State of the Territory Address: Local economy on “shaky ground”
Based on preliminary financial information, Gov. Lolo Matalasi Moliga says the American Samoa Government closed out fiscal year 2016 in the black and noted that revenue collections have increased every year in the last four year’s of the Lolo and Lemanu Administration.
The governor made the revelation yesterday during his State of the Territory Address, which was summarized in Samoan. The Address was not delivered in English, instead a separate 83-page Comprehensive Report in English was handed out to lawmakers and others. The report looks at the last 4 years of the Administration, which took office in January 2013.
The governor informed lawmakers that 2016 was a year full of challenges and this is always the case, when it’s an election year for a governor and lieutenant governor, because of the many preparations involved going into the next four-year term for the government.
2016, the governor said, was a time when it was difficult to meet financial obligations, but with the Fono and the Executive branches working hand-in-hand, many of these issues were addressed.
In addition, because of their working together, Lolo said preliminary financial information from Treasury and auditors indicates that ASG closed FY 2016 — which ended Sept. 30, 2016 — with a $1.2 million surplus.
In the Comprehensive Report, the governor said that in 2013, ASG inherited a $7.7 million deficit and an outstanding debt of $59.6 million, including legal obligations totaling $11 million. To settle the growing deficit, Lolo said the administration created and enforced cost containment measures to reduce overall government spending.
By the end of 2013, the administration was able to reduce the deficit by $4.8 million and paid down ASG’s legal liabilities and obligations by $5.1 million and closed FY 2013 in the “black” for the first time in over 30 years.
However, Lolo said government spending swiftly soared with the implementation of many new infrastructure developments and program priorities in 2014. Sadly, he said, the administration closed out FY 2014 in the “red” — but regained its financial prowess to close both FY 2015 and FY 2016 in the “black”.
In his Samoan address, the governor informed lawmakers that another important financial issue for ASG is the increase in local revenue collections since the administration took the helm of government in 2013.
According to the governor, in the year 2013 local revenues collected totaled $90.3 million, for the year 2014 a total of $98.9 million was collected; in the year 2015 a total of $101.04 million was collected and in the year 2016 — as of Dec. 31st – $104.4 million has been collected.
Lolo said these numbers show the continued increase every year of local revenue collections, but this is offset by a noticeable increase in the needs of the people as identified by the Fono and the Executive branch. However he said, this is a clear indication that the government of American Samoa is moving forward (in meeting the needs of the people).
HEALTH OF THE ECONOMY
Regarding the health of the local economy, or the Gross Domestic Product (GDP), Lolo said that a 2012 review by the US Departments of Labor and Commerce showed a decline of 4.3%, but when reviewed in 2015, the GDP showed a 1.1% increase, which is a positive sign for the local economy moving forward.
While numbers are positive, there is a concern about the impact of outside issues, which are beyond American Samoa’s control — for example, change in federal laws as well as globally, he said.
Lolo also spoke on the issue of unemployment, which was 20.4% in 2013, but the latest report on Dec. 16, shows unemployment dropped to 10.5%.
According to the governor, employment as well as the economy improved with the entrance of Tri Marine International into the local economy, investing $70 million in 2013, setting up Samoa Tuna Processors (STP) Inc. He explained that between 2013 and 2016 about 1,500 new jobs were created in American Samoa and many of these jobs were due to Tri Marine’s new operation and other major ASG infrastructure projects.
However, STP on Dec. 16 closed indefinitely its cannery operation and laid-off nearly 700 workers. Lolo said the job losses at STP are a “major economic loss” for American Samoa.
Lolo again reiterated that issues surrounding these job losses on our economy are beyond local control. He said American Samoa prays that the federal government makes it easier for American Samoa in the new year so there are new and good changes to the local economy, which is on “shaky ground”, because of various reasons, including there are no firm plans released by the incoming Trump Administration for the territories.
Lolo called for patience, saying there are many challenges ahead but not to give up easy. He did note that it’s important that everyone works collaborativey — similar to the past four years — to achieve great benefits for the people and government of American Samoa.