Posts

Credit Access In Samoa
In the past few years, Samoa has seen the emergence of a new banking system with a focus on credit access. This comes after years of financial hardship and a shrinking economy. According to a 2016 report, no new loans had been issued in Samoa in roughly five years. Major financial cornerstones like the Bank of Hawaii had backed out of the country.  In desperation, and on the margins of the mainstream economy, Samoa adopted a public banking system.

The Landscape of Samoa’s Credit Sector

The financial services sector in Samoa encompasses a wide range but is mostly limited to urban areas. The industry has four major commercial banks: two foreign banks and two regional banks. However, the domestic credit market is controlled by Public Financial Institutions. Samoa National Provident Fund holds 22.6 percent of the market; another key player, The Development Bank of Samoa, holds a 10.3 percent share. Much of the success of credit access in Samoa can be attributed to the Central Bank of Samoa. It acts as a regulator and has enforced progressive strategies that have expanded financial services and inclusion.

However, 49 percent of Samoans are outside of the formal financial market. Public constraint has often been attributed to a cash-heavy informal economic sector and inadequate access to distribution points throughout Samoa. The World Bank and The International Finance Corporation have identified Samoa as a struggling credit environment, but policy improvements seek to target these issues.

Somoa’s First Credit Bureau

In 2015, Samoa launched its first Credit Bureau financed by The International Finance Corporation. Its intention was to bring efficiency and transparency to the money-lending market. This was a milestone for Samoa’s financial system, which was historically reliant on cash. It helped many different parties by providing confidence to lenders as borrowers built up their credit profiles. The Credit Bureau was fundamental in establishing a credit infrastructure in Samoa. Backed by the Data Bureau and the largest financial firms in Samoa, technological advancements such as cloud storage and information sharing among banks allowed credit footings to grow. The new technologies meant that lenders could deliver financial services at significantly lower costs to expand credit access to broader segments of the economy.

Expanded Credit Access

Domestic credit to businesses has grown by roughly 60 percent since the mid-1980s. The Strategy For The Development of Samoa, intended for the years 2016 to 2019, outlined plans to increase inclusivity to vulnerable groups and help end all poverty in the region.

Supported by the public domestic credit market, economic resilience accompanies private sector investment and development initiatives to expand credit access. Agriculture and fisheries are especially important to Samoa’s rural economic growth and development. The Development Bank of Samoa finances agriculture through the Agricultural Competitiveness Enhancement Program and Agribusiness Development Program. The Agribusiness Programs, Development Bank and Business Enterprise Center provide increased technical and financial support services for small business development.

Positive Results

Samoa has already left the list of the most undeveloped countries and is on its way to sustainable economic growth. With the continued implementation of credit and financial services aimed at the most vulnerable populations, Samoa has seen growth in per capita GDP of roughly $6,000 USD in 2017, up nearly $500 USD since 2015. 

While extreme poverty does not afflict the region, 20 percent of the Somoa’s population lives under the poverty line and struggles to obtain secure employment. The majority of this population lives in rural areas, lacking access to the resources available in urban areas. With the addition of these financial services aimed at reaching underserved communities and the larger rural economy, many industries are growing and the country is opening new doors for its people. As credit access in Samoa continues to spread, the economy and individual prosperity will also blossom.

– Joseph Ventura
Photo: Flickr

Why Samoa Has Poverty

In comparison to some of its neighbors in the Pacific region, the Samoa is largely successful and has a relatively strong economy. However, that is not to say that poverty does not exist in Samoa. There are a number of reasons why Samoa has poverty.

It is true that Samoa does not have extreme poverty. However, it does have large concentrations of working poor. 20 percent of Samoans live below the poverty line.

One of the biggest reasons as to why Samoa has poverty is its geography. Samoa is a small country with limited resources. Its soil is fertile but vulnerable to erosion. Natural disasters, such as volcanic activity and cyclones, have always been a threat to the nation. Samoa is also particularly susceptible to the effects of climate change, including the resulting loss of biodiversity and rising sea levels. The areas most threatened by these phenomena are generally rural and poorer. Furthermore, recovery from cyclones and other disasters can take a long time.

At the same time, fishable marine life is decreasing and the human population is increasing, creating a strain on the economy.

Another explanation for why Samoa has poverty is the high cost of living. Samoan citizens have complained about the fact that one can easily spend $100 in one day for basic necessities, when $100 is often what rural Samoans make in a week. It is not unheard of for Samoans to operate side businesses or do additional work to make ends meet, such as selling coconut oil or selling plates of food.

Despite the apparent inaction of the Samoan government, as well as the multiple possible explanations for why Samoa has poverty, there are some glimmers of hope. Some Samoans have turned to livestock farming, particularly lambs, which until recently was uncommon. Many Samoans turn to their churches not just for spiritual guidance, but for community support.

Additionally, Samoa has made strong progress in meeting the Millennium Development Goals set forth by the World Health Organization, having made social progress on a number of fronts and virtually eliminating extreme poverty. Samoa certainly has its ongoing struggles, but if its people and past are any indication, it has the potential to improve.

Andrew Revord

Photo: Flickr

Causes of Poverty in SamoaSamoa is one of the most stable islands in the Pacific region, with a reasonably healthy economy and an average family that lands in the lower-middle income category. As a developing nation, it has made many impressive strides toward meeting the Millenium Development Goals.

Extreme poverty is very uncommon in Samoa. However, around 20 percent of Samoans do live under the national poverty line. The causes of poverty in Samoa ultimately boil down to lack of access to education, youth unemployment and underemployment, gender inequity and threats to natural resources and farming land like natural disasters.

The gap between education in rural and urban areas is staggering, with few schools in the countryside and a lack of updated curriculum and textbooks in many areas. Many rural children will go into agricultural jobs too early, jobs which ultimately are not sufficient enough to support families later on. This working out of necessity instead of continuing with education furthers the cycle of poverty in rural areas of Samoa.

Another one of the causes of poverty in Samoa is youth unemployment or underemployment, particularly between the ages of 15 and 29. The unemployment rate is only 8.7 percent of adults 15 and up; however, among youth between the ages of 15 and 29, it is 16.8 percent.

There is a noticeable lack of opportunity and social benefits in rural areas that disadvantage the growing youth community in Samoa, especially as the youth population increases and puts pressure on existing resources. There is also a disparity between men and women in Samoa, with many jobs especially in agriculture restricting women. This disparity results in a significant difference between male and female incomes in the country, contributing to family poverty.

Increasing natural disasters such as cyclones threaten marine and agricultural resources, causing communities to take a long time to recover from the devastation they inflict. While Samoa’s soil is fertile, it is very shallow and prone to erosion. These features are only intensified by rising temperatures and population increases, causing land degradation and shortages of resources.

Most Samoans rely on agriculture for their income, so any threat affects their livelihoods. There is an immediate need for the implementation of sustainable farming, fishing and logging practices in Samoa to prevent environmental degradation and preserve Samoa’s natural resources.

Overall, Samoa is a moderately productive and stable country in the context of the Pacific region. However, more work can be done to ensure that the next generation of youth is employed and has the same natural resources at their disposal as their ancestors did.

Hopefully, with the implementation of sustainable agricultural practices, these changes are made, and Samoans can expand from agriculture into manufacturing to continue working towards achieving its Millenium Development Goals.

Saru Duckworth

Photo: Flickr


Following destructive cyclones in 1990 and 1991, much of Samoa’s agriculture was destroyed. This has caused major setbacks for food production. To alleviate the huge deficit in food resources, the country sought out help from donor nations as well as the World Food Programme. Despite the help from donor nations and relief programs, problems still remain with hunger in Samoa today.

In an address in 1996 by the country’s Deputy Prime Minister, Tuilaepa Sailele Malielegaoi, it was stated that the 1993 food production recovery program was making headway until a fungal disease wreaked havoc on the crops. With natural disasters and failed production recovery programs not making any progress, Malielegaoi and the government of Samoa committed to the World Food Summit Plan of Action in hopes of combatting hunger in Samoa and rebuilding the food recovery program.

Years later, hunger in Samoa is still a crisis. In 2006, the depth of hunger index–which measures the number of people who fall short of minimum food needs–was reported at 210, and, by 2008, the depth of hunger had decreased to 150, a significant reduction. In addition, the depth of the food deficit was at 22 kilocalories per person per day, while the percent of malnutrition prevalence in children under 5 was at 1.7%. The number of undernourished people in Samoa was reported at 100,000 in 2008, an estimated 5% of the population.

Despite the lack of progress, in 2013, the Samoan government and the Food and Agriculture Organization of the United Nations (FAO) announced that Samoa was among 40 countries to have cut hunger in half. This success was one of the targets of the Millennium Development Goals set by the U.N. in 2000 to be achieved by 2015.

In response to Samoa’s hard work, the Minister of Agriculture and Fisheries of Samoa Hon. LeMamea Ropati Mualia stated that “Samoa has put into place decisive policies and actions to accelerate hunger reduction,” and this is “a good signal for our beloved country’s economic growth and sustainability.”

Although there is no current data on unemployment rates and the population living below the poverty line, and with the GDP increase of $.031 billion from 2015 to 2016, which ranked Samoa 203rd in the world, it can be inferred that there has been a slow but steady decrease in hunger in Samoa.

Amira Wynn

Photo: Flickr


As of October 2015, 68 percent of all households in Samoa are raising various forms of livestock. There are currently 513,000 chickens and 168,500 pigs being raised. The country is dominated by agriculture, and instances of extreme poverty are very low, but 26.9 percent of the population lives below the poverty line.

For the poor of the country, poverty in Samoa contributes to the disparity in levels of higher education for females. Seventy percent of females that reside in households at the bottom half of income earning families usually only have a primary school education.

While food is affordable, other essentials take up a lot of the budget for most Samoan households. The World Bank is committed to supplying Samoa with increased funding, which is appropriate considering 29.4 percent of the population age 15 and above are employed.

Roads that are necessary for trade would be rebuilt, and the reinvigoration of the Samoan agricultural sector would be a part of the initiative. Making sure the country is able to meet its growth goals as well as enable an increased partnership with the World Bank would help alleviate factors of poverty in Samoa.

Many households only engage in agriculture as a secondary activity. Those are called minor agricultural projects and are a way of subsistence for people experiencing poverty in Samoa.

Upgrading cattle farms in order to strengthen the agricultural sector is one strategy the government is using besides the increase of crop production. Along with road construction to improve trade, Samoa has positive plans for the future. However, the high cost of non-food items will continue to be a burden on earnings making poverty in Samoa more apparent.

Nick Katsos

Photo: Flickr

Malnutrition in Samoa
Malnutrition has widespread impacts and widespread consequences. As a worldwide problem, malnutrition impacts one in five children. Within Samoa, the problem is a growing health concern, particularly for children.

Malnutrition in Samoa occurs in a variety of forms. In Samoa, the most common form of malnutrition is Protein-Energy Malnutrition or P.E.M. Because P.E.M. is caused by inadequate protein intake, it has its greatest impact on children, due to the low intake of protein in their diet. In 2013, Samoa also saw 72 hospital admissions for acute, severe malnutrition. Two children died of these cases.

As it does in the rest of the world, malnutrition leads to many health problems in Samoa. In 2014, four children died and 19 were hospitalized as a result of diarrhea outbreaks. A ministry of health report connected poor dietary practices, and the use of Devondale milk as a substitute for both adequate baby formula and poor nutritional practices, to pediatric ward visits during the outbreak.

A lack of proper breastfeeding is a major contributing factor to malnutrition. A study in the city of Apia found that 17 percent of bottle-fed infants were malnourished, compared to only five percent of breastfed infants. Perhaps this is why a ministry of health report, in response to the diarrhea outbreak, listed advocating for proper breastfeeding as a “priority area of concern,” and listed giving pregnant mothers food supplements such as folic acid and iron tablets as an “area for vigilance.”

Diarrhea caused by malnutrition is also difficult for health professionals in that diarrhea leads malnourished patients to become further malnourished.

The impact of malnutrition on Samoa, and particularly on the children of Samoa, is shocking. The reality of facing the situation is challenging, as the issue also connects with dietary changes in the region that have occurred over the past few decades, along with urbanization. That being said, supporting education on these issues for all along with supplemental nutrition problems will be highly important in preparing for the challenges of the present, while building a better future.

 – Andrew Michaels

Sources: Samoa Observer, Radio New Zealand International, Radio New Zealand International, UN University, Samoa News
Photo:Flickr

International Aid for Small Island States - The Borgen Project
The International Panel on Climate Change, or IPCC estimates a one meter sea level rise if global temperatures increase by four degrees Celsius. This could happen by the year 2100 and would render the small island nations of Kiribati, Maldives, Marshall Islands and Tuvalu uninhabitable.

The dire situation of low-lying island states has prompted the World Bank Group to announce a Small Island States Resilience Initiative. The Initiative was prompted by the outspoken leaders of the island states who have asked the world for assistance.

“As some of the most threatened people and places on the planet, small island nations are stepping up their efforts to deal with climate change. This Initiative is designed to address the specific needs of small islands and make it easier, faster and simpler to access funding to deal with resilience and climate change,” explains Rachel Kyte, WBG vice president and Special Envoy for Climate Change.

The WBG will also increase its aid to the island states to $190 million from $145 million per year.

Small island developing states have realized that they do not have it within their capacity to prepare themselves for the impending rise in sea level. The increased aid from the World Bank will help preserve the diverse culture, ecosystems and indigenous knowledge that the SIDS hold.

The World Bank Group is not the only organization that recognizes the importance and need of the Small island developing states: many various organizations have donated to projects focused on climate and disaster resilience. However, instead of helping, this has served to overburden the government. Samoa has to manage 14 different projects, while the Solomon Islands is struggling under the load of 22.

“Our hope is that this Initiative will help pool donor resources available now, reduce transaction costs, allow for economies of scale across countries, and above all, lay the ground work for direct country access to global climate fund,” said Kyte.

— Julianne O’Connor

Sources: World Bank, The Guardian
Photo: WordPress