealand to the south, Hawai’i to the north andFrench Polynesia to the east.While just 181,000 Samoans inhabit the country itself, manythousands more live in New Zealand, the United States andAustralia.Historically, the country is possibly best known as the final restingplace of Treasure Island author Robert Louis Stevenson, who wroteextensively of the country in his final years. It was also the oneof the major staging points for US military operations during theSecond World War (memorably recorded in James Michener’s Talesof the South Pacific—literary source for the celebrated Rodgers andHammerstein musical, South Pacific).More recently, Samoa has been a location for the popularUS television show Survivor, and the country’s extraordinarilysuccessful rugby union teams have become roving ambassadorsfor the country (Manu Samoa won the IRB Sevens Rugby WorldSeries in 2009/10).While it has retained the quintessential elements of a South Pacificparadise—pristine waters, a lush interior, palm-lined beaches, astrong traditional culture and a pleasant maritime climate—modernSamoa also has one of the most attractive business environmentsin the Pacific region, with modern ICT infrastructure, regular air andsea services connecting it to major markets, reliable ports andresponsive Government agencies.Samoa is also a major centre for offshore finance in the Pacific, withthe Samoa International Finance Authority facilitating business for manyinternational companies each year (see page 23).Obstacles to growthWhile the worst impacts of the global financial crisis and the tsunamihave now been mitigated, key challenges nominated by businessleaders Business Advantage spoke with include the need for furtherland reform to release more land for commercial development (see Page8), the need for more education and training, and the need for greateraccess to major markets such as Australia and New Zealand, whosestrict quarantine requirements tend to restrict agricultural exports. Thehigh cost of imports due to Samoa’s distance from major markets is alsoan issue, although the Samoan Government offers relief from importduties for new investments. While the Companies Act has recently beenrevised, some updating of other business-related laws is also seen asdesirable.The Samoan Government is certainly treating education as a priority,with its SchoolNet program rolling out internet connectivity to schoolsand undergraduate and vocational training now taking place at severalinstitutions, including the National University of Samoa.Removing the isolationClearly, modern Samoa is connecting the rest of the world economyin ways unimaginable to previous generations. Perhaps most notableexample of this for the business visitor to Samoa is in the area ofmobile telephony and internet access. Since Business Advantage lastvisited Samoa in 2008, ICT infrastructure has improved exponentially.Broadband internet is now commonplace, as are reliable andcompetitive mobile phone services.The Samoan Government has committed itself to building a NationalBroadband Network to build on these achievements—a developmentthat will see the expansion of Samoa into the new information economyand the delivery of more Government services online, includingbusiness registration. As Samoa’s Prime Minister, the Hon. TuilaepaLupesoliai Sailele Malielegaoi MP, tells Business Advantage:‘It is the only way we in the Pacific can terminate that sense ofisolation we grew up with.’Samoa’s National Parliament6

ECONOMIC UPDATEIn a perfect world,your bank would offer youconnections, not just products.With offices in 28 countries and territories across Asia Pacific,talk to the bank that connects you to people who know people.For more information, please contact ANZ SamoaPO Box L1855, Apia, SamoaT. +685 69999 [8am to 5pm on normal business days]F. +685 24595T. +685 69975 [Card enquiries helpdesk during working hours]T. 800199 [Card enquiries helpdesk during weekends & after hours]ANZ Swift Code. ANZBWSWW BSB. 010 979anz.com/samoa7Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522

ECONOMIC UPDATEMAKING SAMOA ATTRACTIVE FOR BUSINESSSamoa’s Prime Minister, the Hon. Tuilaepa Lupesoliai Sailele Malielegaoi MP, waspreparing to face March 2011 parliamentary elections when Business Advantageinterviewed him.The first Pacific Islands country to achieveindependence back in 1962, Samoa has also led theregion in business-related reforms. Business Advantagespoke with Prime Minister the Hon. Tuilaepa LupesoliaiSailele Malielegaoi MP about the path of reform.Since 1998, the Government of Prime Minister the Hon. TuilaepaLupesoliai Sailele Malielegaoi MP has been responsible for drivingreforms in several areas. The number of Government departmentshas been cut from 28 to 13, corporate tax rates have been reducedfrom 45% to 27%, import duties have been cut dramatically and a15% Value Added Goods and Services Tax has been introduced. In2009, Samoans also switched from driving on the right hand side ofthe road to the left, in order to bring it into line with most of its Pacificneighbours, including Australia and New Zealand, its two majorsources of visitors.Privatisation of state assets and the introduction of competitionin key sectors has also been a high priority. The previouslyGovernment-owned Vailima Brewery is now part of Australia’sFoster’s Group, the advent of international airline Polynesian Bluehas increased competition in the country’s aviation sector, whileCaribbean-based mobile phone company Digicel became theharbinger of competition in the telecommunications sector when itchose Samoa as its first Pacific location in October 2006 through itsacquisition of Telecom Samoa Cellular Ltd.‘A key element of our reform agenda has been the privatisation ourmajor public enterprises,’ notes Prime Minister the Hon. TuilaepaLupesoliai Sailele Malielegaoi MP, asked by Business Advantageto nominate key reforms. ‘We still have a few more to privatise: theAgriculture Store Corporation, for instance, and SamoaTel [at thetime of writing due for privatisation in the first quarter of 2011].’At the same time, the Samoa Government has started the processof removing ministers and public servants from the boards of publiccorporations.‘We are bringing in people from the private sector to run thesecorporations,’ says the Prime Minister, who has himself relinquishedchairmanship of both Polynesian Airlines and the Totalisator AgencyBoard by way of example.While such moves might be seen as textbook economic reforms,they have a Samoan flavour, underpinned by an understandingthat the market alone cannot provide all the solutions in a smallisland economy. The planned privatisation of SamoaTel (see page25), for example, has been preceded by the creation of the UnitTrust of Samoa. Says the Hon. Tuilaepa Lupesoliai Sailele Malielegaoi:‘We made a stipulation that, before SamoaTel was sold, we mustfirst of all create a unit trust so that part of the shares of thecompany would be reserved for the local people.’The Government also introduced a stimulus package in 2009to counter the joint impact of the 2009 tsunami and the globalfinancial crisis. Measures included programs to encourage forestryplantations and related infrastructure, and the replanting of cocoa,coffee and coconut.‘Only those planters that use organic systems could participatein the program. By going organic, we can expect better premiumprices for our primary products if exported,’ says the Prime Minister.‘At the same time, we have also established Scientific ResearchOrganisation of Samoa to help us address the question of how wecan generate more exports without being impacted by the toughquarantine regulations of countries like Australia and New Zealand.The only answer is to develop and strengthen our research.’USING LAND FOR BUSINESS IN SAMOALand has a special status in Samoa, as it does in mostPacific Island countries. Under the country’s landclassification system, about 80% of all land is customaryland, with the remainder either freehold (about 12%) orheld by the Government.The implications for business are several. Customary land, which isheld under ‘Chiefly Titles’, cannot be bought and sold. The standardway of obtaining customary land for business use therefore isthrough long-term leases that must be negotiated with localcommunities. A typical lease for business use might be for 30 years,with the option of a further 30 years after that, although longer termscan be negotiated.It should be noted that customary land cannot be mortgaged, andthus cannot be used as collateral to raise capital or credit. This isseen as brake to development. While there is land reform occurringin Samoa (the internationally prevalent Torrens system of land titleregistration was adopted in 2008), the process of reform in this areais necessarily slow.Freehold land (mostly based in and around the capital, Apia) can bebought, sold and mortgaged, but is scarce. Only Samoan residentsmay buy freehold land (unless approval is obtained from Samoa’sHead of State).8

ECONOMIC UPDATEPerspectives on SamoaBusiness leaders provide their own views on the current business climate.‘We are continuing to participate actively in effortsto promote the opportunities for growth availablethrough a free and competitive market. We believeour private sector will be the engine of growth forour economy, and we must ensure an enablingenvironment to faciliate this.’—The Hon. Misa Telefoni, Deputy Prime Minister‘There are good opportunities to increase thenumber and volume of Samoa’s exports. It hasa well-educated population with good Englishand there are also opportunities with its rapidlyimproving ICT infrastructure to develop back officeservices such as call centres.’—Caleb Jarvis, Trade Commissioner, Pacific Islands Trade & Invest‘In 2010/11, the economy is expected to record a stronger recovery ofup to 3%, followed by further growth rates of around 2% per annumin the following two financial years. In addition to the continuationof the Central Bank of Samoa’s easy monetary policy stance andimprovements in the New Zealand and Australian economies, thispositive outlook for the Samoan economy is also based on theGovernment’s highly expansionary Budget for 2010/11. The expectedpickup in exports and the recovery in tourism activity following thereconstruction of the resorts that were affected by the tsunami shouldalso contribute positively to economic growth.’—Leasi Scanlan, Governor, Central Bank of Samoa‘From a political and economic perspective, wehave stability. The Central Bank has led with astable economic policy and interest rates areat an all-time low. There was real growth in theeconomy—double-digit growth—up to the 2007South Pacific Games. While the global financialcrisis and the tsunami have impacted growth in recent years, there havebeen some promising signs for Samoa, particularly in relation to tradewith Asia.—Steve Rogers, CEO, ANZ Bank (Samoa) Ltd‘Following the October 2009 tsunami, people have wanted to get backinto business and get back fast. I’ve been quite amazed at how quicklyit’s happened. It’s a wonderful example of how resilient the Samoanpeople can be.’—John Perrottet, international tourism advisory firm Perrottet Partners'When Polynesian Blue was launched in 2005,it was not only to build a profitable internationalcarrier for the people of Samoa but to build onethat has a strong sense of community involvementand responsibility. With Samoa being an emergingtourism destination, as well as having strong familylinks with New Zealand and Australia, the capacity has grown to sixflights a week between Auckland and Apia, three flights a week betweenSydney and Apia, and one flight a week between Brisbane and Apia.Due to demand from the business traveller we have added a newcabin class, Premium Economy. This offers guests an enhanced flyingexperience, including more spacious seating, complimentary food andbeverages, priority check-in and a flexible and refundable fare.Polynesian Blue looks forward to growing visitor numbers to Samoaand continuing to play an active role in developing its tourism industry.'—Mark Pitt, CEO, Polynesian Blue AirlinesDOING BUSINESS IN SAMOABusiness Advantage asked Arthur Penn of localaccountants Lesa Ma Penn to summarise therequirements for doing business in Samoa.Company registrationA company must be registered under theCompanies Act 2001 (amended 2006) toconduct business in Samoa. An overseascompany can register with the Ministry ofArthur Penn Commerce, Industry and Labour under the Actas either a Local Company or as an OverseasCompany. Registered companies receive a Foreign InvestmentCertificate and Business Licence. (For further information, visit www.mcil.gov.ws)Company taxSamoa’s corporate tax rate is currently 27%.SuperannuationSuperannuation is compulsory for all employees working in Samoaor employed overseas by a company or an organisation registeredin Samoa. Exemptions can be made for foreigners working in Samoawho can prove that they are part of a similar superannuationscheme. A minimum superannuation payment of 10% of anemployee’s gross salary must be paid to the Samoa NationalProvident Fund. The employer contributes 5% and the employeethe other 5%.Accident Compensation LevyAn Accident Compensation Levy of 2% is payable to the AccidentCompensations Corporation for all employees, whether Samoanor expatriates; 1% to be paid by the employer and 1% by theemployee.Medical insuranceAlthough a 3% medical insurance levy has been suggested, thereis currently no compulsory medical cover in Samoa.10

PRODUCTIVE SECTORSUsing Samoa’s natural advantagesSamoa’s productive sectors are the mainstay of its economy. Despite the small size of its economy and lackof mineral resources, the range of goods it exports is increasingly varied. Samoa’s impending accession tothe World Trade Organization (WTO) is expected to open up new opportunities.Agriculture and fisheries are two of the traditional mainstays ofthe Samoan economy, providing livelihoods to many workingin Samoa’s large informal sector, and also making a significantcontribution to the country’s balance of payments through exports.‘Samoa stands to benefit substantially fromjoining the WTO: its own exports will be ableto compete on a level-playing field in thedeveloped world, and the country can expectto access to significant additional technicalassistance and training.’AgricultureSamoa’s warm climate, reliable rainfall and clean, fertile soils give it manyadvantages in agriculture. Key produce includes root crops, coconuts,nonu, bananas, vegetables and livestock. The preponderance ofsmall-scale growers also means the sector has an in-built flexibility thatcan allow it to respond to commercial stimulus. There is also a strongawareness and adoption of organic certification, which is allowingSamoa to access organic and Fairtrade networks around the world.Key Samoan agricultural exports include coconut products, nonu fruitand juice, taro, papaya, bananas, nuts, breadfruit, cocoa and vegetables(see table). Products with potential include oil seeds, perfumes, flowersand herbs. While most agricultural produce is grown to satisfy domesticdemand, export markets include the United Sates, Australia, NewZealand, Japan, Fiji and neighbouring American Samoa.Investment opportunities in Samoan agriculture> Coconut, includingIntegrated industrial coconut processing plantCoconut oil millCold pressed virgin oilCopra productionCoconut cream> Cocoa> Cattle> Edible ginger> Kava> Banana> Cut flowers> Beef exports (no abattoir at present)Sources: Ministry of Commerce, Industry and Labour (MCIL)/Small Business Enterprise CentreMAKING LOCAL INDUSTRY MORE COMPETITIVESamoa’s impending accession to the World TradeOrganization (WTO) has provided the impetus for aprogramme that will result in eight local companiesgaining the internationally-recognised ISO Certification.While WTO membership will bring many benefits, it is also liableto expose local firms to greater competition. To prepare for thisthe Samoa Association of Manufacturers and Exporters (SAME)has coordinated a project to assist local firms to become ISO(International Organization of Standards) 9001:2008 certified.SAME President, Eddie Wilson, explains that ‘ISO certification isthe highest internationally-recognised standard any businesscan obtain.’ By going through the process companies can expectto become more productive, as well as more competitive both inlocal and, potentially, export markets. ‘It is a difficult and expensiveprocess but it provides companies with guidelines and standards tooperate efficiently,’ he adds.Of the twelve companies who started the quality managementprogramme, eight are now going through the final stages ofcertification. They are: Computer Services Limited, IH Carruthers,KVA Consult, Natural Foods, Nelson Rocks, Samoa Paints, YoshidaInternational and WILEX Samoa Packaging Solutions. At presentYazaki EDS Samoa is the only ISO-certified local firm.11

PRODUCTIVE SECTORSCOCONUT INDUSTRY OFFERS INVESTMENT OPPORTUNITIESCoconut is Samoa’s largest renewable resource andprovides the country with the opportunity to participatein established international commodity markets for copraand coconut oil.Coconut also offers opportunityfor value-added exports: notonly coconut oil, but coconutcream, desiccated coconut,coconut fibre (coir) and shellproducts. According to theSamoan Ministry of Commerce,Coconut oil produced on Savaii. Industry and Labour, currentpotential investment projectsin this sector include an integrated industrial coconut processingplant, a coconut oil mill, cold-pressed virgin oil, copra productionand coconut cream. One company already involved in pure virgincoconut oil is The Pure Coconut Oil Company (PCO), an initiativesupported by Samoa’s Women in Business Development Inc,an organisation established to strengthen the viability of villageeconomies. PCO’s oil is organically certified by NASAA. It marketscoconut oil-based products such as cooking oil, moisturiser,scented oils and even insect repellent under the Ta’ale brand.Women in Business Development Inc. was established in 1991 withthe assistance of NZAID and Oxfam NZ to develop income-earningactivities in Samoa’s villages. In 1998 it established a programme toobtain certification for Samoan produce, in a bid to add more value.This paid handsome dividends in 2008 when international cosmeticretailer The Body Shop began to source organic Samoan extra virgincoconut oil for use in its bestselling global range of shower gels,lotions, body butters and soaps. It is currently taking delivery of fourtonnes every six weeks but would prefer twice that quantity—ifonly Samoa had the capacity to supply it.Virgin coconut oil (57518)Coconut oil (8669)Copra meal (7878)Nonu fruit (27715)Other (1229) Fresh fish (65365)Nonu juices (40804)Beer (22026)Spring water (12758)Coconut cream (49625)Samoa’s commodity exports, Dec 2009 to Sept 2010 (Value in thousand Tala).Source: Central Bank of SamoaFisheriesAt 124,000 square kilometres, Samoa’s Exclusive Economic Zone (EEZ)is the smallest among the Pacific Islands Countries, but due to itsfavourable location and sound management the industry has achievedmuch since the mid-nineties.Today the industry contributes around 40% of non-tourism exportearnings to the local economy. Given tuna’s migratory behaviour andthe impact of weather patterns such as El Niño, the fishing industry inSamoa is very cyclical. The 2009 tsunami also destroyed many smallvessels responsible for trawling Samoa’s EEZ.Apia Export Fish Packers handles 80% of Samoa’s fish exports,consisting mainly of frozen albacore tuna that is supplied to the KoreanownedStarKist cannery in American Samoa. There is some symmetryin this arrangement as most of the cannery’s workforce—approximately2,000—is actually Samoan.CASE STUDY: SAMOA’S LARGEST EMPLOYERSamoa’s largest private sector employer is JapaneseownedYazaki EDS Samoa.It has manufactured wiring harnesses, used in the distribution ofelectricity in cars, for nearly 20 years. These are exported to variousAustralian vehicle manufacturers under the South Pacific Trade andEconomic Co-Operation Agreement (SPARTECA), a concessionalmarket-access arrangement. It is worth noting that these exportsare classified as re-exports by Samoa and thus do not appear inSamoan Government statistics.The company employs approximately 1000 staff locally and themain manufacturing plant at Vaitele, on the outskirts of Apia, is bothTS16949 and ISO14001 certified.The longevity of this investment is a testament to Samoa’s labourforce,which is capable, reliable and competitively-priced.12

PRODUCTIVE SECTORSTAPPING INTO SAMOA’S PRISTINE ENVIRONMENTSamoa’s answer to Fiji Water has been rebranded andis making inroads into the world’s largest bottled watermarket—the United States.In the Pacific Islands, the Grey family is synonymouswith its hospitality business, most notably the iconicAggie Grey’s Hotel in Apia. But their new venture,Samoa Artesian Water, literally taps in to Samoa’spristine environment; specifically, it bottles water froman artesian aquifer located in a virgin ecosystem,beneath a 7000 acre rainforest on the main islandof Upolu. Only recently discovered, the vast body ofwater sits in volcanic rocks around two million yearsold, and is bottled at source using a state-of-the-artfacility.Given the small scale of their economies and theirdistance from the world’s major consumer markets, it is tough forPacific Island nations to export outside their own immediate region.But Fiji-based companies such as Fiji Water, Pure Fiji (cosmetics)and Pacific Green (furniture) have all demonstrated that it ispossible to make an impact on the wider international stage, bymarketing the region’s most valuable intangible asset: its reputationas an idyllic, unspoilt haven, far-removed from the industrialisedworld.Leveraging that asset is harder said than done and requires a levelof marketing expertise not typically associated with the region. Inthe case of Samoa Artesian Water, a firm from New Zealand hasdevised a strategy to effectively convey Samoa’s essence to theglobal consumer, completely rebranding the product which beganlife as ‘The South Pacific Water Co’.The product is already distributed in several major internationalmarkets, including 16 US states, and is also available on boardPacific Blue flights.Samoa Artesian Water is already providing the country with anunexpected source of export revenue, and one that has thepotential to grow rapidly given that the size of the world bottledwater industry is around US$100 billion. But it is also demonstratingthe economic potential of combining the South Pacific’sunquestionable appeal with world-class marketing.American Samoa’s canning industry has been in crisis howeversince the imposition of higher minimum wage requirements by theFederal Government in the United States. As a result, its secondmajor cannery closed down, and StarKist shed several hundred jobs.Interestingly, the Samoan government is currently in talks with StarKist’sowners to relocate it to Samoa. Fresh chilled fish is also supplied to theUSA and other markets.ManufacturingSamoa’s manufacturing sector plays an important role in the economy.Indeed, Samoa’s largest private sector employer is Yazaki EDS Samoa, aJapanese-owned company that produces wire harnesses.Samoa Breweries has produced Samoa’s very own German-styleVailima beer for over three decades, as well as soft drinks, at its breweryten minutes drive from Apia. It was taken over by Australian firm Fostersin 1998 and dominates the local beer market. British American Tobaccohas been in Samoa just as long, employing a staff of around 45 in itslocal manufacturing and distribution operation.Local players include Natural Foods (which produces bottled water,nonu juice and snack foods) and the Levai water company, one ofthe successes of the Small Business Enterprise Centre. Other localproducts include paints, coconut products, garments and handicrafts.The sector is currently preparing for Samoa’s imminent accessionto the WTO (see page 11). In theory, this poses a risk to local firms whomay struggle to compete with increasing imports, although in realitymost of the requisite trade liberalisation has already been implementedover the past decade. Samoa stands to benefit substantially from joiningthe WTO: its own exports will be able to compete on a level-playingfield in the developed world, and the country can expect to accesssignificant additional technical assistance and training.For those seeking to manufacture in Samoa for export purposes,a Duty Concession Scheme exists, granting duty-free access forimported primary materials. While Samoa’s remote geographical locationwould appear to pose a significant obstacle to such activities, a majornew local venture is demonstrating that this can be turned into anasset. Samoa Artesian Water exports around 15 containers of bottledwater every six weeks to several countries including the USA, Australiaand New Zealand (see box above).YAZAKI EDS SAMOA LTD.A Yazaki Group MemberProud to have been acommunity partner in Samoafor nearly two decadesYazaki EDS Samoa Ltd.Industrial Complex VaitelePO Box 2278, Apia, SamoaTel +685 65 215www.yazaki.com13

WHO’S WHO IN SAMOAN BUSINESSBANKING & FINANCEANZ Bank (Samoa)+685 69 955www.anz.com/SamoaWestpac Bank Samoa+685 66 182www.westpac.com.wsDevelopment Bank of Samoa+685 22 861www.dbsamoa.wsNational Bank of Samoa+685 23 077www.nbs.wsSamoa National Provident Fund+685 64 832www.npf.wsSamoa International FinanceAuthority+685 24 071www.sifa.wsCentral Bank of Samoa+685 34 181www.cbs.gov.wsCommercial Bank of Samoa+685 31 233www.scbl.wsUnit Trust of Samoa+685 34 321Ministry of Finance/Treasury+685 34 333www.mof.gov.wsSAMOAN BUSINESSORGANISATIONSChamber of Commerce+685 31 090www.samoachamber.wsWomen in Business+685 21 959www.womeninbusiness.wsSmall Business EnterpriseCentre+685 22 770www.sbec.wsmmalua@ipasifika.netSamoa Manufacturers andExporters Association+685 26726wilex@ipasifika.netREGIONAL BUSINESSORGANISATIONSPacific Islands Trade & Invest(4 regional offices)www.pacifictradeinvest.comUSEFUL WEBSITES & READINGAustralia Pacific IslandsBusiness Council+ 61 7 3348 5142yourn@apngbc.org.auwww.apibc.org.auNew Zealand Pacific BusinessCouncil+64 9270 3746www.nzpbc.co.nzAustrade Fiji office(covers Samoa)+679 338 2825fijienquiries@austrade.gov.auNew Zealand Trade & EnterpriseFiji office (covers Samoa)+679 330 6090BUSINESS SERVICESLatu Ey & Clarke Lawyers+685 30 363Lesa ma Penn Charteredaccountants+685 20 321Cadden Crowe+61 7 3003 0466www.caddencrowe.com.auPacific Islands human resourcesspecialistDIPLOMATIC MISSIONSIN SAMOAAustralia +685 23 411www.samoa.embassy.gov.auChina +685 22 474New Zealand +685 21 711USA +685 21 631INFRASTRUCTURE/TRANSPORTDigicelwww.digicelsamoa.comSamoaTel+685 67 788www.samoatel.wsComputer Services Ltd (CSL)+685 20 926www.csl.wsSamoa Airport Authority+685 23 201Samoa Port Authority+685 64 400www.spasamoa.wsSamoa Shipping Corporation+685 20 935www.samoashipping.comwww.mcil.gov.ws – Ministry of Industry, Commerce and Labour:www.samoa.travel – Samoa tourist board’s websitewww.cbs.gov.ws – Central Bank of Samoa has an informative andregularly-updated website.www.dfat.gov.au/geo/samoa/index.html – Australian Governmentcountry updateswww.samoaobserver.ws – Samoa Observerwww.pacifictradeinvest.com – Pacific Trade & InvestUseful readingDetailed profiles of Samoa's tourism, services, manufacturing,agriculture, fisheries and handicraft/arts sectors are available fromthe Small Business Enterprise Centre of Samoa (www.sbec.ws)Samoan Islands & Tonga Travel Guide (Lonely Planet, ISBN9781741048186)SAMOA PORTS AUTHORITYIn the heart of Polynesia, central to your businessSamoa Ports Authority (SPA) is responsiblefor ensuring that the port and maritime needsEconomic Survey recognized the port of Apiawww.spasamoa.wsas one of the best-managed ports in the region.SPA is also contributing to the developmentof Samoa’s tourism industry through thedevelopment of tourist-related projects in theApia port area.For competitive pricing contact:Samoa Ports Authority. PO Box 2279. Apia, Samoa. Tel: +685 6440014

WHO’S WHO IN SAMOAN BUSINESSCredit: Kirklandphotos.comSAMOA’S GLOBAL FOOTPRINTSamoa’s diplomatic missions around the world are listedbelow. Furthermore, the Government of Samoa hascommitted to establishing posts in both China (Beijing)and Japan (Tokyo) in the near future.American SamoaSamoa Consulate GeneralPago Pago, American Samoa+684 633 5919AustraliaSamoa High Commission13 Culgoa Circuit, O’Malley ACT 2606, Canberra, Australia+61 2 6286 5505samoahcaussi@netspeed.com.auBelgiumEmbassy of Samoa20, Avenue de l’Oree (bte.4) B-1000, Brussels, Belgium+32 2 660 8454samoaembassy@skynet.bePeople’s Republic of ChinaEmbassy of the Independent State of Samoa2-7-2 Tayyan BuildingNo 14 Liang Mahe Nan Lu, Chanoyang District, China+86 1065321785JapanEmbassy of SamoaSeiko Building, 2-7-4 Irifune, Chuo-ku, Tokyo, Japan+813 6228 3692Samoa_tokyo@samoaembassy.jpNew ZealandSamoa Consulate General3 Floor Samoa House, Karangahape Road, Auckland, New Zealand+649 303 1012Samoa High Commission1A Wesley Road, Kelburn, New Zealand+644 472 0953shc@paradise.net.nzUSASamoa Mission to the United Nations800 2nd Avenue, 4th Floor Suite 400J, New York 10017, USA+1 212 599 6196samoa@un.intSource: Ministry Foreign Affairs & Trade (www.mfat.gov.ws)Ah Liki Construction+685 20 643Fletcher Construction+684 699 4323www.fletcherconstruction.co.nzKramer Group+685 30 353/30 354www.kramer.com.auPolynesian Bluewww.virginblue.com.auPacific Air Cargo+61 7 3268 6633www.pacificaircargo.com/Specialists in regional freightSwire Shipping+61 2 9272 9261www.swireshipping.comMANUFACTURING/INDUSTRYSamoa Artesian Waterwww.samoanwater.comYazaki EDS Samoawww.yazaki.wsSamoa Breweries+685 20 200www.vailima.wsBritish American TobaccoSamoa+685 23 312www.bat.comNatural Foods+685 24 117percival@ipasifika.netApia Export Fish Packers+685 23 247Wilex Samoa PackagingSolutions+685 26 723Ministry of Commerce, Industryand Labour+685 20 441www.mcil.gov.wsTOURISMSamoa Tourism Authority+685 63 500www.samoa.travelSamoa Hotel Association+685 30 160www.samoahotels.wsPolynesian Airlines+685 21 261www.polynesianairlines.comAir New Zealand+685 20 825www.airnewzealand.comSAMOA SHIPPING CORPORATION LIMITEDProviding quality, reliable, and safe shipping services in Samoa and its neighbouring islandsSamoa Shipping’s newly launched Lady Samoa III is a state-of-the-art vessel with a capacity of 740 passengersand 40 vehicles, operating between Upolu (Apia) and Savaii.It features a business class section of 48 spacious, cushioned seats. Business class passengers receive loungeaccess at the terminal, as well as priority boarding, light refreshments and on-board entertainment.Samoa Shipping’s other activities comprise of a ferry service to American Samoa as well as charters, boatengineering, hospitality and general engineering.View our schedule at: www.samoashipping.com Contact: PO Private Bag, Shipping House, Matautu-tai, Apia, Samoa. Tel +685 20935 / 2093615

TOURISM INVESTMENTCredit: kirklandphotos.comLalomano Beach on UpoluQuintessentially South PacificSamoa’s tourism sector is emerging from the September 2009 tsunami and global downturn in better shapethan ever.> Beautiful, pristine, safe and friendly> Regular air connections to major markets> Pre-global financial crisis growth returning> Incentives for developers> New properties opening, including from internationaloperatorsIn many ways, Samoa is the quintessential Pacific island destination:its surrounding waters are warm and pristine, its beaches (includingthe iconic Lalomanu Beach, pictured above) white and picturesque,its hinterland spectacular and its climate and culture welcoming. Itspeak season for visitors is between May and October (the ‘dry season’),although visitors come all year round.Tourism has been the big success story of the Samoan economyover the past decade. The country’s largest single source of foreignexchange, the sector has achieving strong, steady growth, particularlysince the commencement in 2005 of flights from Australia and NewZealand to Samoa by Polynesian Blue (the airline jointly owned byAustralia-based Virgin Blue, the Government of Samoa and leadingSamoan hotel and resort operator, Aggie Grey’s).Tourist arrivals have grown alongside a healthy ‘visiting friends andrelatives’ market (many thousands with Samoan roots live outside the‘Tourism development is a high priority forthe Samoan Government, which playsan active role in facilitating overseasinvestment.’country) that helps to sustain regular flights by Polynesian Blue, Air NewZealand, Air Pacific and Polynesian Airlines which now connect Samoato Brisbane and Sydney in Australia, Auckland in New Zealand and alsoFiji and American Samoa.Beyond the tsunami and global downturnThe past 18 months have been harder for the tourism industry, however,largely for reasons beyond Samoa’s control:‘The September 2009 tsunami and the global financial crisis had amajor impact on arrival figures,’ Nynette Sass, Chief Executive Officer ofthe 80-member Samoa Hotel Association, told Business Advantage inDecember 2010. ‘There’s been a slight increase in figures recently [July2010 figures were up by 14%, year-on-year] but it hasn’t been felt onthe ground yet.'The tsunami badly hit operators along the southern coast of themain island of Upolu, several of whom had to rebuild their propertiescompletely or partly (see opposite page), while the global financial crisisaffected tourism arrivals from Samoa’s major markets: the United States,New Zealand and Australia.16

TOURISM INVESTMENTBUILDING BACK BETTERCredit: Sinalei Reef Resort & SpaSinalei Reef Resort & Spa is one of several resorts looking better than ever afterpost-tsunami rebuilding.In September 2009, a major tsunami hit the south coastof Samoa’s main island, Upolu—one of Samoa’s majortourist areas. Several resorts, most family-owned, weredestroyed or severely damaged, including the iconicbeach fales at Lalomanu, which bore the full brunt of themassive waves.While the Samoan Tourism Authority successfully conveyed themessage to international visitors that it was business as usualelsewhere in Samoa, many south coast resorts and fale ownersspent 2010 recovering from the tsunami damage, aided in partby a US$9.3 million loan from the International Monetary Fund’sExogenous Shocks Facility and the Tourism Tsunami Beach Fale RebuildingProgramme, financed by the New Zealand Government andthe United Nations Development Programme.‘People want to get back to business and get back fast. I’ve beenquite amazed at how quickly it’s happened,’ says John Perrottet ofPerrottet Partners, who has been instrumental in helping affectedresorts access finance to rebuild.In several instances, it’s not only been a question of rebuildingdamaged facilities but, in Perrottet’s words, ‘building back better’.A good example of this is the 29-fale Sinalei Reef Resort and Spa,which re-opened in April 2010 after having to rebuild 30% of itsfacilities. According to the resort’s agent, Tess Willcox of WorldResorts of Distinction, the resort’s fales have been rebuilt withsturdier stone foundations, a new spa has been added and theresort’s over-water restaurant, which was completely destroyed,has been replaced.Getting the resort ready for the start of Samoa’s peak May–Octobertourist season produced immediate dividends:‘We were able to run at around 90% occupancy during peakseason and future bookings are looking strong. It’s been fantastic,’says Willcox.While other established properties such as Coconuts BeachClub Resort and Spa and Litia Sini Beach Resort have also nowreopened, not all resorts have been able to reopen so quickly.‘Our resort was almost completely destroyed,’ Chris Booth, ownerof Sea Breeze Resort, tells Business Advantage. ‘Only one roomwasn’t destroyed and that was damaged by the earthquake whichpreceded the tsunami.’Booth expects the rebuilt Sea Breeze, which will include the buildingof an all-new swimming pool and deck area, to be complete in thefirst half of 2011.The Samoan Government is also playing its part, with seawall building and strengthening well advanced when BusinessAdvantage visited Upolu’s south coast in December 2010.While nothing will erase the memories of that fateful day in 2009,and the tragic loss of life, the tsunami rebuilding program willultimately make Samoa’s south coast an even more attractivedestination to the tourists already returning to support its localoperators.Rebuilding along Upolu’s South Coast following the 2009 tsunami, including new sea walls, roads and beach fales, has been under way for some time.17

TOURISM INVESTMENTNEW TOURISM DEVELOPMENTSCredit: Tanoa HotelsThe new Tanoa Tusitala Hotel in central Apia.Post-tsunami rebuilding on Upolu’s south coast isn’t theonly development activity in Samoa’s tourism sector, asBusiness Advantage discovered.Samoa’s first and largest premium resort, Aggie Grey’s Resort, Lagoonand Beach Club, is currently undergoing a significant program ofexpansion. Located on the western tip of the island of Upolu, justten minutes drive from Faleolo International Airport, the resort wascreated under a joint venture between Aggie Grey’s Limited (whichalso owns Aggie Grey’s Hotel in Apia), the Government of Samoa, andother private investors. The four-star 140-room resort, set on its ownlagoon, is laid out in over 50 acres of tropical gardens, and is adjacentto a spa, and an 18-hole championship golf course which openedin mid-2007.‘We’ve started building an extra 20 bungalows and a conferencefacility that will accommodate 300-plus delegates,’ says Fred Grey ofAggie Grey’s Limited. ‘We also have a program of soft refurbishment.’Meanwhile, the Fiji-based Tanoa Hotels Group opened the 95-roomhigh-end Tanoa Tusitala Hotel in downtown Apia in 2010 and expectsto open an adjoining spa/health centre and facilities for conferencesto 150 people in 2011. A second Tanoa project is planned near Apia’sport, on land provided by the Samoa Ports Authority.Near the Tanoa Tusitala is Apia’s newest hotel, the locally-owned 37-room Amanaki Hotel, built with finance from the Development Bank ofSamoa. The three-storey waterfront hotel opened in December 2010.Meanwhile, expectations are high that 2011 will see thecommencement of Warwick International Hotels’ first property inSamoa. The international hotel company plans to build a 102-roomfour-to-five star hotel with conference facilities, hill top restaurant, twoswimming pools, a beach bar and grill, shops and offices at Vavauon the south coast of Upolu in two stages. The project is at the detailIn spite of these two factors, reported revenues from tourism-relatedactivity for the year ending June 2010 were a steady 312 million tala(US$135.5 million).‘Money has been made available to operators to help them buildback and it’s important to note that the whole country was notdemolished by the tsunami: in fact, most parts of the country wereunaffected,’ says the Hon. Misa Telefoni, Samoa’s Deputy Prime Ministerand Minister for Tourism.With most affected properties now wholly or partly rebuilt and newinvestment occurring elsewhere in Samoa, the Central Bank of Samoaexpects the sector to drive further growth in the economy in 2011.Types of developmentMost of Samoa’s resorts and hotels are small, owner-operatedestablishments, the vast majority spread across the main island of18Upolu and to a lesser extent on the larger but less developed secondisland, Savaii. More larger properties are appearing, however (see box).Tourism development is a high priority for the Samoan Government,which plays an active role in facilitating overseas investment in the sectorand provides incentives in the form of tax holidays, duty-free importsfor construction and assistance with infrastructure. Its Private SectorSupport Facility, part-funded by the New Zealand Government and theUnited Nations Development Program, also supports tourism businesses.The Development Bank of Samoa is a potential source of credit fortourism projects, and has played a key role in the post-tsunami rebuilding.‘Given the importance of tourism to the economy, we have beeninvolved in financing infrastructure development in tourism, specificallyfor accommodation units,’ Fuimaono Falefa Lima, Chief Executive Officerof the Development Bank told Business Advantage. ‘But of course thetourist sector also extends to restaurants, rental cars and marketing. We

TOURISM INVESTMENTSamoa’s newest hotel, the locally-owned 37-room Amanaki Hotel.design stage and Warwick anticipates commencing construction inmid-2011.‘Samoa is a beautiful place and has pristine beaches and a beautifullandscape that is unique in the South Pacific,’ Senior Vice President/Executive Director—Pacific of Warwick International Hotels TammieTam told the Samoa Observer in 2010. ‘We see great potential forresorts in Samoa, provided there is increased awareness in themarketplace and increased accessibility through the number ofairlines coming into Samoa. The stable Government and consistentfiscal and other policies provide confidence of investments in thiscountry.’On the island of Savaii, the Hawai’i-based South Pacific DevelopmentGroup is planning to build five-star resort on a 600-acre site near thevillage of Sasina. The Sasina Resort will include a 400-room hotel,timeshare apartments, a championship golf course, cultural centreand marina.‘We are currently seeking an experienced co-development partnerto lead the construction/development of the resort,’ South PacificDevelopment Group’s Jesse James told Business Advantage.Aggie Grey’s Resort, Lagoon and Beach Club is currently undergoing expansion.Credit: Aggie Grey's19

TOURISM INVESTMENTSamoa Tourism Authority/Kirklandphotos.comThe Robert Louis Stevenson Museum (www.rlsmuseum.com) near Apia is one of Samoa’s most popular tourism attractions.have a fairly close relationship with the Samoa Tourism Authority andSamoa Hotel Association and through them have an understanding ofthe sector’s needs.’Samoa’s National Provident Fund is also a supporter of the tourismsector, either directly through equity (it has a stake in Aggie Grey’sLimited) or through the provision of business loans. As such, it is apotential partner for international investors seeking to set up a tourismrelatedbusiness in Samoa.Appropriate developmentWhile Upolu receives the bulk of tourism investment, Savaii, Samoa’slargest island, offers just as much potential. It boasts attractions suchas blowholes, waterfalls and volcanic craters, but has so far seenminimal tourism development. That may be set to change though, withthe South Pacific Development Corporation recently signing a long termlease for a resort there.At the same time, potential developers need to be wary ofcommunity concerns. While no one in Samoa disputes the potentialbenefits to the country of tourism development, there is real concernregarding the possible side-effects of mass tourism.The consensus too among business leaders was that finding theright local partner or advocate is essential, no matter what size of foreigninvestment is being considered (both the Reddy Group and WarwickInternational Hotels have followed this advice). Foreign entrepreneurswill also receive a warmer welcome if they actually have the means toraise capital off-shore, rather than relying heavily on local finance.As such, tourism development, on whatever scale, will always needto be low-rise, and in harmony with both the surrounding environmentand traditional Samoan culture.Branding Samoa'Samoa offers many unique holidaying experiences in a country ofnatural beauty with a living Polynesian and Christian culture,' summarisesSonja Hunter, Chief Executive Officer of the Samoa Tourism Authority.Without the scale to offer heavily discounted packages asneighbouring Fiji has done, and with few top-end properties tied tointernational chains, Samoa has had to compete for tourists on a tightbudget and focus on quality.‘The biggest issue for Samoa is brand awareness,’ says MichaelRiddington, representative for the Samoa Tourism Authority in Australia.‘There’s a huge opportunity to build the brand. People need to knowwhere it is and what it is.’Riddington sees Samoa very much as a ‘lifestyle destination’ thatappeals across demographics and socio-economic groups. Travellerswho visit Samoa tend not to be ‘flop and drop’ resort-seekers, but thoselooking for a less-developed, away-from-it-all location, soft adventureand a unique cultural experience.Not that this means that tourists’ expectations are lower for Samoa.Speaking to an audience of international travel wholesalers in Apia,Samoa’s capital, at the end of 2010, the Hon. Misa Telefoni stressed theneed to achieve a ‘quality advantage’ over competing markets, with anemphasis on service excellence and exceeding visitors’ expectations.Better skillsImproved skills training is one way the industry can achieve such anadvantage. The Samoa Tourism Authority recently conducted a surveyof the human resources needs for the industry and the Samoa HotelsAssociation will be producing its own curriculum/training program aspart of an European Union Non State Actors project.With all the new building, properties such as Aggie Grey’s Resort andthe Tanoa Tusitala (not to mention the new Chinese-built conferencecentre being built in downtown Apia) targeting the lucrative MeetingsIncentives Conferences and Events (MICE) market, and moves to marketthe Samoa brand internationally, Nynette Sass is positive about thesector’s prospects:‘With a bit more aggressive marketing, we’ll start to pick up over thenext 18 months.’A new Chinese-built conference centre nearing completion in Apia, Samoa’s capital, willhave seating capacity for 800 delegates, enabling Samoa to better service the MeetingsIncentives Conferences and Events (MICE) market.20

TOURISM INVESTMENTCredit: Kirklandphotos.com (top right), Carly Stephan (bottom)Church life is important in Samoa, with Christianity coming to the territory in the nineteenth century. Almost every community is served by at least one church and oftenmany. Samoan churches' unique Polynesian architecture makes them popular attractions with tourists, while attending a church service in Samoa is a unique experience.We’re Samoasince 1977.Westpac has a long history of financialexpertise in Samoa. And as part of thecommunity we’ve provided bankingservices and financial development tothousands of people.Talk to us today at any of our branches.Call 685 66100Email westpacsamoa@westpac.com.auVisit www.westpac.com.wsWe’re a bank you can bank on.21

BANKING & FINANCEA financial centre for the PacificSamoa’s economy is underpinned by a diverse and robust banking sector.Samoa is well-served with banking and finance infrastructure.It has no less than four commercial banks, complimented bya dynamic development bank. The sector is ably regulated bythe Central Bank of Samoa.Rather than the country being over-banked, it appears thathealthy competition prevails in its banking sector, with various financialinstitutions catering to different needs in local economy.Key playersThe largest banks are regional operators ANZ and Westpac, which offera wide range of services based upon electronic banking platforms.Although they service all markets, they tend to dominate the top-end,encompassing corporate, government and high net worth individuals.Samoa is still a very cash-based society, however, and this has‘Samoa’s economy is underpinned by adiverse and robust banking sector.’enabled two locally-owned entrants, the National Bank of Samoa andSamoa Commercial Bank, to each garner double-digit market share afterentering the market quite recently. As the National Bank’s CEO, FuimaonoMalcolm Johnston, puts it ‘we are a local bank for local people.’Johnston, who is also President of the Samoa Bankers Association,reports that the demand for new business lending has been slack overthe last couple of years. Westpac’s Head of Business and ConsumerBanking Darren Moore agrees: ‘Interest rates are currently at a sevenyear low, and yet there are record levels of liquidity in the system.There’s never been a better time for people to invest.’REMITTANCES: A MAJOR CONTRIBUTOR TO THE SAMOAN ECONOMYThe impact of remittances (funds transferred by foreignworkers back to their home country) upon the Samoaneconomy cannot be underestimated.While many Samoans live overseas, Samoan society’s emphasison the fa’alavelave system of reciprocity and social obligationplaces expectations on expat workers to send money to supportkith and kin.Aside from allowing residents to raise their standard of living,remittances increase the rate of capital accumulation in aneconomy and thereby boost its potential for growth. In Samoa, forexample, a significant amount of capital is invested into local realestate due to remittances.Remittances also provide a valuable source of foreign exchange. InPacific economies imports are almost equivalent to consumptionand, without remittances, imports would have to diminish sharplyin order to balance the trade account. Evidence also suggeststhat remittances have helped central banks in the Pacific maintainrelatively strong exchange rates.However, remittances can also distort an economy and its potentialfor growth by reducing the incentive to invest in employmentcreatingindustries, and can lead to a vicious cycle of dependencyon overseas migrant workers.The value of remittances to Samoa soared in the middle of thelast decade due to the buoyant global economy. In 2006, wheninflows rose above 25% of GDP, Samoa’s Central Bank was forcedto tighten monetary policy in the face of high domestic liquidity andincreasing consumption and imports.Unsurprisingly, the global downturn has led to remittances tailing offsince late 2008 but at around AUD$181 million in 2009 they remain amajor source of foreign earnings.22

BANKING & FINANCEA MODEL INTERNATIONAL FINANCE CENTRESamoa has carved itselfa niche in the fiercelycompetitive landscapeof international financecentres.‘Vanuatu and the Cook Islandshad already established theirAlosamoa Erna Vaai, CEO of the international finance centres bySamoa International Finance Authoritythe time we came to set oursup in 1988, so we needed to find our own particular niche’, explainsErna Vaai, Chief Executive Officer of the Samoa InternationalFinance Authority (SIFA), the organisation nowadays responsible forregulating and promoting the sector. ‘In our favour, we had excellentdiplomatic relations with China, and a time-zone [GMT/UTC minus 11hours, just east of the International Dateline] that meant that Asianinvestors could literally do business here yesterday.’‘Because of our time-zone, our Asianclients can do business here yesterday.’So Samoa specifically targeted the emerging Asian market,particularly China and the financial hub of Hong Kong.Samoa’s promotional efforts in the Far East were helped by thesuccess of its national seven-a-side rugby team. Rugby is Samoa’snational sport, but it is in the reduced form of the game that itreally excels. In 1993, the ‘Manu Samoa’ Sevens side first won theprestigious Hong Kong Sevens tournament, the highest-profile eventin Hong Kong’s sporting calendar—a feat repeated in 2007 and 2010.This provided invaluable networking opportunities and helped putSamoa on the map in its target market.Of course, China’s stellar economic growth over the past decadehas also been fortunate. ‘China has so many high-net-worthindividuals these days and it was scarcely affected by the GFC,'marvels Erna Vaai.Besides its time-zone, Samoa’s competitive advantages includepolitical and economical stability, innovative and user-friendly laws,strict confidentiality and foreign language registration.It already has a wide base of corporate vehicles available, such ascompanies, segregated funds, banks, insurance products and, mostrecently, the introduction of an international mutual fund offering,which can be public, private or professional.But the last decade has also been turbulent for the world’sinternational finance centres. How has Samoa been affected bystringent new regulations constraining the activities of offshorejurisdictions?‘We cannot unplug from the international finance network’, saysErna Vaai. ‘Reputation is everything in the current environmentand in December 2009 Samoa was the first South Pacific Islandto be white-listed by OECD, having complied with the requisitethreshold for information exchange agreements on tax matters withpredominantly OECD member countries.’As a result, Samoa’s offshore sector is currently enjoying stronggrowth and planning ahead:‘Samoa is constantly reviewing its laws against internationalstandards and also with a view to further diversifying its productbase and to further broaden the range of corporate vehicles alreadyavailable to remain competitive in the offshore market’, adds Vaai.One such innovation is the Electronic Transactions Bill passed in2008, which allows for company registrations to be conductedelectronically. The long-term objective is a paperless registry.Interest rates driven lowerThe only solution is to force interest rates down further, according toCentral Bank Governor, Leasi Papali’i Tommy Scanlan, one of the world’slongest-serving Central Bank heads.‘We want to see further reductions in the lending interest rates, so wewill continue to ease monetary policy possibly into the next two financialyears until the rates get to levels that we think should be more viable forthe private sector’, he told Business Advantage in December 2010.This task will be facilitated by recently-passed legislation that willallow the Central Bank to pump liquidity more directly into the financialsystem, through concessional loans to selected nonbank financialinstitutions such as the Development Bank of Samoa and the SamoaHousing Corporation.Driving private sector growthSamoa’s land tenure system (see page 8) makes it hard for commercialbanks to accept land as security when assessing loan applications.It is for this reason that the Development Bank of Samoa, foundedin 1974 and owned by the Government, plays such a vital role in thelocal economy. It has less stringent collateral requirements, so canprovide vital credit, especially to new businesses in the agricultural,industrial and, increasingly, tourism sectors. With a positive cash-flowestablished, such companies may subsequently qualify for loans fromthe commercial banking sector.The Development Bank’s role is made possible in part by the supportof the institutions such as the European Investment Bank and theSamoa National Provident Fund, which has made capital available atlower interest rates to help both the Development Bank and the SamoaHousing Corporation increase their own lending.‘2010 marks the first time we have worked with the DevelopmentBank,’ says Faumuina Esther Lameko Poutoa, CEO of the SamoaNational Provident Fund. ‘Much of our money is kept in term depositsand we had to try more lending products to help both our members andthe business sector develop while keeping up our revenue.'Branching out with new technologyThere is a consensus among the banks that technology will be centralto the future growth of their operations, with the rapid development ofSamoa’s telecommunications infrastructure providing a key platform(see page 25).'We have some exciting initiatives underway that will increase ourdistribution network and bring banking services to the rural and remoteareas of the country,' Michael Mjaskalo, General Manager of WestpacBank Samoa tells Business Advantage.Meanwhile, ANZ is introducing a new product to make it cheaperand faster for people in Samoa and other Pacific countries to receiveremittances, as well as exploring the use of mobile phone technology tomake banking more accessible for people in remote areas.23

INFRASTRUCTURE & TRANSPORTSamoa’s successful Polynesian Blue joint venturewith Virgin Blue has driven growth in tourism andincreased competition.Credit: Polynesian BllueA hub for the central PacificThanks to its favourable geography and an ongoing commitment to reform, Samoa is an increasinglystraightforward place to do business.When it comes to infrastructure and transport services,Samoa enjoys a natural advantage over many of itsSouth Pacific neighbours. While they have to grapple withtreacherous and dispersed geographies, Samoa’s is divided into twohospitable islands, a short ferry ride apart.At the same time, it can also take a lot of credit for controlling its owndestiny. As a regional leader in reform, Samoa’s liberalisation of areassuch as telecommunications, aviation and port facilities has increasedefficiency and reduced costs. Reform of the way fuel was distributedSHIPPING AND PORTSin the 1990s means that petrol prices are lower than elsewhere in theregion.Nonetheless, Samoa’s isolated location and the small-scale of itseconomy still means that the cost of utilities such as electricity can behigh by global standards.Telecommunications/ICTThe telecommunications sector in Samoa has made great strides inrecent years and this looks set to continue (see box).Mobile: Digicel competes for market share with the ‘Go Mobile’Samoa Shipping Corporation and the Samoa PortsAuthority are both expanding the scope of theiroperations.Domestic passenger and freight services are predominantlyprovided by Samoa Shipping Corporation’s fleet of six vessels. Itsmain route is the link between Upolu and Savaii—‘the main islandand the big island,’ as Samoa’s Shipping’s CEO Papalii Willie Nansendeftly puts it.Although larger, Savaii is relatively undeveloped. At the same time,many residents of Apia actually originate from Savaii and havefamily there, hence the volume of inter-island traffic is considerable.Increasing demand led to the inauguration of a brand new vesselearlier in 2010. Lady Samoa III (pictured above) plies the onehour trip twice daily in each direction. It has a capacity of 740passengers and 40 vehicles, and even includes a business-classsection.Samoa Shipping also runs day cruises, operates charters andprovides the only passenger ferry between Samoa and AmericanSamoa (weekly frequency). Proud of its strong track record forsafety and reliability, it is now considering opportunities to expandits presence in the Central Pacific region:‘We are currently looking at opportunities to provide charterservices in both Tokelau and the Cook Islands’, says Nansen. Thecompany is also involved in a feasibility study that would seeSamoa become a sub-regional hub, with Samoa Shipping involvedin providing feeder services to other islands.Such a plan would increase the importance of Samoa’s main portat Apia. The South Pacific’s fourth largest port was credited withbeing one of the best-managed ports in the region in AusAID’s 2008Pacific Economic Survey. Since 1999, it has been run by the SamoaPorts Authority (SPA), a self-funding commercial organisationresponsible for all the nation’s ports. In that period volumes havedoubled, storage facilities have expanded, wharves extended, anda new marina has been built. Most recently, it has undergone anextension to its berth, container storage area and container park.By outsourcing the port’s key operations to the private sector,SPA has been able to run Apia profitably. This is turn has allowedit to divert funds to develop much-needed port infrastructurethroughout the country.SPA also has an agreement in place with Fiji’s Reddy Group that willsee a four star hotel built on freehold land it owns adjacent to theApia Port area. Samoa Shipping hopes to follow suit over on Savaiiwhere it owns a suitable piece of land and is now seeking a partnerwith whom to develop the project.24

INFRASTRUCTURE & TRANSPORTTELECOMMUNICATIONS REVOLUTION TRANSFORMS SAMOAThe privatisation of state-owned telco SamoaTel isthe next step in a telecommunications revolution thatis creating a host of new opportunities for the islandnation.The Samoan Government has not been shy when it comes toliberalising its telecommunications sector. In 2006 it became thefirst Pacific nation to grant an operating license to Irish-owned,Caribbean-based mobile phone provider Digicel, which nowoperates in several countries across the region. The advent ofcompetition into the mobile phone market saw prices fall by around50% overnight, network coverage increase to around 95% of thepopulation and service levels improve markedly.Internet access remained slow however (and international callcosts high) due the dependence on a costly and limited satelliteconnection for international connectivity.All this changed in 2009 with the commissioning of an underseafibreoptic cable linking Samoa to American Samoa, and onto Hawaii.With ten times more bandwidth and faster connection speeds,suddenly broadband internet was on offer, in the Apia area at least,and international call charges fell sharply nationwide.‘A few weeks after we commissioned the undersea cable wehappened to have a call from the producers of the TV showSurvivor,’ says Vaa Ofoia, Sales Manager at SamoaTel. ‘They werevery impressed that they were able to send footage back to theirstudio after each day’s filming. But for the cable, they would havebeen relying on a courier service.’However, the current international link will only be available foranother eight years and discussions are taking place with a privateNew Zealand firm to tap into a new cable connection that it isplanned between New Zealand and the United States.At this time of writing, the Samoan Government is in the processof privatising its wholly-owned telecommunications providerSamoaTel. It is almost certain that the successful bidder will bean international player that will have the resources to take thecompany to the next level.25% of SamoaTel’s shares have been allocated to a newly-formedUnit Trust of Samoa fund to enable the Samoan general public toown their own stake in SamoaTel, and subsequent privatisations.The Samoan Govenment has plans to extend broadband to theentire population of Samoa. The national broadband network, to berealised in partnership with the Chinese government assistance,would underpin a plan to computerise all of Samoa’s schools.Samoa’s telecommunications revolution also opens upopportunities in other sectors. The countries commercial banks areincreasingly turning to mobile phone technology to deliver services(see page 23), while the Samoan Government is also assessingthe country’s competitiveness as a location for international callcentres.arm of state-owned SamoaTel. Mobile coverage is around 95% of thepopulation and services are reliable. Though 3G has not yet arrived inSamoa, consumers enjoy a high-standard of customer service and awide range of services. Smart phones are supported by both providers,and roaming is available for international visitors.Landline: SamoaTel retains exclusive rights to provide fixed lineservices. Call costs are modest by regional standards.Internet: SamoaTel offers ADSL 2 broadband internet in the Apiaarea. Samoa’s largest ISP Computer Services Ltd offers wireless internetvia WIMAX technology. It is also responsible for a series of ‘Lavaspot’hotspots in Apia’s hotels and cafes.AviationSamoa’s aviation sector has been transformed by its government’sdecision in 2005 to essentially wind up the international operationsof loss-making national carrier, Polynesian Airlines, and enter a jointventure with Australia’s Virgin Blue. This arrangement has galvanised thelocal tourism industry by increasing international flights and reducingfares.The resulting airline, Polynesian Blue, currently runs 14 flights perweek to Apia from Auckland, three flights from Sydney and one flightfrom Brisbane; Air New Zealand has daily flights between Auckland andApia; and Air Pacific operates less frequent flights to Fiji’s Nadi Airport.You can fly direct between Samoa and American Samoa with Inter-Island Airways or Polynesian Airlines for around US$180 one way.Unfortunately, Air New Zealand’s weekly service from Los Angelesto Apia, which also connected Samoa to Tonga, ended at the end ofJanuary 2011.Faleolo International Airport, about 35km from Apia, has soundinfrastructure and no looming capacity issues.PostSamoa has an efficient postal service. On 1 September 2008, SamoaPost was established as a stand-alone company after being separatedfrom SamoaTel.WaterAll urban and coastal land areas have access to water. Only a fewinterior areas currently don’t have water access. The Samoa WaterAuthority is responsible for the installation and connection of water to allhouseholds and commercial factories.ElectricityThe Electric Power Corporation is responsible for the generation,transmission, distribution and retail of electricity in Samoa and providespower to 95% of the population. Although service levels are good, thecost of electricity is high.RoadsSamoa’s urban centres are linked by adequately-maintained, sealedroads.ConstructionSamoa’s construction industry is currently undergoing a mini-boom dueto the rebuilding work in the aftermath of the devastating 2009 tsunami.It certainly does not lack professional expertise in this area, both localand international. Major contractors include Ah Liki Construction, NewZealand’s Fletcher Construction and Ott Transport (the latter specialisesin roads). Meanwhile regional engineering consultancy Kramer Ausencoalso has a local presence.25

BUSINESS TRAVEL GUIDE TO SAMOASamoa’s capital city, ApiaSome practical tips and advice for the business traveller.VisasA free, 60-day visa is granted to allvisitors to Samoa (except Chinesenationals who require a visa inadvance). However, you do need anonward ticket and a passport with atleast six months validity.Currency/MoneyThe local currency is the tala, currencycode WST (or ST for short). It was worthAUD$0.434, NZ$0.565 or USD$0.433 asat 7 December 2010.ATMs and currency exchangeoutlets can both be found at FaleloloInternational Airport, and ATMs canalso be found around Apia on the mainisland of Upolu and in Salelologa onSavaii.Travel to and from SamoaEach week, Polynesian Blue runs 14flights from Auckland, three flights fromSydney and one flight from Brisbane; AirNew Zealand has daily flights betweenAuckland and Apia; and Air Pacificoperates less frequent flights to Fiji’sNadi Airport. Local carrier PolynesianAirlines flies regularly to Pago Pago inAmerican Samoa.Unfortunately, Air New Zealand’sweekly service from Los Angeles toApia, which also connected Samoa toTonga, ended at the end of January 2011.Falelolo International Airport is35km from Apia (about 40 mins drive,approximately ST60 by taxi—the mainhotels will arrange transfers for you).When you depart Samoa, you willneed to pay a ST$40 departure tax.Getting aroundTaxis. Taxis are abundant in Apia,although many are not in greatcondition. The most comfortablevehicles can be arranged through yourhotel.Car hire. Numerous car hire alternativesare also available. The roads on themain islands of Upolu and Savai’ivary from good to poor quality. Youwill need to acquire a Samoan drivinglicence. These can be acquired fromthe Ministry of Transport, Worksand Infrastructure or some car hirecompanies. You should also ensure youtake out adequate insurance. Be awarethat Samoans now drive on the lefthand side of the road as of 1 September2009.Ferries. Most economic activity is onUpolu, but if you want to reach thelarger island of Savai’i, a popular touristspot, Samoa Shipping runs regular ferryservices.Jasons Travel Media produces botha handy visitor map and visitor guide toSamoa, which can be picked up fromthe Samoa Tourism Authority fale intown and at the main hotels.ClimateSamoa lies close to the equator andtherefore experiences relatively hot andhumid conditions all year round. The dryseason is from May to September, whilethe wettest months of the year areDecember and January. There is a highrisk of cyclones during the wet season.Time zoneSamoa is located just east of theinternational dateline, meaning thatthe time is 11 hours behind GMT/UTC(the same time zone as Hawai’i). Thisis worth keeping in mind because itmeans that on Monday in Australia/New Zealand, it is still Sunday in Samoa(which is why no one is answeringyour call!).Business etiquetteBusiness attire is informal. Jackets andties are dispensed with, and manyexecutives can be seen sporting thelavalava (sarong), colourful island-styleshirts and sandals.Business hoursShops and government offices generallyoperate from 8am to 4.30pm. Samoa isa very religious country and so Sundayis a fairly quiet day, with most shopsclosed.ElectricityThe current in Samoa is 240V AC 50Hzusing Australian-style plugs.SafetySamoa is considered very safe forvisitors, although the usual sensibleprecautions should be exercised. Ifwalking outside of Apia’s city centre,beware of aggressive stray dogs.HealthAlthough there is no malaria in Samoa,dengue fever (a mosquito-bornedisease nicknamed ‘bone-fever’) is aproblem and a strong insect repellentis recommended. Health facilities arequite good by Pacific standards andthere is even a private hospital in Apia,Medcen Samoa (www.medcen.ws). Inany event, it is very important that youobtain comprehensive health cover priorto travelling.CommunicationsInternet. Internet access, in Apia atleast, has improved rapidly. Wirelessbroadband is available in the betterhotels. There are also a few internetcafés in Apia—we’d recommend theComputer Services Ltd one.Mobile. International GSM phones cannow roam in Samoa. Coverage is verygood. The two providers are GoMobile(offered by soon-to-be-privatisedSamoaTel) and Digicel. If you are stayinglong enough, you can also pick up alocal SIM card from one of the two localproviders and enjoy lower rates.Media. The Samoa Observer (www.samoaobserver.ws) is the mainnewspaper. Radio Australia is broadcaston 102FM in Apia. Several local radiostations, including Radio 2AP (540AM),source news from Radio New Zealand.AccommodationIn Apia, most visiting business travellersstay at the iconic Aggie Grey’s Hotel& Bungalows (www.aggiegreys.com),located on Beach Road, a few minuteswalk from the main commercial area.It offers comfortable executive rooms,and amenities such as cable TV, roomservice, wireless internet, and a decentgym. But what makes staying heresuch a pleasure is the hotel’s greatatmosphere and warm-hearted staff.The recently-opened Tanoa TusitalaHotel (www.tanoahotels.com ) near theFlea Market is a quality alternative—clean, well-run and with modernfeatures, including internet.The new Manumea Resort (www.manumearesort.com) is an ‘all-suite’boutique property a few minutes out oftown, in the slightly cooler climate of theVailima district (near both the breweryand the Yazaki plant).About 40 minutes away from Apia,very close to the international airport,is Aggie Grey’s Lagoon, Beach Resort &Spa, Samoa’s first large-scale resort.More accommodation optionscan be found on the Samoa TourismAuthority’s excellent website (www.samoa.travel).Restaurants & entertainmentThere is no shortage of great places toeat in Apia, with fish and seafood thehighlights. Business Advantage’s strawpoll of local restaurants in Apia indicatedthat Australian-run Bistro Tatau, Sails,and Paddles—spread out along BeachRoad—are the current local favourites.The Apia Yacht Club is a goodinformal option, while Aggie Grey’s Hotelhas an upmarket option, a great coffeeshop, and a poolside fale restaurant.The latter presents a memorable Fia Fiacultural show on Wednesday nights.Other recommended lunchtimeoptions include Sydneyside Café,which also has great coffee, andCappuccino Vineyard. Both are locatedin the pedestrian precinct in the centreof town.26

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WHY INVEST IN SAMOA?> The most politically stable country in the region based onstrong social and cultural structures and values;> Attractive fiscal regime including competitive investmentincentives;> Free repatriation of capital and profits with relatively lowcorporate & income taxes;> Access to concessional trade agreements (e.g. SPARTECA);> An Investment Project Committee created to expedite foreigninvestments;> An enabling business environment with strong economicinfrastructure;> Affordable, productive & industrially adaptable Englishspeakingskilled labour force;> First rate lifestyle benefits in a secure environmentSolid Performance, Strong Growth & Wise investment!Ministry of Commerce Industry & Labour. Level 4, ACC House, P.O. Box 862, Apia, SAMOA.Telephone: (685) 20441 Facsimile (685) 20443 E-mail: mpal@mcil.gov.ws Website: www.mcil.gov.ws28“Our vision is to lead and excel in the provision of quality service tofoster economic growth for all”